How a Large Company Was Able to Reduce Its Insurance Cost and Manage Risk
Background & Challenges
The client was a spin out of a larger chemical entity. The Day 1 insurance risk program was designed by an insurance broker. After a year in standalone operation, the client suffered an $80M uninsured business interruption due to the structure of its business interruption waiting period deductible. The client was not aware the deductible existed, and it created a lack of confidence in the risk management program.
Approach
The BDO team conducted a current state assessment to determine efficiency of (1) the cost and structure of the insurance risk program, (2) the insurance brokers performance and compensation structure, and (3) the insurance risk staffing structure.
Client Impact
BDO restructured the insurance program and conducted a brokerage competition to achieve a $2.5M, or 25% reduction, in premium and brokerage cost for the client. Additionally, BDO entered into a long term, outsource risk staffing model to manage the insurance risk function for the client.
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