Case Study:
Redesigning an Outdated Program
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Program:
A holding company for refineries, marine terminals and gas stations had down-sized their operations in the last few years, but their insurance program had remained unchanged, leaving serious gaps in coverage. Their loss prevention initiatives had resulted in low claims severity and frequency but these had not been reflected in lower premium pricing.
The company carried twenty three insurance policies underwritten by twelve separate insurers; each policy had its own minimum premium structure, which artifically inflated their premiums.
Action:
Our first move was to "diagram" the company's existing insurance program in order to pinpoint what was missing and what needed to be altered.
We then "manuscripted" a new policy incorporating broadened coverage and solicited fewer but more competitive insurers who would recognize and reward the company's loss control efforts. Each of these insurers agreed to underwrite a "quota share" program, with a pre-agreed participation of the risk all governed by the same, broadened program language.
Results:
The new insurance program enhanced coverage to incorporate protection for all of the recent changes in their business, reduced the deductibles by two-thirds, and the insurance costs by one-half.
