Evaluation system will help assess risk management
Royal & SunAlliance (R&SA) has launched an initiative to reward good risk management when underwriting employers' liability (EL) risks.
UK underwriting director Colin Short explained that the quality evaluation device (QED) is designed to assess risk management standards across all industries through a series of questions on topics such as management style, finance, people and processes.
Short said the QED was developed in response to the Department for Work and Pensions (DWP) EL review. "We can't sit back and wait for the DWP to take action," he said. "This is an initiative to take out some of the subjectivity in how we measure EL."
The QED will be complemented by surveys undertaken by R&SA's field-based risk consultants, who will validate the information given, provide additional details where necessary and advise businesses on how to improve their risk management.
Short said the QED would also allow R&SA to adopt a more risk-based approach when underwriting public and product liability insurance.
Rather than growing its liability book on a "stand-alone" basis, R&SA intends to use the QED to offer EL insurance as a benefit to well-managed companies placing property business with it, Short said. The QED, which has already been piloted with brokers, sits within the new property and liability rating engine that R&SA is currently rolling out.
Meanwhile, R&SA has also implemented plans to employ common underwriting standards across its commercial and household property books.
Short said the new structure would ensure a unified underwriting approach for technical commercial and household property risks such as flood or terrorism, rather than different strategies.
R&SA's former commercial property and engineering underwriting manager, Graham Heale, has been appointed property and household underwriting manager. He will be responsible for implementing the unified strategy across the company's London-based commercial property team and its household property underwriting teams based in Horsham and Oldham.