Author: Peter Persuitti
Thanks for taking the time to read our Nonprofit Beat. We always want to lift up ideas, and share analytics, content and experiences to help you think differently and take proactive steps to grow and succeed. In some cases doing the same things as in the past and expecting different outcomes has often aligned with the "insanity" quote. And so, our daily efforts with our clients bring us so much insight and perspective that we wanted to share a couple of recent experiences to help you think differently and change.
Late fall 2021, we attended a national conference of nonprofits focused on serving the marginalized in society — homeless shelters, drug addiction centers and places of refuge for those suffering from food insecurity. Recall the atmosphere of the pandemic circling, and yet this group managed to bring leaders together. Their purpose was fascinating — to discuss "things we will never do again." "Nevermore" was the theme.
Yes, the pandemic is clearly having an impact on how we think, act, behave and change. As the conference unfolded and after breakout groups weaved the theme of "Nevermore" into the discussions, it was clear that their impact and success during the pandemic was groundbreaking and gave them the confidence to truly shed some earlier thinking and traditional ways of doing business and serving. How's this one — "we will never have another gala." The CEO of a large urban organization talked about the power of using technology and raising funds (telethon) that actually quadrupled the result. Time and time again, we saw the power of technology mobilized in new and different ways that allowed them to raise more funds. We are confident that they will find new ways to bring back the in-person exchanges and relationship building, so important to donor cultivation, but the pandemic opened up new pathways to growth.
Recently we had a strategic meeting with one of our leading nonprofit specialized property and casualty (P&C) insurance carriers to review loss ratios and appetite and to get a sense of market conditions, especially for its reinsurance. As one of its leading brokers and sources of distribution, we present a valued network of distribution for the carrier, and there is also a great opportunity to share analytics and find ways to help nonprofits reclaim more dollars to mission (i.e., pay less in insurance without compromising coverage).
Ultimately, the carrier (with several leaders of their risk control program present) wanted to talk about risk management and risk control — asking the question "how can we get our nonprofit insureds to use our free resources and tools more?" For example, we are all talking about the impact of "social inflation" on abuse claims and outcomes, and the threat this poses to offering expanded limits of coverage at affordable prices.
The elephant in the room — have limits become targets for plaintiffs? One report the carrier shared isolated those nonprofits with higher limits and the troubling evidence of not using the free online safe environments training afforded by the carrier. Yes, this would be troublesome to the carrier and perhaps may lead to "nevermore" offering terms, let alone a renewal with sharp increases and reduced limits.
As leaders in risk consulting, we are proactively confronting "the risk" of seeking very high excess limits that have become targets, particularly sexual abuse and molestation (SAM) limits. Imagine you have a loss and it triggers a full limit loss, and you come to a renewal. For the benefit of all involved, we need to do more to get traction on the remarkable resources some specialist carriers provide to insureds to make such limits unnecessary. Duty of care is more important.
