BY STEVE BENTLEY | Senior Benefits Advisor
The insurance industry relies heavily on the power of relationships – they establish trust, build loyalty and bring advisors, brokers, companies and solutions together effectively. When it comes to insurance recommendations, it’s vitally important for companies to build relationships with the right brokers, advisors and firms – ones that take the time to understand their every aspect of their operations. Not doing so often leads to generalizations and discrepancies that cause companies to purchase too much or too little coverage for their needs, which can amount to serious financial implications that can hinder their success.
In 2014, a conglomerate company overseeing multiple operations within the agricultural industry, which I will refer to as U-Corp, faced this exact dilemma. The company’s former broker had presented them with a 2-year renewal plan that would have amounted to additional costs of $2.9 million for the first year and up to a 19% increase for the second year. With such a substantial spending increase at stake, U-Corp declined to proceed with their broker’s recommendation until exploring other outside options. Through an internal referral from the company’s new HR director, Conner Insurance was contacted to analyze the company’s operations and identify some of these options. It’s important to note that the average timeframe needed to thoroughly analyze data for a company of this size and scope typically takes one to one-and-a-half years, but given the situation, time was a luxury we didn’t have. The deadline for renewal was approaching quickly, and we were faced with the additional challenge of finding and implementing a solution within a six-month timeframe.
Taking U-Corp’s unique structure and industry diversity into consideration, we quickly identified that the company’s previous broker did not fully understand the operations and needs of each company. This one-size-fits-all mentality was causing massive overspending that, if gone unchecked, would have cost millions of dollars each year for coverage the company didn’t need. Making the best use of limited time, our team was able to audit the operations and processes of each subsidiary company to understand the hierarchy of ownership, their culture, and multiple areas where reorganization could save money. In just five months, we were able to move U-Corp to a new carrier, stop-loss solution and plan design, as well as reorganize the company to accommodate and implement this new plan, all with minimal disruption. By switching the company to a unique self-funded captive insurance plan, U-Corp was now able to buy insurance at a much greater volume than previously, which decreased premiums while increasing their coverage.
Instead of spending the additional $2.9 million they were originally faced within their first year, U-Corp’s new plan design resulted in a savings of $3.2 million. Their second year yielded a $700,000 dividend, which indicated once again that the plan had been successful. This success, paired with the strong relationship formed between Conner and U-Corp, has led to three consecutive annual renewals. Praise of this success came from more than just U-Corp, however. U-Corp’s new stop-loss provider, a company representing one of the largest stop-loss providers in the country, stated that this was the fastest they had ever seen someone develop a relationship, propose a unique captive solution and implement as smoothly and seamlessly as we had.
The success of U-Corp’s new plan serves as a prime example of why building the right relationships makes all of the difference with insurance recommendations. U-Corp’s previous broker treated the company as one solitary operation, instead of what it really was – a group of smaller, unique operations, each with their own specific insurance needs. Because of this, U-Corp faced massive overspending that would have diverted necessary funds away from important functions within the company. By partnering with Conner, U-Corp gained a team of advisors who took the time to learn each of their operations from the ground up in order to create a customized solution for their business. With our help, U-Corp was able to switch to a smarter insurance plan that understood their business and accommodated their specific needs, allowing them to protect their business, their employees and their future.