Working with brokers and clients to protect property is a rewarding aspect of our business. A recent example of such teamwork involves a client with large warehouse and distribution centers in Canada. When AFM began insuring this client in 2009, it was vulnerable and ranked in the bottom quartile in RiskMark®, our risk benchmarking tool. Today, this client's business is well protected and boasts a RiskMark score in the top quartile.
How did this transformation occur? This success story is a credit to the broker who worked with our mutual client to explain the value of AFM's engineering services, a client who recognized the importance of investing in long-term strategies to make its business stronger and AFM's loss prevention engineering expertise.
At the beginning of our relationship, the broker, client and AFM worked to understand and evaluate exposures. Together we developed detailed risk improvement action plans, starting with the most cost effective. Here are a few ways the client was able to improve risk immediately without spending much money:
- Creating formal human element programs
- Training on hot work procedures
- Training on regular testing of sprinkler system equipment
- Making storage arrangement modifications
The client also wanted to make sure their facilities were highly protected risks (HPR) and we were able to help them over several years to reach their goal. Approximately 40 recommendations totaling US$5 billion in loss expectancies (LEs) were eliminated. For example:
- Obstructed sprinklers were corrected
- Aerosol cages were improved
- Diesel fuel safeguards were provided on all emergency generators and fuel tanks
- Ignitable liquids were removed from the warehouse and stored in trailers located outdoors. A minimal amount was kept inside and separated from racking.
These measures helped to build our long-term partnership, which was further evidenced in 2014, when the client decided to build an 800,000-square-foot (74,300-square-meter) warehouse/distribution center with guidance from AFM. We worked with the broker and client, and followed up on the project over a two-year period to make sure this new facility was protected to HPR standards. Once completed, this new facility became the heart of their business.
With a RiskMark rating that is one of the best in its class, this client now has peace of mind and can concentrate on running and growing its business. RiskMark, which is available on AFM Online, our broker and client extranet, is one of AFM's three predictive analytics tools that help brokers and clients visualize and mitigate risk. For more information on these tools, read "Take the Guesswork Out of Risk Management," a 2016 enVision article.