Large uninsured loss leads to urgent review – and 40% savings

The Problem

The client – an ASX Top 100 Company – believed they had extensive insurance arrangements in place.

But following a large underinsured loss, they engaged RAS to conduct an independent insurance review to ensure the best possible match between their insurable risks and available insurance cover.

The Solution

RAS reviewed and documented at a high level the client’s existing insurance processes and procedures, including the link between how risks were identified, quantified and treated, and how the insurance program was procured.

We reviewed all of the client’s insurance related activities, as well as those conducted by outsourced service providers and appropriate service agreements.

We also undertook a thorough review of the client’s financial ability and appetite to retain risk.

We then compared the client’s existing insurance arrangements against benchmarks and industry best practice, and provided recommendations for improvement, including a step-by-step implementation plan.

The Legacy

  • The client changed the mix between internal and outsourced activities.
  • We facilitated an insurance broking tender, which resulted in a change of insurance broker, cost savings of approximately 40% and a better risk and cover match.
  • Contracts have been developed with all outsourced service providers, which include the scope of services, terms of contract, fees and measurable financial key performance indicators (KPIs).
  • We were subsequently engaged to manage the transition to the new insurance broker, and ongoing monitoring of the broker’s performance against the service contract.
  • Risk workshops have also been conducted to identify, quantify and appropriately treat all insurable risks.