Big Savings for an Auto Manufacturer Start by Re-structuring Their Casualty ProgramA tier 1 automotive manufacturer with domestic and foreign manufacturing locations was having difficulty getting insurers to even quote on their risk. Following an independent management review, UIC’s high level strategic analysis unearthed three different issues embedded in their risk management program. We created a blueprint to entirely re-structure the casualty program, netting the client broader coverage with a premium savings of over $1,000,000 (that’s a 42% savings!).
The auto manufacturer has several different product line streams in the high-risk category. As a result, they were managing a sizable casualty insurance program with significant deductibles/retentions. The client also had a lengthy loss history, but had dramatically reversed the trend over the past two years by divesting themselves of specific operational segments. Their current insurance broker had advised them that most insurers wouldn’t even quote on their risk management program because of their loss history, and none of those insurers had the foresight to take into consideration the recent changes the auto manufacturer had made to mitigate this loss pattern.
The UIC, Inc. Process and Mantra: AUDIT | MITIGATE | NEGOTIATE | MANAGE
The senior management for the automotive manufacturer extensively vetted UIC, Inc. for our overall risk management experience, as well as our expertise in the manufacturing sector. The client had two goals — to achieve broader coverages while lowering their products liability deductible. The broader coverages would shore up their overall risk management program, and a lower deductible would give them a competitive advantage in the marketplace
UIC, Inc. performed an independent risk management audit, and was provided complete access to senior management and all appropriate information. Our team not only reviewed the breadth and depth of insurance coverage in place, but also interviewed senior management on the existing casualty program. Our team had in-depth discussions with senior management regarding their recent divestitures to see if any additional spin-offs could further improve the current financial picture. UIC, Inc. noted three red-flag issues:
- Various ownerships with different parent companies
- Inadequate product design coverage
- Uncapped liabilities on their deductibles/retentions
We proposed a complete restructure of their casualty program to achieve their risk management goals within a maximum program cost.
The proposed overhaul of the casualty program received the full support of senior management.
UIC, Inc. implemented the newly proposed casualty program and corrected coverage inefficiencies, for an overall robust and cost-effective risk management program. Our plan reaped the client an annual premium savings of 42% — that’s over $1,000,000. The new program not only garnered broader coverage, but also lowered their products liability deductible from $500,000 down to $250,000, which was a distinct competitive advantage in the marketplace.
The UIC, Inc. team’s expertise in the manufacturing sector meant our understanding of market conditions and risk appetite gave our client a distinct advantage. Their streamlined casualty program with a lower products liability deductible is an asset that few can compete with.
With UIC, Inc.’s involvement, the following results were realized:
- The company’s casualty program was completely restructured, providing seamless coverage over their diverse product line streams.
- Annual premium savings of 42% was achieved, while simultaneously improving coverage across the board.
- Recognition of the company’s continued need to improve their loss history. UIC, Inc. worked with senior management to institute a consistent structure to the overall risk management program, providing flexibility should they decide to divest themselves of any other operational segments in the future.
UIC, Inc. worked with company’s senior management to educate all personnel on the new casualty program in place.
UIC, Inc. continued to serve the company well past renewal on overall risk advisory, which led to hard and soft savings in future years.
See How UIC, Inc. can help you.
UIC, Inc. is not affiliated with any brokers, nor holds any agreements with insurers. This affords us the objectivity to provide advice for the sole benefit of our clients. Our depth of knowledge and innovative solutions provide our wide variety of clients with comprehensive, cost effective, yet flexible risk management programs for their specific needs. UIC, Inc.’s annual insurance consulting retainers, our only source of income, consistently help clients achieve insurance premium savings averaging 25%-40%, offering significant ROI while at the same time providing appropriate insurance coverage for each company’s specific needs and risk profile. Schedule your complimentary risk management audit with UCI, Inc. now.
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