Our client is an Australia-New Zealand-based furniture manufacturer. Their premium insurance expense was not large—approximately $400,000 in total—with no apparent service issues.
The Expense Reduction Analysts’ review process was not intended to be a cost-cutting exercise, instead, the client simply preferred to utilise outside expertise to review its insurance broking services.
It became apparent that their contract had been placed with the insurer paying the highest commissions and not an insurer with the most appropriate coverage for their needs.
This was a major issue for our client, a global distributor, as it affected their marine transit insurance. Marine insurance is one of the most critical policies for an import-export based organisation.
Our benchmarking analysis did show that savings were achievable, and the results were staggering.
We delivered a surprising level of savings following our unique tender process for the provision of insurance broking and risk management services for the global furniture manufacturer.
We found savings of $176,000 for our client, around 44% of their total category spend. As well as nearly halving their insurance costs, we improved coverage of their insurance premiums and were able to implement enhanced risk management processes to sustain the savings.
The key to this process was achieving complete broker advocacy and providing incentives for the client’s preferred broker to work for them, and not against them.
Our client achieved a savings of $176,000 on their insurance costs, which was 44% of their annual spend.