Problem-Solution-Result

Unfortunately, many clients come to us when the problem has already incurred and we have very little instruments to influence the situation. We are convinced that the only efficient way to reduce the risk of having problems with your insurance is a quality and professional approach from the very beginning, well before the insurance contract is signed. In this section we would like to demonstrate few practical examples of how our clients can benefit from working with Consoris.

	How to make policy in insurance market more convinience
Problem	Analyzing annual results, one of the trading divisions of well known petrochemical company specializing in distribution of lubrication products in Ukraine noticed that together with an increase in sales the current costs paid towards insurance has become quite noticeable. When company started its operation, the total insurance costs in USD terms, was almost negligent and therefore company management, at that time, believed that there is no reason to pay too much of attention to insurance issue. It is understood that in most cases an increase of expenses is the price to pay to boost the revenue. However in an increasing competition, trading margins shrink and the one of the instrument to remain competitive is optimize the expenses. Consoris has received an assignment to study existing insurance arrangement and to give an answer to the following questions a)      Is it possible to reduce the insurance costs? If the answer to previous question is Yes, would the alternative insurance program provide at least the same scope of cover and would be arranged with one of the leading Ukrainian insurers.
Solution	Our experts analyzed the existing insurance arrangements and insurance premiums. Most insurance issues were associated with company's warehousing facilities and stored goods. It was a known fact that most or even all of Ukrainian insurers, due to low capitalization, are reinsurance dependant which means that there should be a connection between Ukrainian rates and European reinsurance rates. It is also important to know that most reinsurance programs between Ukrainian and European reinsurance companies are done on a "proportional" basis. This means that dependence between European market reinsurance rates and Ukrainian — proportional. Client remained with one insurer for few years and current loss statistics was extremely good (nil losses).We found difficult to understand why no reduction was offered, specially knowing that most European reinsures have reduced rates. In addition we discovered that according to current policy conditions, premium was calculated as a percentage from maximum possible value goods located at client's premises throughout all policy period. Whilst 50% of the time throughout the policy year the warehousing facilities were half empty this could hardly be treated as a good practice from clients point of view. We decided to file an enquiry, requesting three leading Ukrainian insurers to provide alternative indications for the same risk. Two, out of three approached insurers, offered conditions which where significantly better.
Result	We believe that the following result fully justified the efforts:  Existing insurer agreed to a significant rate reduction. In addition, previous insurance clause, according to which policy rate was applied to a maximum possible value of goods stored at warehouses throughout all policy period, was replaced by another close which did take into account the only actual amount of goods stored throughout a year. As a result client's insurance premium was reduced by almost 60%! The same exercise, carried out a year earlier, could save the client significant cost.

Precedents similar to cases referred to above became an impact made us to introduce our specialized firm audit service. We believe that this would help owners or managers of various organizations to assess the quality of insurance cover arranged without an assistance of qualified professional insurance consultants.