Success Stories

• Restructuring and Reducing Cost

  One Lockton client was enjoying an increase in revenue, but was not happy with the accompanying increase in workers’ compensation costs. Due to the nature of employee contracts, this healthcare staffing company had a limited amount of time to return workers to full duty and manage their worker’s compensation claims effectively. Lockton’s Claims Cost Control unit stepped in and helped the client hire an injury counselor. Lockton also restructured and centralized the post injury management process, and also installed their claims management software tool to help the client manage claims more effectively. Claims Cost Control then worked with the client to develop strategies that would shorten the length of lost time days. In the end, the client saw great results across the aboard. Compared against the previous year, the client saw a 28 percent reduction in total incurred workers’ compensation costs and a 19 percent decrease in the average cost per claim.

• Award Winning Injury Management

  With Workers’ Compensation costs increasing, a large healthcare staffing client looked to Lockton to help them reverse the trend. Lockton Claims Cost Control identified the potential for this client to turn things around by implementing the Claims Cost Control post injury management model. With some help from Lockton, the client hired an injury counselor and restructured their post injury management process. A major part of the process was the use of Claims Cost Control’s software tool, called Workers’ Compensation Claims Management System. With a more streamlined approach in place, the client won an award for best in class risk management practices. They also saw a 19 percent reduction in average cost per claim, as well as a 52 percent reduction in lost time days.

• Last-minute meeting decreases carrier's collateral requirements

  A major U.S. publicly-traded staffing company called Lockton 45 days before its January 1 renewal. The company had just been informed by its current broker that collateral requirements would be increased significantly due to a delay in its SEC filings. Discussions with senior management led to the company choosing Lockton as their broker 29 days prior to the renewal date.
  
  On the first day as the company’s broker, the Lockton team met with the scheduled a meeting between the underwriting manager and senior credit manager of the carrier and the senior management of the company. The call resulted in a significant rate decrease and the easement of a potentially leveraged position.

• Deductible lowered with no additional premium

  A major division of a publicly-traded conglomerate had significant financial leverage and below-investment-grade credit ratings. The company was told by their previous broker that there were no remedies for the collateral requirement being imposed by the primary carrier.
  
  The Lockton team reviewed the new client’s loss experience and found factors that impacted the company’s credit, but were not indicative of the risk profile. Lockton was able to lower the deductible with no additional premium, establish a line of communication between the company’s CFO and the carrier’s credit officer, and model the cost/benefit of various collateral structures. All of these solutions resulted in improved credit and a dramatically lower collateral requirement.

• Surcharge reduced through meeting with carrier

  A publicly-traded company filed Chapter 11 bankruptcy a few months prior to their casualty insurance renewal. Due to the filing, all carriers were requiring a surcharge on the collateral. Lockton scheduled a meeting with the client’s CFO, the reorganization firm and the chief credit manager from the carrier.
  
  The Lockton team was able to show the positive underlying financial strength of the company, which reduced the surcharge. The Lockton team was also able to secure a credit default indemnification contract, a solution which further assisted the insured during its liquidity crunch.

• Reserve reductions obtained for 50% of files

  A national staffing company became concerned with the level of outstanding reserves on their workers compensation program. They have a cost sensitive program, and the reserves have a direct impact on their bottom line. As a result, they requested an interim, emergency review of their claims. The total incurred losses for this client were nearly $800,000, with many of the claims being relatively old, and the reserves developed.
  
  Lockton arranged a telephonic claim review with representatives from the carrier and client present. This was done with only a few days notice, and with little time to examine a tremendous amount of information. A total of 46 files were selected for examination, and status reports prepared. A reserve analysis was done as a part of this process.
  
  Out of 46 claim files reviewed, reserve reductions were obtained on 23 files, for a total of $85,148. This represented ten percent of the overall total incurred. In thorough analysis of the files and meeting our obligation to obtain not only lower, but appropriate reserves commensurate with the exposure, three files did require reserve increases in the amount of $44,805. This diminished our total reductions to six percent, but still represented a significant reduction for the insured, and a more accurate reflection of their total losses.

• A Ticking Clock and a Tough Renewal

  As it approached its renewal, a staffing company anticipated “bad news” from its state fund and contacted Lockton to search for an alternative insurer. With only three weeks until the renewal, Lockton rushed to learn the company’s operations by gathering and analyzing its underwriting data and meeting with the Risk Manager. After finding a carrier, negotiations hit a standstill. This prompted Lockton to tap into its global connections to provide reassurance to the insurer by reinforcing Lockton’s desire to satisfy the best interests of all parties. This expedited the negotiations and helped the client reach a deal that provided a more financially sound insurance program and more flexibility.

• Cutting Costs with Surgical Precision

  One of the largest providers of healthcare staffing in the U.S. needed to restructure its medical malpractice coverage while reducing collateral and fees. Lockton created a favorable collateral review by changing the client's program structure. The new policy featured a lower limit that reduced the carrier's credit exposure while still satisfying the client's customers. The client realized a 54 percent reduction in fronting fees and a $23.4 million collateral return.

• Preventing $15 Million Tax Liability

  One of the largest staffing companies received little advance notice before renewal of their incumbent carrier’s unwillingness to continue providing coverage under the expiring workers compensation structure. The new workers compensation structure would have caused a change in accounting treatment, resulting in dramatically decreased expenses for the client which brought about an increased tax liability. The company thought that they had no option but to live with the additional $15 million tax liability, despite no change in risk profile. In 30 days, Lockton developed a solution that successfully avoided the $15 million tax liability for the client.

• Reducing Excess Expenses

  A large facility services provider had a low 72 percent loss ratio on their benefits plan and an unnecessary premium increase of 13 percent for their health benefits. Lockton reworked the administration system to save an annual excess cost of $1.1 million and decreased claims cost by $700,000. The new plan decreased the client’s premium by 23.8 percent.