Why you must sell yourself when buying insurance

Will Green is news editor of Supply Management
11 September 2020

Public sector buyers must sell themselves when procuring insurance services, an event was told.

Agnieszka Gajli, category manager – corporate services at public sector buying organisation YPO, said the market was limited and procurement professionals must focus on preparation to get a good result.

Speaking at Procurex National she said: “You need to sell yourself to the insurance company.

“The market is limited and not many insurers are interested in covering public sector risk, and that’s very different from standard procurements you might be doing for different services.

“When you are buying insurance you really need to think this through and focus on that preparation stage. The power lies with the supplier and you need to do a lot of work up front to get their interest.”

Gajli said the preparation stage must include detailed risk analysis, beyond reports from credit reference agencies, and risk mitigation.

“To give yourself the best chance of a good outcome from your insurance procurement process you really need to focus on that preparation stage,” she said.

“That includes risk analysis and risk mitigation from the perspective of financial assessment above the standard norm. We need to look at risk analysis and a market assessment for the supply chain. We need to fit it into the strategic objectives of the organisation and future plans. To do it all you need effective stakeholder engagement, both internal and external.”

She added: “A structural analysis of supply chains can help you prioritise high-risk areas that offer the greatest opportunity for creative supply chain resilience.”

Gajli said insurance was a “promise to help” and it was critical to get the terms and conditions right, along with the best value quote.

“That promise to help is only as good as the terms and conditions in the insurance contract. You will only know the value of that promise when something bad happens,” she said.

Gajli said the collapse of Carillion, the Grenfell Tower disaster and Covid-19 had raised the profile of risk management like never before.

“For the first time ever everything is risk focused. Ability to manage risk is now identified as a key challenge,” she said.

“The risk of getting into another lockdown or regional lockdown is still high and it’s going to affect suppliers to our organisations. We will be dealing with a shrinking economy which will affect people’s lives going forward. We are at the edge of transformational changes to the way we work and live.

“The focus of public sector organisations will be on how they deliver better public service, stronger society and a more dynamic economy.

“The globalisation of supply chains has led to different parts of the world specialising in production of different products. We all benefited from it for a long time. There might not be capacity in supply chains to plug the gaps in another disruption and we are vulnerable unless we learn lessons and build organisational and supply chain resilience.”

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