The Client: A large New Zealand food sector business
The Situation: Rising premium costs despite a history of zero claims and a strong risk management profile
The Approach: A fresh renewal approach and marketing strategy, including presentations to local and London markets with new insurers
The Outcome: A significant capacity surplus, resulting in savings exceeding $1 million
Situation
A large food sector business faced both reduced capacity and significantly increased insurance rates despite having zero claims. The current insurer was either looking to leave the placement or significantly reduce capacity, meaning the client would be left significantly underinsured. Other local insurers had expressed limited interest in the business and would only consider following the already elevated rates.
Solution
Lockton worked with the client to establish a captive, allowing them to access the reinsurance market and gain greater freedom in structuring their programme. Additionally, we redeveloped the marketing strategy. The client had sophisticated documentation and had already made significant efforts in establishing best practice risk management. We adopted this internal knowledge and capability, aligned it with new underwriting information, and jointly with the client presented their story to both local and international markets. Within the span of 4 months, Lockton was able to effectively overcome the insurers’ assumptions, introduce new international markets, including reinsurers, and ultimately deliver significant excess capacity.
Outcome
The result was a significant reduction, in excess of $1 million, against the quoted local programme and was demonstrably better than their industry peers, who are now looking to follow the path we established. Additionally, as the captive grows and matures, the client is well-positioned to enjoy further savings and efficiency gains, especially as the market comes to appreciate the quality of risk they represent.
The contents of this publication are provided for general information only. Lockton arranges the insurance and is not the insurer. While the content contributors have taken reasonable care in compiling the information presented, we do not warrant that the information is correct. It is not intended to be interpreted as advice on which you should rely and may not necessarily be suitable for you. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication.
