By Michelle Silvestro
National Interstate Insurance

Now that the worst of the most recent "hard" insurance market is over, what has it taught us?

Clearly, the most important lesson is that traditional market insurance rates are dependent on capacity (i.e., the supply of insurance companies willing to write a class of business) and investment returns.

While rate increases of 20-plus percent are, for the most part, a thing of the past, now is a good time to use what has been learned to better cope with the cyclical insurance market. Your job, as a savvy insurance buyer, is to find the most cost-effective, stable, long-term risk-management solution.

Put your best foot forward
To prepare for an upcoming insurance renewal or audit, consistent and complete record keeping is the key. Most insurance companies that specialize in insuring passenger transportation businesses look for the same basic information every year: Complete application, current driver list, current vehicle list, current financial statements and current loss data. By maintaining complete files, most of the information that is needed should be at your fingertips. Providing updated information every year allows for changes in your business to be taken into consideration when underwriting and developing a premium quote.

A word about loss runs
Over the years, I've talked to many operators with the same problem. They can't get updated loss runs. The time to ask your agent or broker for loss runs is not the week before your insurance renews. Loss runs should be used as a tool to monitor claims and to assist in loss prevention. Ask your insurance agent or broker to provide you with regular updates, either monthly or quarterly. Remember, you purchase insurance to protect you in the event you have a loss. Claims management is key to successful risk management.

Choose your business partners wisely
In an everchanging insurance market, professional insurance providers (insurance companies, agents and brokers) that specialize in your business (passenger transportation) are a must. Your broker or agent is your professional adviser and should be there to help you through the renewal process as well as be available throughout the year for assistance and guidance.

In most situations, insurance companies do not quote business direct to the operators. They rely on agents and brokers to present the operator's information to them. Keep in mind that some insurance companies don't work with all agents and brokers. You might consider allowing more than one agent or broker to work on your account so that all potential insurance companies have the opportunity to look at your business.

The key is to know what insurance companies your agent or broker is submitting your information to and make sure to obtain a copy of the information being submitted.

Be an educated buyer
It's not only important to pick the right insurance company, agent or broker, but equally important to choose the insurance program that makes the most sense for your business. While insurance costs remain one of the top five expenses for any operator, you owe it to your business to educate yourself on what programs are available and which one is right for your company.

While traditional first dollar and deductible insurance programs have been the "usual" choice, many operators have turned to the alternative risk transfer (captive) insurance market for better control of their risk management programs and lower, more predictable, insurance costs. While captive programs are not the best solution for all operators, careful consideration of all options is necessary.

Yes, you can control the insurance buying process
If I've heard it once, I've heard it a thousand times. Operators want to know how they can avoid receiving their renewal quotes minutes before their insurance expires. Here are the keys to controlling the insurance buying process:

1. Start the process early. Don't wait until just before your renewal date to submit your information to your agent.
2. Be proactive in the process. Follow up with your insurance agent or broker to determine if any additional information is needed by the insurance company.
3. Pick a quote date and stick with it. While most insurance companies will not quote more than a month before the expiration date, they will quote more than a few hours before your policy expires. If you demand that all quotes be received by a certain day and you don't accept quotes after that day, it will only take one renewal cycle for agents and brokers to understand you mean business.
4. Look at all options objectively and openly. While you may be familiar with some options, you might not know exactly how all programs are structured. Take the time to learn what you can to improve your risk management and potentially save money in the long run.
5. If you demand all quotes be received by a certain date, give the same courtesy back to the agents or brokers who are quoting. Advise them in a reasonable amount of time if you will be placing your business with them or not. If not, let them know why.

We don't want to be the bad guy really
Believe it or not, insurance companies, agents and brokers don't want to be the enemy. Consider your relationship with your company, agent or broker a partnership. While insurance companies, agents and brokers come and go, long-term relationships will prevail. Pick a stable insurance company that provides excellent claims service and, in the long run, you'll be ahead of the game.

Michelle Silvestro is assistant vice president and national marketing manager of National Interstate Insurance Co. Reach her at michelle.silvestro@nationalinterstate.com or (800) 595-2553 ext. 213.