Small Businesses Can Turn to Internet to Assess Risk Without Broker’s Help
Insurers may soon begin using the Internet to help small and mid-size businesses do some of the work involved in identifying and assessing risk on their own, without the help of a broker--good news for the business owner whose broker can’t or won’t take the time to help out.
A number of insurers already offer online claims-tracking and policy-information services for small and mid-size business clients. Long available to big businesses, the former eliminates some of the paperwork and file-shuffling generated by insurance claims, cutting costs and speeding settlement. The latter provides fingertip data on what coverages are and are not in force.
Insurers want to expand these services, following a trail blazed by such national insurance brokerages as Aon and Marsh. Aon, for example, runs a Web site (https://www.aonline.com) offering its business clients online risk-assessment tools covering some property risks, workers’ comp, environmental hazards, and directors and officers insurance, said Julie Geis, senior vice president and director of business development for AonLine, the brokerage’s online unit, in Kansas City, Mo.
And just weeks ago, Julie Davis, director of Aon’s technology risk group in San Jose, won the approval of the company’s board of directors to launch an online risk-assessment program for high-growth technology companies. The program will enable such companies to create a permanent online “risk profile” of their operations--that is, a formal assessment of the risks created by the business enterprise, whether insurable or not, ranging from the relatively simple risk of fire or flood to a range of subtle risks encountered by the “new-economy” company, such as theft of intellectual property.
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The program will be scalable, Davis said, allowing the business to keep track of new risks as they arise in the course of growth. She expects to get the program online soon.
Aon’s competitor Marsh, meanwhile, recently launched a Web site (https://www.netsecuresite.com) allowing businesses to assess e-commerce risks, including some not automatically covered under ordinary commercial insurance policies:
* Loss or theft of electronic information assets, including intellectual property;
* Loss of income due to network and Web site disruptions;
* Theft of credit card information;
* Losses to third parties associated with computerized business links and interdependence;
* Breach of privacy.
The Web site uses 67 multiple-choice questions to probe assets, personnel, third-party relationships, security and a number of other issues.
In addition, Marsh offers a free software package covering employment-practices liability, a key exposure for any growing business. The software contains an extensive database on employment-practices law plus downloadable employment forms and information on employee benefits, among other subjects. Marsh also offers clients engaging in foreign trade a database on insurance requirements and regulations around the world.
A number of insurers expect to hit the Internet with similar risk-assessment tools in the coming months, although they face a practical problem in doing so: Agents and brokers fear that the wonders of the electronic age will undermine their relationships with their clients.
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It is not clear, however, just how much agents and brokers do in helping small businesses assess and manage risk these days. They work under enormous pressure to sell, sell, sell, leaving many with little time for the hand-holding that business owners once took for granted. For business owners, the danger is that, as their operations expand, they will encounter new risks not covered by their insurance--a recipe for trouble.
That said, the insurer initiatives include a new St. Paul Companies Web site, due to launch in November, offering training modules for small-business health and safety control, according to Bill Boyd, the insurer’s director of risk control in St. Paul, Minn. The insurer also has a fax-on-demand service in the works covering some 400 risk management topics for small business and a toll-free number for clients seeking specific information on, for example, worker safety equipment or the handling of hazardous materials.
CNA, meanwhile, hopes to expand a service now targeting lawyers who buy its professional liability insurance. The service tracks claims and premiums, accesses coverage data and analyzes loss information--key to any do-it-yourself loss-control system. Bob James, chief operating officer of the insurer’s e-business operations in Chicago, said CNA plans to offer similar information to a broader range of policyholders next year.
Another big insurer, AIG, now sells basic property coverage, workers’ comp, professional liability and insurance for exporters and importers via its Web site (https://www.aigdirect.com). Scott Alexander, AIG’s chief e-business officer in New York, said he expects to make the Web site “much more sophisticated in providing analysis of risk to small business.” In addition, AIG expects to expand a second Web site (https://www.aigonline.com) “to educate business professionals from a risk mitigation perspective.” At present, the Web site is largely informational.
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Recent Financing and Insurance columns are available at https://www.latimes.com/finin. Juan Hovey can be reached at (805) 492-7909 or at jhovey@gte.net.
