Scary familiarity is probably the best way to describe the experience, but in this month's 'Raising The Standard', I wanted to highlight some of the points which I picked up at the NEC as reflecting on the NSI, since perhaps they illuminate some wider trends in the industry.
Growth and cost combined
The first announcement we made at IFSEC concerned growth. Quite startling growth, considering two important background factors. One is historical. Over several years, the growth of NSI schemes has been relatively static, with new companies replacing the old at roughly maintenance level. Mergers, acquisitions, changes in organisational structure and – on occasion – bankruptcies have kept pace with new companies climbing aboard.
The second factor is cost. Due to a fee review in 2003, the NSI is now charging roughly 15% more for its services than it did in the previous 12 months. From our point of view, this move was entirely necessary to adjust our 'not-for-profit' stance (a principle which we had been taking rather too literally) so that it produced 'just a little profit', mainly for marketing.
The growth itself is interesting, too. Across all NSI schemes, net growth was 6%. This takes into account all the usual mergers and acquisitions activity, etc, but still leaves a healthy surplus. Indeed, we have passed the 1,000 company mark for the first time.
In the systems sector, the major changes have been seen in the Silver scheme (which now boasts over 100 companies). In guarding, the change has occurred at all levels – perhaps fuelled by the imminent arrival of Security Industry Authority licensing? Growth has also been significant in the fire, environmental management and Health and Safety management schemes.
Appetite for higher standards
What does all this tell us about the state of the industry? Despite an increase in fees, there's now a growing appetite for higher standards. It's hugely reassuring for all of us to see that fresh blood is being transfused and that there's a change in concentration towards the top end of the market which, de facto, must be at the expense of the bottom end. It's optimistic news at a time when we must all be looking out for the signs of change, and to index trends.
From a standards perspective, another major piece of news was the long-awaited change in the complexion of insurance support and recognition for the guarding and fire sectors. There has been implicit support for many years, and I'd like to thank those insurance companies whose approach has been forward-looking. However, what we really needed was a formal public announcement. That came just in time for IFSEC.
Regular readers of this column will have seen me railing against the inconsistencies of risk management whereby an electronic security system will receive unequivocal specification, while the two other components which may make up the protection of an installation – namely the guarding (or human) element and the fire systems – receive scant acknowledgement. It makes sense that these three elements are harmonised and integrated if a given premises is to be properly protected.
By developing a shorthand methodology of Gold, Silver and Bronze medals, we have now made it possible for comparative specification to be applied to integrated risks in the confidence that the NSI's inspectors will apply equivalent rigour to all three.
Thus AXA has announced that, in future, the company will specify NSI Guarding Gold and NSI Fire Gold schemes as its standard (in much the same vein as the insurer has already applied a similar measure to the systems sector through the NSI's NACOSS Gold scheme).
Despite an increase in fees, there’s now a growing appetite for higher standards. It’s hugely reassuring for all of us to see that fresh blood is being transfused, and there’s a change in concentration towards the top end of the market
Excellent news, then, for the guarding and fire companies whose proposition to their customers has just been greatly strengthened, and whose belief in high standards has been upheld. It's also good news for the customer, whose confidence in the security and fire industries has been endorsed by a stakeholder for whom commercial needs are necessarily stark. If increasing standards lower risks and premiums, which they surely will, every party will make a success of this new arrangement.
The implicit support from other insurers will hopefully soon become explicit, too. So here again is a trend for the future.
Our last piece of news from IFSEC 2004 concerned a workshop which we ran to hear, at first hand, what the approved companies have to say about us. It's difficult to hold a 'hats off' discussion when a company is under inspection. However, if we're to get under the skin of the relationship we simply must have that kind of 'warts-and-all' exchange.
My own view is that, when all's said and done, it's the human interaction between the inspector and the company concerned which makes voluntary regulation work on the ground. Understand that and you understand everything about the relationship.
Consequently, we sought out a number of representatives from companies in all three sectors, ensured that there was going to be a 'healthy' mixture of views and invited Professor Martin Gill (director of Perpetuity Research and Consultancy International) as a neutral 'referee' to chair the workshop.
We asked questions about the relationship which I suppose we'd never dared ask before, and duly received some insightful answers. I'm not going to share them all with you here, but I promise to do so in the next 'Raising The Standard'. They make for fascinating reading.
The trend is positive
We still have some way to go, but have the approved companies' support on our journey. The trend is positive, healthy and optimistic.
If we can look back and draw forward the direction of the industry from a few indicators which are there to be pored over, the future does indeed look bright. We're all guilty of telling each other that 'there's a lot going on', and then perhaps shying away from the next step – which is to define whether or not what's going on is going on in the right way.
Based on these simple measures – imperfect perhaps, but a little better than chicken bones – my prediction is that it is.
Source
SMT
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