Case Studies Case Study: In-House Insurance Management January 1, 2019 How we gained a client’s trust, eased their workload, and saved them millions. Situation Our client is a major provider of integrated facility management services to the public and industry in Australia and New Zealand, and employs more than 35,000 staff. After a significant ownership and management change, the company appointed Risk Advisory Services to undertake an Insurance Opportunity Assessment. Process and findings We conducted an extensive strategic review of the client’s existing general insurance and workers compensation programs. We compiled a diagnostic report outlining the programs’ strengths and weaknesses, calculated the Total Cost of Insurable Risk (TCOIR) and recommended a series of improvements. The program weaknesses can be summarised as: There was a lack of planning, strategy, accountability and performance measurement across the insurance function. Insurance was disconnected from the business units and seen as an administrative function. There was ineffective management of insurable risk, and resultant incidents and claims. The existing Insurance advisors were not providing an effective service. Many of these weaknesses stemmed from a series of restructures and cost-cutting measures that had left the insurance function under severe stress. We made recommendations to improve the management of the program and underlying risks. And they estimated a reduction in our client’s TCOIR of more than A$7m over two years. Client outcome Following the review, the client asked Risk Advisory Services to undertake a number of discrete projects we had identified in the initial report. After successful completion, we submitted a proposal to provide an outsourced insurance and risk management function to manage the company’s day-to-day insurance needs, with access to strategic risk support when required. The client initially voiced concerns about losing control over the program and our ability to service their needs. But we assured the client we would not only meet their needs, but set KPIs and service targets. Upon acceptance of our proposal, we set about developing a seamless partnership with the client and its operating divisions. The outsourced model now provides our client with a full time resource on site and access to the wider Risk Advisory Services team whenever and wherever needed. To date we have: Revised the client’s insurance management policies and standard operating procedures. Reviewed the structure of the insurance program and oversaw a full remarketing of the insurance program, yielding savings of 23% in the first year. Saved the client a further $2-3 million by entering them into the NSW Retro Paid Loss workers compensation program. Run a broking tender and selected a new broker aligned to the our service model, yielding further savings. Developed a Public Liability Insurance Management Strategy and range of projects designed to reduce risk and improve returns. Taken over the running of a previously outsourced under-deductible claims management function. Risk Advisory Services is now working with the client to further improve its risk management practices and reduce insurable risk. We are planning a series of new projects, including running a legal panel tender and staff education program. The outsourced risk and insurance partnership has yielded significant savings for our client and improved business support. The client also now has confidence that its insurance program is being managed effectively, and has added significant value to the bottom line.