CASE STUDY
Manufacturing, Logistics, Warehouse
Consumer Goods ($700M Sales, 700 Employees)
The Company represented had claims frequency issues going unchecked causing pricing and program availability compromised. Guaranteed Cost Workers Compensation was in excess of $10M and the team thought they had no options outside of State Funds and Excess & Surplus markets. Incumbent broker and others brought forward new markets that had similar approaches.
THE SCENARIO
Our Logistics and Manufacturing teams utilized Loss and Collateral Analyses in order to provide clarity around Loss Sensitive and Alternative Risk Solutions. The data suggested they can retain a significant amount of risk and still save millions of dollars on the overall Total Cost of Risk.
THE FINDINGS
The insured decided to take a chance at Alternative Risk Transfer and utilized Lockton's Alternative Risk team to create a self funded program. YoY they anticipate a Total Cost of Risk (TCOR) savings of $2m - $5m based on a number of factors.
THE RESULT
CASE STUDY
Regional General Contractor
($250M Sales, 200 Employees)
The contractor had a recent c-suite change and did not have systems in place for oversight of their Risk Management program. The incumbent broker was a smaller regional operation with fragmented services and had not been proactive in their services. The program had 4 expiration dates, 4 different carriers and was placed with all Excess & Surplus lines carriers.
THE SCENARIO
I worked with my Construction specific team to analyze the program which resulted in uncovering several inefficiencies in the program's terms, conditions and underwriting data. The program had been written based on $60M in revenue when the company would finish the year at $200M; this generated a substantial additional premium bill that was not budgeted for. We also found wording in the Excess/Umbrella policy that suggested the underlying Auto Liability was not scheduled onto the program.
THE FINDINGS
The client trusted our team to update the program, align expiration dates, and ultimately market the program the next year with one concise expiration date. The result was a single carrier program with 30% savings YoY due to increased buying power and a clear understanding of the true risk by the underwriting team.
THE RESULT
CASE STUDY
Manufacturing, Nutriceutical/Dietary Supplements
($180M Sales, 300 Employees)
The client had worked with a family friend since the inception of the company, leaving the CEO's view of business partners subjective. The company suffered several losses from employee theft, to litigated Workers Compensation claims; many litigated by the same lawyer. The company also saw a class action lawsuit from a plaintiff's attorney that was known for targeting Dietary Supplement Manufacturers for their labeling and packaging practices.
THE SCENARIO
The claims were unsubstantiated, but we needed proof. The executive Claims representatives worked with the company's General Counsel to gather data supporting their stance. Together we gathered video evidence to support the Employee Theft claims which allowed the Crime carrier to subrogate for their loss. The class action "Packing" claims were also unsupported and in conjunction with industry association experts, were ultimately cleared with no settlement.
THE FINDINGS
The client entrusted us to support their entire business insurance and benefits business for several years until they ultimately sold to Private Equity. Prior to selling, the Due Diligence report uncovered a track record of safety practices, insurance cost and coverages, and overall superior company health thanks to the collaboration with our teams.
THE RESULT
CASE STUDY
M&A: Wholesale Distribution add-on
Our private equity company represented quickly signed a Letter of Intent with a target acquisition, which happened to be a competitor. Lockton was engaged by the deal teams quickly. We promptly gained access to the data room and began our pre-acquisition due diligence on Insurance, Employee Benefits and reviews their needs for Tax Liability and Reps & Warranties. The deal was set to close within a four-month time frame, so we worked quickly and efficiently to drive clarity on all fronts.
THE SCENARIO
Our Transactional Advisory teams quickly gathered the data list including financials, Company Information Memorandum (CIM) and all applicable information from the target company. Within three weeks our teams turned full diligence reviews that detailed the target was underinsured based on industry benchmarks from an Employee Benefits and Excess Liability perspective.
THE FINDINGS
The client entrusted us to support their entire business insurance and benefits business for several years until they ultimately sold to Private Equity. Prior to selling, the Due Diligence report uncovered a track record of safety practices, insurance cost and coverages, and overall superior company health thanks to the collaboration with our teams.
THE RESULT
CASE STUDY
Real Estate & Development ($500M Assets, $100M Annual Project Costs)
The company represented had was seeking a broker partner who could streamline efficiencies with both permanent placements and their project specific needs (Owner Controlled Insurance Programs, Builders Risk, Owners Protective). We spent several hours learning about past, present and future needs and goals of the company - ultimately uncovering a severe need for outsourcing to a dedicated team as opposed to their fragmented approach. The company managed their historical program under the “Build as we go” model as opposed to a proactive approach. They also wanted to build a program that added value to their third-party management clientele.
THE SCENARIO
The company had asset classes in Multi-Family, Office and Industrial. Lockton’s dedicated Real Estate team was able to consolidate the vast majority of their program, create an allocation schedule to manage investors, and build a third-party management program that allowed their clients to enroll in a well-managed program at a better cost.
THE FINDINGS
The client was able to save 12% on their total cost of risk and boost profitability within their third party management division. We also fund their Builders Risk program could be better suited for a "rolling" program instead of buying a single build program. Finally, our team built out a new technology platform that illustrates (in real time) how their assets are performing, where to drive their insurance dollars most effectively and ultimately manage information and smart decision making.
THE RESULT
CASE STUDY
Family Office (Real Estate, Construction, Aviation and Manufacturing)
I was approached by a $3B family office who had a single CFO managing their entire risk management platform. The CFO was inundated with 4-6 brokers working on the portfolio in a given year. Their goal was to find a single broker that could manage all aspects of their risk and spend less time with risk management.
THE SCENARIO
The claims were unsubstantiated, but we needed proof. The executive Claims representatives worked with the company's General Counsel to gather data supporting their stance. Together we gathered video evidence to support the Employee Theft claims which allowed the Crime carrier to subrogate for their loss. The class action "Packing" claims were also unsupported and in conjunction with industry association experts, were ultimately cleared with no settlement.
THE FINDINGS
The CFO now had one concise team to manage their entire portfolio, a monthly call to discuss open items, analytics and data to support risk management decisions and one partner to connect with if they needed anything within the world of Lockton. We assisted them in building out safety and loss control efforts across all companies. Lastly, Lockton created a monthly trend report for their claims that helped operating companies gain insights to where their training efforts were best focused.
THE RESULT