Building a “Loss-Side” Culture

Over the last few years, Federated’s risk management initiatives have evolved into a “loss-side culture”—a belief shared with successful business owners that risk management practices can help strengthen a company at the core. Incorporating safety throughout all operations helps prevent unnecessary losses and preserve profits. It improves efficiency, boosts employee morale, and bolsters the company’s reputation in the community. Employees are more likely to appreciate their roles and contribute more to the company’s success. And, customers feel more comfortable doing business with a company that cares about their well-being before and after the sale.

Federated has found that the greatest opportunity to help our clients control loss costs and thereby save profits, is to address the frequency and severity of losses. Any type of loss adds expense for a business.  Besides the costs of increased insurance premiums and deductibles, hidden costs associated with lost production, replacing or retraining employees, and losing customers can eat away profits. Over time, if income received from sales can’t keep up with these loss costs, the choice is either to raise prices or do nothing—in which case the difference must come from savings or profits or employee benefits.

These choices affect your long-term ability to compete with other businesses. You may not be able to provide the best customer service, offer new products, or expand in your marketplace. In essence, loss costs limit your ability to gain new customers and retain profitable business. Finally, they reduce the resources available for salaries and employee benefit programs.

How can you establish a loss-side culture?

A loss-side culture must be a shared commitment by management and employees at all levels to prevent losses and retain profits. These practices can help you establish a loss-side culture:

􀂃 Monitor existing trends in your loss experience.

􀂃 Pay attention to new and emerging loss experience that threatens profitability or survival of your business.

􀂃 Consult with your industry peers and your trade associations to identify, understand, and help solve your industry’s loss issues.

􀂃 Take advantage of risk management programs offered by Federated, your trade association, or industry resources to help you prevent losses.

Remember, when an accident happens it involves real people—your employees or customers and their families—as well as you and your family. All too often, accidents diminish the quality of life we take for granted. Accidents drain the bottom line profits of a business through direct and hidden costs.  Federated can help you establish a loss-side culture and provide quality resources that will help your business thrive and protect the people who are most important to you.

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