A HOLISTIC APPROACH TO RISK [Rough Notes]

A team approach leads to trusted advisor status

It seems like the insurance industry has been talking about integrating risk management for almost as long as I've been in the industry. Unfortunately, while the talk has continued, the industry seems to have headed in the other direction, with huge health care giants taking over the health insurance business and ignoring property/casualty concerns, while property/casualty giants maintain their own way of doing business.

So instead of integration in what is probably the most important area of risk, and certainly the most expensive- health care-there has been an increase in what many have termed the "silo effect," where risk management is emphasized on the property/casualty side of the business, while cost shifting seems to be the mantra for the health insurance side. And similar silos exist in many corporations, where property/ casualty concerns fall under the risk management department, while benefits are the purview of human resources.

The result has been that injured and sick people are treated completely differently depending on where the injury occurred or what caused the illness. Quick return-to-work and extensive rehabilitation was the order of the day if the injury or illness was work related, but the primary concern for health insurers was getting the injured or sick party out of expensive hospital care. Getting the person back to work was not a priority. And, even more problematic was the apparent lack of concern for managing the health care risk.

This was not an acceptable paradigm for the Ottawa Kent Insurance Agency.

A paradigm shift

"Back in 2000, we made a conscious decision to get out of the quoting game and become trusted partners with those clients that were interested in working to develop a holistic approach to risk management," says Agency President Mike Haverdink. "We developed a profile of our ideal customer and it turned out to be one that values employees and wants to be better at what they do. And that became our target.

"If a prospect didn't fit that profile, or want to strive to fit that profile, then we would suggest they go elsewhere. If they did want to work with us, then we put them through our risk management process, which is designed to help them improve their risk elimination and mitigation and lower their insurance costs. The result has been that we only accept one out of four prospects, but once they're on board, they are customers for life."

"This was a logical outgrowth of the philosophy established by Mike's dad when he founded the agency in 1973," observes Certified Risk Architect Randy Boss. "When I joined the agency in 1982, we already had a reputation for delivering more than insurance. We understood that we were helping to protect those things that our clients valued most in life and that deserved much more than a simple transaction."

Mike lefta career in public accounting to join the agency in 1990. He and his brother Matt Haverdink, vice president, took over the reins in 1996 when their father retired. It was already a very successful enterprise at that time, employing 25 people. Today, the agency boasts 50 employees in four offices in Michigan. The main office is in Jenison, which is on the border of Ottawa and Kent Counties, with branches in Holland, Sparta and Byron Center

"One of the key differentiators of our agency is our 'no silos' approach. There is no separation between property/casualty and benefits," says Certified Risk Architect and Chief Innovator Dustin Boss. Dustin, one of Randy's sons, joined the agency in 2004. He adds: "The risk management disciplines for all lines are merged together and customized to match the client's risk mitigation needs. And that includes human resources concerns as well. In fact, three of our people are certified in HR disciplines and the agency is an HR Certification Institute approved provider for Continuing Education. An insurance policy doesn't make a client safer and healthier. It's what we do as their outsourced risk manager that can do that.

"Every day, we ask one simple question-What can we do to help the bottom line of each of our customers? And while that is a simple question, the answers are often complex and require innovative solutions that often involve setting up safety and wellness programs, improving loss control, establishing OSHA compliance strategies, putting together a human resources manual and, of course, monitoring and tweaking the programs as we learn what works best."

Wellness becomes a key component

Five years ago, as benefits grew to become a bigger part of the agency's book of business, "we set up HealthTrack as a division of Ottawa Kent," Randy says. "The objective of this 'loss control for benefits' unit was to provide a process to help employees manage their health risk through education and one-on-one motivational health coaching at work. My son Josh serves as chief operating officer and chief wellness officer for the division.

"The process used by HealthTrack is nearly identical to the property/ casualty risk management process," Randy continues. "We start out by identifying our client's risk exposure and then analyzing their loss data and developing strategies to control or eliminate losses. It is only after completing these three steps that we even talk about insurance as one way to finance the costs of risk. The final, ongoing step is monitoring and measuring results."

A customer speaks

One customer, Zeeland Lumber & Supply, started working with Ottawa Kent about a year ago. The company was growing and getting into some unknown areas. Ottawa Kent worked with them to establish a safety and wellness committee to coordinate wellness with safety protocols. "We basically served as their claims quarterback with an objective of reducing overall benefits and workers compensation costs. One year into the program, Zeeland's medical-only claims improved dramatically after we got involved. At the same time, there were no lost-time claims."

Zeeland Chief Operating Officer and Chief Financial Officer Craig Courts says: "We see a direct connection between the health, wellness, safety and workers comp. Tying those all together and managing them as one has been beneficial from both a cost perspective and an employee morale perspective. It has boosted employee job satisfaction and long-term health and has impacted their personal lives in a positive way."

Human Resource Manager Chris- Ann Martini says the process has "increased awareness throughout the workforce about what is available to help them. It is a great way to continue our philosophy of building trust, our Zeeland Lumber tagline. And with that additional trust, employees feel much more a part of the overall process."

Zeeland President Mike Dykstra concludes: "This has taken us from looking at risk management once a year to a 365-days-a-year approach. Together with Ottawa Kent as our outsource risk manager, we're on a journey of improving our employee population in the areas of safety and health. It's become engrained in our culture. We're already seeing employee morale benefits and financial benefits. So not only is this the right thing to do, but we're benefiting financially as well-a classic win-win."

Motivation is imperative

"A big piece that's imperative is motivating the employees to become healthier," Mike says. "Our coaches have a great track record. They provide a rollout meeting where they 'turn employees on' to wellness and later in one-on-one meetings will help them set SMART (Specific, Measurable, Attainable, Relevant, Time-bound) goals. The key is that these goals aren't pie-in-thesky goals that only serve to discourage employees by being too difficult. They must be attainable and the coach will work with them to achieve the goal. And our record speaks for itself. Our process has averaged 94.2% participation with no financial incentives."

Randy points out that Josh is the perfect motivator. "He has a passion for motivating people to stay healthy at home and at work. And he walks the walk (or rather swims the swim). He is a talented swimmer who held the DIII National Record in the 100- and 200-yard breaststroke for many years He also competed in the 2000 Olympic Trials held in Indianapolis."

The personal approach to personal lines

Personal lines is extremely important at Ottawa Kent, representing nearly 45% of total revenues. "This is a relationship business," Matt notes, "and we have taken that to heart. We really strive to make sure each personal lines customer has one contact. The person that sold the policy will also do everything else for that client. That way our people get to know their personal lines clients intimately.

"The ability to do this effectively and efficiently is really helped by our automation system. We are completely paperless and have set up 24/7 access to policies for our clients."

This emphasis on relationships also extends to the communities that Ottawa Kent serves. "We have a program-Ottawa Kent Pays It Forward-that encourages employees to get involved in the community," Matt says. "Employees are given two days offa year to help in the community. That's been very well received. We feel that giving people the freedom to choose where they want to help makes a much greater impact. We've been recognized for our contribution to Habitat for Humanity and Junior Achievement, to name just two of the organizations that our people have helped. We also put together a team to run in the Race for the Cure. We were able to do this because we also practice wellness inside our agency as well as providing help to our customers."

Mike concludes by pointing to the agency's mission statement- "something we live by every day: 'We are an outsource risk management company and independent insurance agent focused on delivering the best service to our customers. Our passion for innovative strategies helps customers overcome risk, delivering greater peace of mind.' "

Rough Notes is proud to recognize Ottawa Kent Insurance Agency as our Marketing Agency of the Month for its adherence to the principles that have made the independent agency system the best and most effective marketing system in the industry today and in the future.