Brand Story – Harnessing insurance as an unconventional, effective way to strengthen balance sheets.
Economic inflation highlights the vulnerabilities unique to nonprofits, who rely on donations, volunteers and skilled staff to operate. PayneWest Insurance tailors strategies to help this critical sector navigate economic volatility and, along the way, build stronger balance sheets and brighter futures.
While certain realities remain unavoidable, PayneWest optimizes the controllable variables. By helping organizations reduce costs, address risk and implement long-term strategic plans, they can leverage risk management as a true financial tool rather than a passively bought product and service.
“Facing the same risks as their for-profit counterparts, but typically with more limited resources, we go beyond the industry’s standard of covering losses like fire or theft,” explains Dominique Easterling, Business Insurance Executive with PayneWest Insurance. “We differ with discussing known and emerging risks, then develop a plan around managing them by categorizing each as either a business, strategic or hazard-related exposure.”
With its recent acquisition by Marsh & McLennan Agency LLC, PayneWest now draws on decades of experience serving over 5,000 nonprofit clients to unearth opportunities that aim to reduce costs, improve coverage terms and add specialized value for its clients.
“When proposing an insurance package to our exclusive carriers, we approach the submission with an underwriter’s point of view. More times than not, when we review an organization’s coverage, we often determine that the carrier didn’t receive the adequate information to apply credits that could have reduced their premiums,” Easterling adds. “We help mitigate risks to make their request for coverage attractive to underwriters.”
Improving an organization’s coverage or, ideally, decreasing its monthly premium, could be as simple as adding fire extinguishers at exit points and communicating those changes to its carrier. Proper risk management can affect borrowing too, positioning organizations as more viable lending opportunities to banks, yielding better loan terms.
Brokers have typically and historically sold coverage and reactively managed claims, but PayneWest offers a proactive partnership: drafting strategic plans that stop organizations from potentially wasting money every month on avoidable costs and unaddressed risks.
This matters for every organization, but with nonprofits the implications are even higher due to the responsibility to ensure that their dollars make it to their intended causes.
To deliver this level of tailored support, PayneWest conducts a thorough risk analysis— the first of a four-step process—touring facilities, examining safety protocols, reviewing vendor contracts, conducting service surveys, carrying out crisis and disaster planning, and beyond.
“We often uncover verbiage in vendor contracts that isn’t correct, unnecessarily exposing the nonprofit,” Easterling says. “With changes to this contract verbiage, responsibility can be transferred back to the vendor when claim events arise at no fault to the organization.”
Next, comes a customized solutions report that illustrates how certain changes will grow the nonprofit’s balance sheet and reduce risk. Step three follows an implementation schedule that details how these strategies will be applied and their expected returns and results.
Importantly, step four involves a recurring stewardship review, allowing the organization to address the program’s performance and revise business needs on an ongoing basis.
“Commonly, people don’t hear from their brokers until their policy renewal approaches,” Easterling notes. “Our high-touch model of reviews differs in that regard. Maybe a risk has now gone away. We can advocate that through premium reduction or higher limits.”
Already spread thin, many nonprofits rarely go back to their brokers and review insurance plans once they are implemented, leading to major gaps as organizations evolve & grow.
“Specific risks to an organization can change often. I was recently helping a nonprofit that hosts camps and was reviewing its coverage in place for holding public events,” Easterling recalls. “Its policy’s verbiage only covered a select age group of youth, but its camp demographic was much broader. Meaning if there was an injury or incident at the camp, the organization was exposed to having to potentially cover that loss out of pocket.”
An organization’s natural evolution is not the only shifting factor: The risk landscape itself can change too, with new and emerging risks always on the horizon.
“Data breaches are happening daily, and nonprofits are often low-hanging fruit,” he adds. “Many nonprofits do not put a focus on having a robust cybersecurity strategy. They almost always have an online presence but are routinely ill-prepared to defend against ransomware and cyberattacks. With the wide variety of risks to businesses, it is a common saying in our industry that ‘it is not if, but when’.”
Beyond cyber coverage, Easterling also sees more traditional risks regularly unaddressed. A lack of Directors and Officers coverage can leave executives, their personal assets and even their spouses exposed to legal action, all while the organization itself is protected.
“Jaws have dropped when I explain it this way,” he says. “It is a relatively inexpensive coverage that can cover and defend a plethora of risk exposures and claim scenarios.”
In PayneWest’s experience, everything is linked: inflation, risk, employee retention, reputation, financial robustness…For example, a reduced budget and staff can shrink a nonprofit’s service offerings, forcing it to shutter longstanding programs and end key relationships, many of which may never return.
“Inflation has really affected retention,” Easterling elaborates. “Businesses are having a hard time retaining great talent because of a tight labor market, and that’s leading to rampant inflation of salaries. As if turnover wasn’t expensive enough, replacement is likely going to cost even more in total comp packages for these organizations.”
To strengthen an organization, PayneWest looks to an extensive arsenal of solutions, such as the right employee health and benefits package, which can tip the retention scale favorably. It works creatively to help companies implement cost-saving strategies: decreasing premiums, adopting leaner models and transitioning to new technologies.
The misperception that insurance companies only sell products might dissuade nonprofits from turning to one for support with complex challenges, but PayneWest reminds them that risk management, when retooled with long-term strategy in mind, is a gamechanger.
While no one can control the economy, nonprofits can still strategize to put themselves in an optimal position to weather storms and thrive for their communities, something PayneWest and its mission strive to achieve year after year.
Brand stories are paid content articles that allow Oregon Business advertisers to share news about their organizations and engage with readers on business and public policy issues. The stories are produced in house by the Oregon Business marketing department. For more information, contact associate publisher Courtney Kutzman.