As organizations tighten budgets your Board and C-suite put pressure of finding cost savings, often looking to reduce spend on insurance programs. But cutting coverage without a clear view of your total risk exposure can backfire. You can make smarter insurance decisions with a portfolio view of risk. In this insight we cover how you can contribute to organizational resilience and success with five things you should consider before making decisions to reduce risk spend:
01
Insurance programs are often built incrementally one coverage at a time. But risks don’t occur in silos, and your risk financing strategy shouldn’t either. Portfolio modeling helps you see how your risks interact, where you may be duplicating coverage, and where you can safely adjust structure.
02
Your organization may be more willing to take on risk than it was a year ago especially if doing so guarantees fixed-cost savings. That might mean raising retentions, lowering limits, or accepting narrower terms. Gain common ground and support from your CFO and/ or Treasurer with clearly documented risk tolerance. This supports the financial framework and objectives of the organization and ensures that insurance and enterprise risk management play deeply into your organization’s financial health.
03
Many companies are unknowingly paying to transfer risk they could retain without material impact. In fact, some primary and excess layers rarely attach or offer diminishing returns. We can help you pinpoint if and where you’re over-spending and where you can raise retentions or reduce limits safely without compromising resilience.
04
Reducing fixed cost spend by dropping key coverages or skimping on data and analytics might look good this year but can lead to larger losses, higher volatility, or unfavorable renewals down the road. Use modeling to distinguish short-term cuts from long-term costs.
05
Risk financing decisions shouldn’t happen in isolation. Your insurance strategy should reflect your broader business goals, whether protecting capital investments, freeing up cash for growth, or weathering economic and geopolitical volatility. If cost cutting is a current priority, we can help you navigate the tough choices required to do so.
Cutting insurance spend doesn’t have to mean taking on unacceptable risk. With the right data and analytics, layered with a portfolio lens, you can reveal potential risk savings, assess the trade-offs between cost and risk, and support your organization’s evolving strategy.
Do you want to uncover hidden savings in your insurance program? Get in touch with our risk optimization and enterprise risk management specialists to take a fresh look.
