Jim Gloriod has 19 years of experience working in insurance, 12 of which have been with Aon. He currently serves as the resident managing director of the St. Louis office of Aon Risk Services. Gloriod specializes in helping companies in the energy and construction industries manage their risks.
Q. How will managing risk help your bottom line?
It’s important when it comes to managing risk and buying insurance to make informed decisions like you make any other decision in your organization as far as capital allocation goes. If you’re making informed decisions, which provide you with coverage for losses when they occur, that will help protect your balance sheet and income statements whether it’s from a first-party loss, such as a fire, or a third-party loss, such as a products liability claim.
Q. Are companies facing different risks today, and what are those risks?
Absolutely companies are facing risks that appeared remote just a couple of years ago. Some of the risks are lack of credit, reduced consumer spending and the counter-party risks that they may face. I think that the other important thing is that many of our clients or many organizations are under pressure to reduce spending and they have less resources within their organization, so it’s a balance of how do you properly protect your balance sheet and your income statement while having less resources and spending less money.
Q. Are companies cutting the amount of insurance they buy, and what should companies be covered under today?
People are buying the insurance differently than they were before. Companies are analyzing the retention that they take, the amount of limits that they buy and what coverages are absolutely necessary to have. They need to make sure that they are meeting their statutory requirements as well as loan covenants. But in addition to that, companies need to really look at what risks they are facing and make individual decisions on how critical those risks are to their organization and where should they buy insurance versus where do they have the ability to cut back.