BOKRIM Thinking

A recent SAM risk assessment more than paid for itself

Between March and May 2020, BOKRIM helped an organization improve their SAM risk management rating from a C to an A – and in so doing, enabled them to reverse the non-renewal notice on their SAM insurance (for claims) and renew their policy ‘as expiring’.

BOKRIM was asked to help an organization overcome the non-renewal notice they had received from their SAM liability insurer. The non-renewal was the result of significant (8 figure) paid and outstanding SAM claims.

BOKRIM first assessed the current SAM risk management posture of the 20 semi-autonomous entities within the organization.  Their average SAM risk management rating when first rated was C; the lowest was NR (Not Rated), the best was a B. 

BOKRIM then cherry-picked the best practices from across the entities and developed a single set of policies and procedures for all the entities based on the best practices.  The policies and procedures were based on the framework of the BOKRIM SAM risk management system.

All but two of the entities within the organization agreed to implement the changes necessary to adopt the new system.  The two were not able to because of the impact of coronavirus on their current activities. When the others finish changing their current approaches, which with coronavirus to deal with won’t be as soon as would normally be the case, they will all have a SAM risk management rating of A.

Based on the:

  • improvement in the organization’s SAM risk management delivered as part of the new policies and procedures document,
  • information BOKRIM delivered as part of the assessment, the rating, and the policies and procedures; and
  • quality of the SAM risk management this organization now has and will continue to have as a consequence of the system

the SAM insurer not only withdrew their non-renewal, they also renewed the policy ‘as expiring’.  In June 2020…. After significant paid claims…

The insurer didn’t need to raise the premium because of the demonstrable reduction in the risk they were accepting.  The costs of the BOKRIM assessment were less than the premium increase would have been just in the current rising market. The cost of adapting their SAM risk management controls isn’t known yet but, based on current expectations, they will not be material because most of the proposed changes were to process, not physical infrastructure. 

So, the project has already paid for itself, the organization has materially better SAM risk management and less SAM risk.  And it has SAM insurance.  The insurer has less risk for the same premium as last year. 

Both insured and insurer are in a far better position than they were before the BOKRIM assessment.

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