Our relationships are built on trust.
Zurich, a leading property and casualty insurance provider globally and in North America, and FMI Quarterly’s publishing partner, recently introduced a new benchmarking and loss assessment tool for its construction customers. The Construction Value Proposition (CVP) identifies savings and loss mitigation solutions.
These solutions are based on the following comparisons:
- Benchmark Loss Comparison — Evaluates a company’s loss experience against contractors with similar industry classifications, payroll sizes and exposure states.
- Benchmark Frequency Rate — Compares a company’s loss rate to similar contractors.
- Benchmark Loss Comparison by Coverage — Determines the exposures most dramatically affecting losses through a detailed analysis of a company’s loss history by coverage.
Using the benchmark tools, loss leaders are analyzed on an exposure basis, showing key loss leaders, including the associated claim costs. Based on these findings, Zurich works collaboratively with contractors to help identify, prioritize and implement loss reduction strategies as described in its online Tool Crib. The Tool Crib features risk engineering and claims services in combination with insurance products to supplement a company’s risk management program. The Tool Crib can be accessed at http://www.zurichna.com/construction.
FMI Quarterly recently spoke with Nancy Simonson and Kim Guentzel to learn more about how Zurich uses CVP in its stewardship process.
Chisholm: Let’s start off by letting our readers know about your roles at Zurich, since they focus specifically on customer relationships.
Simonson: I’m a vice president in our construction group and focus on building and maintaining relationships through forums such as executive summits and risk manager councils that provide thought leadership topics and facilitate discussions around construction industry issues. Additionally, I work across the Zurich organization to develop and promote new insurance concepts that affect the industry, such as public-private partnerships, enterprise risk management and supply chains. I also work with our field teams to assure we are identifying and developing the appropriate resources to support their customer relationship activities.
In Zurich’s construction segment, we have approximately 30 offices with dedicated underwriting, risk engineering and claims teams that build customer relationships, thereby helping to fulfill our vision of being the recognized leader in providing creative risk solutions for the construction industry. We have underwriters who are dedicated to analyzing and pricing risks that contractors face every day and provide the most robust array of coverages available in today’s market. We hire risk engineers from the construction industry who understand the issues contractors face and focus on working collaboratively with contractors to solve their issues. That’s why our risk engineers have developed specialized programs, like QA/QC, to address construction defect issues and others, like Drive to Zero, to manage worker safety. We have claims personnel who are knowledgeable in construction operations and focus on providing expertise in claims management and construction defect. Both our claims and risk engineering personnel receive excellent ratings from our construction customers.
Chisholm: Tell us about your role at Zurich, Kim.
Guentzel: I’m the director of the Customer Insights Team (CIT). Our role includes enhancing the customer experience through stewardship, executing value propositions (competitive advantage statements) that highlight our knowledge and expertise in the construction industry and supporting Zurich’s “thought leadership” position, which helps enhance our brand recognition. I think one of the most important aspects of the CIT is that we help pull the field teams together to talk through customer issues, concerns, etc. We help facilitate those conversations and develop professional programs and materials that our field teams share with their customers. These materials include loss, claims management and risk engineering reports designed to help address the leading causes of loss for our customers.
By helping develop a customized strategy — whether it’s insurance products or loss mitigation programs, we assist the field in preparing a presentation that conveys Zurich’s construction value proposition. We take work off the account teams so they can focus on their relationship with the customer, because we recognize that is their most important function.
The CIT also is responsible for facilitating development of thought leadership materials. For example, we provide quarterly construction and design webinars, distribute specialized construction materials like the FMI Quarterly and publish our own HelpPoint Delivered newsletters, which are construction-specific and talk about issues happening in the industry. We work with Nancy and others on events like the Contractor’s Summit, the Zurich Construction Risk Manager Council, the National Construction Roundtable as well as other customer-facing activities.
Our field teams also conduct stewardship meetings with our brokers. I want to mention that because we work with independent agents, and a big part of our client interface is with the broker, not just one-on-one with our customers.
Chisholm: Tell us about Zurich’s stewardship process.
Simonson: About two years ago, Scott Rasor, head of Construction, had an “aha” moment. In discussions with a key construction broker, Scott received the following feedback: “Zurich Construction provides the best coverages and services available, but your people never tell anyone about it. Your underwriters don’t talk about it; your service teams don’t mention it.” So we made a strategic decision to build a repeatable stewardship process to help our field teams build stronger customer relationships and better articulate our value proposition.
Our stewardship process consists of benchmarking loss experience, providing relationship highlights and developing action plans aimed at achieving mutually agreed-upon goals.
We also have developed a number of value propositions that help define what we do to makes us a leader in the construction insurance industry.
Chisholm: You have two tools that you use for stewardship, Construction Value Proposition (CVP) Light and CVP Heavy. Tell us about those.
Simonson: For the CVP Heavy, we have assembled an extensive database of loss experience based on construction standard industry classifications (SIC). This enables us to benchmark our larger contractors, those with credible loss experience, against their industry peers with similar size, scope and geographic regions. For our midsize customers, we use the CVP Light, which demonstrates Zurich’s loss experience and associated loss mitigation techniques for contractors of similar scope.
After displaying the benchmarks/loss experience, both CVPs make recommendations on how to mitigate the contractor’s loss leaders. This represents the two or three risk mitigation programs that the contractor, broker and Zurich agree to focus on over the next 12 months.
We have several industry service offerings designed around specifically mitigating construction risks. One tool we might recommend is the Highway Worker Safety Program we developed with AGC to address exposures associated with five primary construction industry hazards. We also may recommend FightReady™, where we work with an outside vendor to ensure the specific drug and alcohol testing policies are current and compliant for our contractors, because many of them work over state lines. For our midsized customers, we have a variety of Web-based and on-demand tools and training opportunities. Regardless of the stewardship tool being used, we customize each presentation to match the contractor’s unique insurance needs.
The flow of the meeting is important. After the welcome and introductions, we have an agenda geared to making sure our team is asking the customer what its business outlook is and thanking it for its business. Next, we have the team communicate what its value is to the customer and why our relationship is beneficial. This is the area where Kim and I spend a lot of time coaching our field people to help them articulate what their real relationship is with this customer.
Kim can describe the way we demonstrate our thought leadership in the construction industry and how we deliver “next steps.”
Guentzel: We identify topics that are really affecting the construction industry — issues our contractors are struggling with. We address those topics through forums like our HelpPoint Delivered newsletter, Construction and Design Risk Webinars and FMI Quarterly interviews. Another item we highlight is upcoming industry events — in particular things where we have people from Zurich speaking or participating. We’re also letting people know about other local and regional industry associations that we belong to and actively participate in.
Under the “next steps,” we document the deliverables agreed upon, which helps to engage all participants in the relationship and the solutions. Our field teams tell us this is a positive step and helps to assure that agreed upon actions are completed.
Both versions of the CVP have also been successful in helping us demonstrate our knowledge of the construction industry and our capabilities to new customers.
There is an enormous amount of value in the amount of training and mentoring that happens as part of this process. We often have Nancy, or another member of the executive team, involved in the conversation. It’s a great opportunity for her to talk about some concerns that she may have with the customer or address some issues she think the customer may be having with us or with our service. It just helps our underwriters and the team be even more credible out in front of the customer.
Chisholm: What is the most important thing that Zurich does to maintain long-term relationships?
Simonson: I would say that the most important thing is that our relationships are built on trust. Trust in our financial stability, our expertise in construction, our knowledge in construction worker compensation, general liability, construction defect claim handling and the risk mitigation programs designed to reduce the cost of loss to the contractor. Our CVP platforms and the stewardship meetings that take place allow us to articulate the value our teams perform every day in servicing their customers.
ZURICH’S CONSTRUCTION VALUE PROPOSITION
Zurich’s Construction Value Proposition (CVP) tools identify savings and loss mitigation solutions through benchmarking and loss assessments.
CVP Light Stewardship Tools
There is a standardized template for each of the middle-market targeted SIC codes that includes:
- Prefilled charts that highlight the typical causes of loss and Zurich’s loss experience by SIC
- e-tool capabilities that are the cornerstone of Zurich’s middle market service strategy
The template typically is developed and delivered to the broker, concurrently with the insurance proposal. It is ideally suited for presenting to prospects, regardless of size.
The account team develops these materials to assess an organization’s overall loss performance and identify proactive steps needed to promote a culture of continuous improvement. For example, the team will identify the primary hazards associated with street and road construction, and may include:
- Workers’ compensation
- Property: Installation/rigging
- General liability
- Property: Builder’s Risk
- Automobile liability
- Property: Contractor’s equipment
- Special exposures specific to street and road contractors
SICs available for CVP Light:
- 1542: General Building
- 1611: Street and Road
- 1623: Utility
- 1711: Plumbing and HVAC
- 1721: Painting and Paper Hanging
- 1731: Electrical
- 1741: Masonry
- 1743: Tile and Marble
- 1751: Carpentry
- 1761: Roofing
- 1771: Concrete
- 1793: Glass and Glazing
- 1794: Excavation
Other CVP Light options include:
- Construction overall (All SICs combined)
- Consolidated Insurance programs
- Builders Risk
CVP Heavy Stewardship Tools
The tools are used for larger accounts with revenue in excess of $50 million.
The CVP Heavy template includes:
- Customer relationship highlights
- Charts that benchmark the customer against the industry and best-in-class firms
- Customer leading causes of loss charts
- Actual savings to the customer
- Next steps, designed to mitigate causes of loss
CVP heavy is used at midterm stewardship or kickoff rather than at renewal to help drive the service strategy —it is also good for new business prospects.
FMI Quarterly thanks Nancy and Kim for their time and insights on Zurich’s stewardship process.
Kelley Chisholm is the editor of FMI Quarterly. She can be reached at 919.785.9215 or via email at email@example.com.