A large, privately held manufacturer has grown to be one of the largest producers of their product in the country, becoming a major supplier to big box retailers over the past 60 years.

The insured had been with their current carrier for 10+ years. This relationship started during a growth period for the insured, in which they were also experiencing some volatility in the claims experience, requiring them to move to loss sensitive program. As customary, when an insured moves from a guaranteed cost program to a loss sensitive program, the insured is advised to purchase the lowest retentions that they are able when the program is bound.

Since then, the program, structure and carrier ran on ‘auto-pilot’, renewing year over year without much change. Renewal discussions are typically centered around current market conditions and rate. During that period, the insured’s business continued to expand and adopt stronger safety policies and procedures.

It became clear after looking into their account, that we could maximize the efficiency of their insurance program. Our goal was to provide them with a stable, long-term program, that lowered their fixed costs and significantly improved their total cost of risk.

We particularly focused on the workers’ compensation policy, where we could see the bulk of their premium was driven by the $500k excess of $500k loss layer. Since the broker had limited experience with the type of program we were offering, extra time was spent with both the broker and the customer, explaining nuances and answering their questions. 

The insured and broker worked with us to identify a program structure that would be appropriate for their financial strength and loss experience. We were able to provide options with fixed cost reductions of 43%, provide cost certainty with a sustainable and stable rate environment, lower their total cost of risk, as well as provide a creative solution to collateral, all while they wind down collateral with their existing carrier.