UIC, Inc - insurance consultant

Executives know Thomas Kovatch is their best insurance policy. They agree that Kovatch and his associates at UIC are experts in increasing cash flow and improving the corporate bottom line. They know how to cut insurance costs while improving coverage.

Although it does not sell insurance, UIC provides unique insurance services. Working solely on behalf of the client, it provides objective professional advice. UIC scrutinizes a corporation's exposures from top to bottom, ensuring that policies protect assets on a cost-efficient basis. When necessary, UIC experts redesign policies to eliminate excess.

From Liability coverage and Workers Compensation to Health Insurance Programs, spiraling insurance premiums and hidden restrictions are affecting the profit picture of companies both large and small. Every responsible executive wants to lower costs without reducing the quality of coverage and more than 500 corporations call on UIC to do the job.

UIC's clients range from manufacturers to distributors and from retainers to contractors who pay from $100,000 to as much as $20,000,000 in annual premiums for Group Health, Workers Compensation, Property, Automobile, Crime, Directors and Officers and Umbrella Policies. UIC assists clients with both domestic and overseas coverage since its associates are well versed in both national and international exposures. There are UIC clients in the United States, Canada, South America, Europe and the Far East. Kovatch and his associates read thousands of policies each year and negotiate millions of dollars in premiums on their clients' behalf.

In the insurance consulting process, UIC meets with a client to discuss the company's operation and loss exposures. Current policies are audited beginning with the policy that is most troublesome. UIC then works with the clients and its brokers or agents to immediately cover any holes in existing coverage. After the company's operations have been defined and exposures identified, UIC and the client prepare a description of the operation that best represents the client's needs to the insurer.

Every responsible executive wants to lower costs without reducing the quality of coverage and more than 500 corporations call on UIC to do the job.

UIC then works with brokers, agents, and/or direct-writing insurers to obtain the best terms for the client. UIC and the client review competing proposals and select the policy that best fits the specification provided.

But UIC's work does not end with the selection of a carrier. Associates examine binders to ensure that they accurately reflect the proposed coverage and premium, and they review the policy and all changes and endorsements to make sure that all errors are corrected.

UIC monitors trends in the industry, government regulations and other factors affecting its clients' coverage. The company's consultants meet with clients on an ongoing basis to ensure that the clients' present and changing exposures are continually covered. They also discuss how any changes in their coverage can affect adequate transfer of risk.

According to Thomas Kovatch, President of UIC, "Obtaining the proper coverage at a low premium requires a tremendous amount of insurance expertise and creativity. Most people do not realize that an insurance policy is actually a contract that starts out blank. We tend to forget this because we are so often handed standardized policies created insurance carriers."

In Kovatch's view, important clauses in a policy can be negotiated and customized to best cover a client's exposures. Yet executives, who hire lawyers to review leases and accountants to audit books, routinely accept insurance policies that have not been examined by independent insurance experts.

UIC is in the business of helping companies understand their insurance contracts and the coverage costs involved in properly protecting their assets and liability exposures. Since UIC does not sell insurance, it can look at a business objectively. Unlike brokers and agents, UIC does not accept commissions, broker's fees or agent's fees nor does it represent any particular insurer. UIC works on a fee basis without requiring a contract or retainer. The company does not participate in any of the premium savings it typically achieves for clients.

As insurance consultants, UIC is outside traditional structure of the insurance industry, but is knowledgeable about how it operates. Thus, UIC associates are free to approach coverage from a unique perspective.

UIC demonstrates to its clients that the extent of a company's coverage and how much it pays for insurance hinge on the size and nature of the company and the scope of operations. Evaluating a company's risk exposure is the keystone of how insurance carriers construct contracts and determine premiums.

It is crucial for companies to accurately portray their operations to their carrier. Developing this picture involves obtaining a working knowledge of a company's operations, understanding management's goals, inspecting company facilities and gathering pertinent data about the operation such as contractual obligations and previous and potential losses.

Without a correct portrait of the company, insurance carriers may base coverage and premiums on a standardized definition of what they think the company does. This practice can lead to unjustified restrictions and higher premiums than the company should be paying.

For example, a client of UIC was being charged an enormous premium because it was classified as a crane manufacturer. In actuality, the company produced small industrial hoists. By providing the broker and carrier with an understanding of the product and how it is used, UIC was able to prove to the insurer that it had an erroneous perception of the client's exposure. As a result, the coverage increased fivefold and the premium was reduced by $500,000. UIC helped the hoist manufacturer measurably improve its annual profit figures.

Besides higher premiums, misunderstandings about the nature of a company's operations can also result in a carrier including clauses in the policy that restrict coverage. UIC is often successful in getting such restrictive clauses removed from policies, thus improving coverage at no extra cost to the client.

The function of UIC is to help its clients achieve optimum coverage at a low premium. UIC associates not only help a company prepare its operational profile, they serve as invaluable resources for assessing the financial soundness of insurance carriers, specifying optimum coverage, and negotiating premiums. UIC also provides loss-control management advice and services to help clients reduce claims that are caused by accidents in the workplace.

To assess the strength of an insurance company, many companies rely on popular rating guides by publishers such as AM Best and Standard & Poors. Companies are rated from A+ to C or receive a Not Assigned (NA1-NA10) classification. If there is a need to find out about a Canadian carrier, many consult either Stone & Cox or Track Reports. But rating guides do not necessarily reveal the entire picture. In the past two years, companies have gone out of business a short time after the ratings reflected their weaknesses.

UIC believes rating guides are a starting point, but assessing the soundness of a carrier requires ongoing data about a carrier's financial reserves, the types of investments it makes and the types of businesses it underwrites. UIC helps clients acquire and analyze this data.

The proper perspective regarding coverage depends on the type of insurance. Property, Liability, Umbrella and Automobile Policies have several selections and types of clauses that require special scrutiny. UIC checks to be sure that those areas most often neglected are covered. Associates review coverage for Long-Term Health Care, Crime, Workers Compensation, Fiduciary Liability, Directors and Officers, and Boiler & Machinery coverage for private companies. In seeking coverage, it is critical to remember that many coverage enhancements are absolutely free, but must be requested. Others are at nominal cost, but are sold, if possible, at an inflated premium cost. UIC associates are aware of free coverages and know the true going-rate for others.

When companies object to rates, they are often told that there is nothing that can be done because the manual determines the rates. Except for Workers Compensation rates, this is not the case. All rates are negotiable based on the perception of risk. In addition, the extent and cost of coverages vary depending on the rating basis and classification codes used to define a company's operation. The rating basis may be the company's criteria. Since some bases are less expensive than others, it is critical to use the right one and to be sure that it is started in the new policy. For example, one tire importer was experiencing booming sales without having hired any new personnel. The sales increase resulted from a new sales incentive plan. The company's insurance premium was about to be increased because the carrier based the premium on the company's sales volume. UIC helped the company obtain more extensive coverage at a lower premium by getting the rating basis changed from "sales" to "company payroll."

Independent insurance consultants are invaluable for the skills they bring to insurance negotiation on the client's behalf. Consultants give diverse and innovative advice on how to best present the company's exposures in order to obtain optimum coverage while reducing costs. They are insurance equalizers for the client, since they are insurance experts who speak the language of insurance carriers, brokers, and agents but do not make a commission on the insurance sold.

Although no one has a crystal ball, when executives hire competent, independent consultants to examine insurance companies, coverage, and costs, they can be reassured about the quality, extent, and cost of their insurance coverage.