PUTTING YOUR RISKS ON THE TABLE While most risk managers still rely on their brokers to put together the submissions that solicit bids from insurers, consider writing the applications yourself. Learn as much as you can about putting together effective underwriter submissions and about risk pricing. The more clearly you communicate your needs and exposures to the underwriter, the less padding will end up in your premiums.

For instance, Norman Lange, head of risk management at the U.S. division of Dutch professional publisher Wolter Kluwers, has been writing his own submissions since joining the industry in 1993. Sometimes, he even proposes building policies from scratch, to cover risks for which no stock products exist. To do this, Lange polls several underwriters and asks them what kind of information they would need to develop a new product. "I will have discussions with potential underwriters, and I'll say to them simply: 'Here's what we are trying to accomplish and this is what I think you might need. Could you help me flesh out the information you would like to see?'" Even if the terms and pricing aren't ideal in the first round, says Lange, more information helps insurers come up with better terms and lower premiums in the long run. Sue MacGregor, director of risk management at Brinker International Inc. in Dallas, the country's second-largest casual dining chain, says, "Early on, in the relationship [with carriers], I think it's critical to be able to tell our story because it pays off when they're pricing the program." Once the relationship is in place, keep communication lines open, she adds. But brandishing a little stick doesn't hurt. Lance Ewing, head of risk management at Caesars Entertainment Inc. in Las Vegas, says six months into the term of his directors and officers liability policy, he organizes a meeting with underwriters and the company's senior management. This powwow gives underwriters a better understanding of where the company is headed, what kind of training is in place and whether any litigation should be expected, well before the pressure of renewal time builds up. Like many other risk managers, Ewing also regularly invites underwriters to visit the facilities they are insuring. Caesars' property insurers tour a lot of casinos, he quips, because "nobody seems to turn down a trip to Las Vegas." This approach helps underwriters gain a better understanding of the risk in question. Ewing says while insurers in Munich or Paris might base their evaluation of casino risk on facilities they have seen in Monte Carlo, "when they get over here, it's quite a different animal. They see that we are a highly protected risk and that we have the right protocols in place."

Ewing is not alone in that practice. To retain control of the underwriter relationship, the Risk and Insurance Management Society (RIMS) advises buyers to conduct periodic performance reviews with their carriers, assessing everything from whether the underwriter participates in the company's analyst calls, keeps the buyer appraised of industry developments or pays invoices on time. Such displays of self-sufficiency have sparked a debate about whether companies could bypass brokers altogether and buy their insurance directly. "That's an equation that's been kicked around," says Ewing. "There are corporations like Liberty Mutual, or to some extent Factory Mutual, where you can write [policies] directly." But generally speaking, direct procurement is unlikely to gain a large following, say risk managers, arguing that large insurers are not set up to deal with corporations directly and would be reluctant to develop the necessary resources. Ewing also points out that brokers provide an important buffer between corporations and insurance carriers, with their "errors and omissions" coverage that protects the buyer if something goes wrong.

Finally as Whirlpool's Kilburg notes, don't get bogged down with the little picture–and don't lose control of the process. "We'd rather be out consulting with our businesses on risk issues…than worry about all the policy issuance details our brokers are following up on," he concludes.