Quality Assurance - Overview

QBE PI has developed a unique range of quality assurance-based risk management (QARM) services reflecting the diversity of our client base. Our QARM services are available to clients of all sizes, democratising risk management, a process that is commonly perceived as the preserve of larger organisations. Many of our QARM services are approved by leading professional bodies (e.g. RIBA, the Solicitors Regulation Authority) and qualify for Continuous Professional Development (CPD) points.

Effective risk management is an essential feature of all successful organisations and is one of our key underwriting considerations. Our statistical analysis tells us that, on average, organisations that do not engage in our risk assessment process experience claims values 25% higher than those firms that do. The primary purpose of our QARM service is, therefore, to raise awareness of risk management issues and to encourage the adoption of quality assurance principles to manage risk. It is not solely about results achieved, and we do not expect all firms to score 100%. Rather, we aim to work with our clients to improve their management processes so that the likelihood and value of claims is reduced. We recognise that this process takes time, but this initiative is wholly consistent with our approach of continuity, stability, and our long-term commitment to the professional indemnity market.

Our primary QARM service for clients, either insured or seeking insurance under our PI schemes, is the self-assessment process. This uses a questionnaire to:

Compare the performance of organisations within their peer group

• Form the basis of an effective risk management process
• Provide underwriters with a detailed overview of our clients and their respective current management standards in order to make informed underwriting decisions when tailoring coverage

The advantages of performing remote assessments using a questionnaire are numerous:

• The questionnaire can be completed in your own time, in one session or in several, saved and returned to as many times as needed
• The exercise can be completed as an individual or group event
• Those completing the comprehensive questionnaire may benefit from CPD
• It can be revisited and used an as annual review tool to minimise risk assessment costs
• Whilst you will not benefit from real-time feedback and the 'hands-on' approach of a personal review, it will save on consultant costs, potentially amounting to several thousand pounds and the disruption that consultant audits can cause;
• Whilst completing the questionnaire, responding to any recommendations and implementing additional risk management controls will each have associated costs, the savings from reduced errors, complaints and claims should more than outweigh any costs incurred in the exercise.

The self-assessment process is completed in 2 simple steps.

Step One – complete the questionnaire by using MS Excel or, where available, printed versions. The questionnaire consists of two completion options:

• Standard Form - a basic set of questions representing high risk operational factors
• Comprehensive Form - a comprehensive questions set that provides an analysis of all operational factors covered by the appropriate QA Standard and best practice principles drawn from other standards including Investors in People and ISO9001

Returned questionnaires are analysed by us to prepare a report that includes prioritised action points. The report is delivered in hard copy, with additional information available on this website. Participating firms benefit from an impartial review of their business and administrative practices.

• Step Two - review the written report. A detailed checklist will assist you in addressing issues that might require attention – a feedback process enables you to submit changes that you implement as a result of this process to us for re-evaluation

The QARM questionnaire process is completely free of charge – a health check against an industry standard could cost as much as £3,000 from an independent consultant.

For details of CPD awards and other QBE PI consultancy services, please refer to the professions page relevant to you.

Our QARM services are available to all clients, regardless of their size, and emphasise s the importance we attach to the role of risk optimisation in insurance. The International Organization for Standardization (ISO) defines risk as the “combination of the ‘probability’ of an ‘event’ and its ‘consequences’”. ‘Risk optimisation’ is a process designed to minimise negative ‘consequences’ and their respective ‘probabilities’. Our services are designed to help promote: -

• Understanding of claims causation events – we have extensive knowledge of a wide range of organisations and the application of effective management systems to their respective business structures. This enables us to identify key operational and management processes that, if performing badly, would increase the likelihood of sustaining claims. Combined with our ability to perform individual insured and whole portfolio statistical analysis, we are well positioned to identify actual and potential causes of claims.
• Reduction in claims probability – by incorporating our claims event knowledge into our support services, we are able to offer advice regarding operational and management enhancements designed to reduce the probability of a claim. To maximise the effectiveness of our recommendations, we provide a prioritisation protocol enabling clients to tackle key deficiencies promptly.
• Control of claims consequences – through the application of effective customer complaints handling systems coupled with an enhanced understanding on the part of claims handlers of our clients’ operations.

Quality Assurance & Risk Assessment: QA standards such as ISO 9001 are highly developed guidelines designed to provide a practical framework for organisations that enable them to achieve best operating standards and to continuously improve performance. More importantly, in the context of risk evaluation, QA standards introduce objective performance measurability that, although designed for the purpose of assessment and award of kite marks, can be introduced to the underwriting process as an effective risk identification tool, measuring client management standards against best practice targets. By using our QA based assessment processes, a detailed risk analysis of each insured is achieved. The accumulated data is then analysed to perform whole portfolio risk optimisation.

Quality Assurance & Risk Management: risk management and quality assurance are often considered to be synonymous; techniques to control the inherent risks associated with conducting business. In fact, they differ both in their direction of approach and scope.

Risk management is often associated with a ‘top down’ approach that is dependent upon the accurate identification of risk events leading to the development of a set of risk controls. This reactive approach creates a lag in risk response, is often subjective and does not lend itself to consistently measurable procedures. Quality Assurance is a ‘bottom up’ approach that establishes within an organisation a foundation of best practice across eight quality management principles, namely: -

• Customer focus
• Leadership
• Involvement of people
• Process approach
• Systems approach to management
• Continual improvement
• Factual approach to decision making
• Mutually beneficial supplier relationships

These principles create a comprehensive approach to risk optimisation, provide a framework to guide clients towards continuously improving performance and are measurable against objective performance targets required by standards such as ISO 9001.