Introduction In today’s complex design and construction environment, it is becoming increasingly difficult for design firms to remain profitable. To prosper, design professionals need to identify, understand, and manage their risks.
How to Use This Publication This publication is divided into three major components. The first, “Industry Trends,” will help you identify: • what project types are expected to see an increase in construction and which are not; • what project types may present greater risks; and • certain factors related to claims trends and issues that may influence the design and construction industry in the coming years. The second section, “Evaluating Your Risk,” looks at claims from eight different factors—client, project, consultants, contractor, other parties, fee, your firm, and contracts— and presents, where appropriate, a statistical picture, case scenarios, and risk management guidance. It is this section where firms will be able to benchmark themselves and establish future goals. The third section, “Tools to Help Identify, Assess, and Manage Project Risks,” includes a useful risk management matrix for any project and a listing of some of Victor’s risk management resources. Used in conjunction with the first two sections, this matrix and our resources can help firms manage current project risks and measure performance over time. Why This Publication Is Valuable to You The information in this publication has direct value in your firm’s management activities. It will help you identify progress as well as problems within the design and construction industry, enabling you to assess the potential for taking your firm into a successful future. Finally, in addition to the information in this publication, additional benchmarking and claims and case studies located at our School of Risk Management can be used by firms attempting to mark where they are today and where they want and need to be to remain profitable and successful.
For more than 60 years, Victor and CNA have been collecting information on claims against our policyholders and have analyzed the data to create risk management resources. From Risk to Profit: Benchmarking and Claims Studies looks at eight key factors Victor believes, based on claims studies, are crucial in assessing and developing appropriate responses to risk.
Why Benchmarking and Claims Studies Are Important
The design professional’s challenge in today’s competitive environment is to find ways to become more efficient and to reduce costs while improving and expanding services. The first step in meeting this challenge is to create benchmarks of your financial and competitive position and your preferred status in both the near and distant future. The information you need includes an analysis of your firm’s practice, a vision of how you want your firm to be organized and grow over the next few years, and the ability to benchmark your firm through comparison of your firm to similar firms. From Risk to Profit will allow you to examine industry trends and emerging issues, compare your firm to peer firms, and examine your firm’s experience with clients, project types, consultants, construction entities, other parties, fees, and contracts. This information will help you analyze your firm’s performance compared to peer firms and against your firm’s business goals. The claims data in this publication are based on roughly 4,000 claims per year presented in five and ten-year periods from 2009 through 2018. The figures represent claims dollars paid above our policyholder’s deductible obligations.
4 • From Risk to Profit - Benchmarking and Claims Studies
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