A transportation company wanted to manage out of control workers’ compensation costs. Within 3 years, Lockton developed a unique and proven plan. It created a safety culture that the company's leadership and workers bought into, and lowered claims from $750,000 a year to less than $100,000 a year.

One of our new clients thought they had a good deal from their casualty insurer when they had provided them with a “roll-over” renewal that--for the first time in nine years--didn't require the company to post additional collateral. They asked Lockton to look deeper, and we found major savings. Lockton helped this major consumer goods manufacturer free up $12 million in collateral. In addition, negotiations led to the return of $1.2 million in cash and reduced premiums by 20 percent while keeping the same retentions, policy limits and coverage. Said the company treasurer, “Lockton has done more in the past month than our other broker did in the past two years.”

The most compelling opportunity was to develop a unique product liability structure to meet the needs of diverse company’s holdings. Prior to Lockton’s involvement, one division was not able to secure product liability coverage due to their product class and associated catastrophe exposures. Other divisions purchased and managed programs independently. Additionally, the company had divisions headquartered in Europe and Asia, but no control of the insurance placements and no overlying excess program.

To address risk management issues, Lockton identified a creative underwriter, engaged the product liability defense counsel in a marketing effort, and developed credible loss data to support a unique product liability risk financing structure. Lockton not only placed coverage when none had existed, we developed a program structure that mirrored the company’s corporate risk profile along with the unique objectives of each subsidiary. Lockton ultimately created a single global casualty program providing consistent coverage across the enterprise.

Lockton serves several large food processing firms. Processors are facing an extraordinary profit squeeze from rising grain and raw material prices and intense price competition.

A client asked Lockton to review its product recall and contamination insurance program which was handled by another broker. The company’s wanted to maintain price stability.

So Lockton’s global team—with members based in London, Kansas City and Atlanta—conducted an audit of the existing program, held intensive discussions with insurance carriers worldwide and developed a unique approach.

Our client generated big benefits from Lockton's work:

     • Despite the company’s revenue growth, the program was secured with a 14% price reduction (“apples to apples” comparison)

     • Secured an program alternative that removed the potential cost of a multi-million dollar “large loss surcharge” following a recall

     • Identified and developed new market capacity for product recall to reduce reliance on a single carrier

Lockton has served a nationally recognized food company for several years now, and has helped the client through many changes.  In 2003, after the company was sold to a private equity firm, Lockton attacked a massive backlog of workers’ compensation claims, closing more than 200 open claims.  In the process, about $4.5 million was freed up for the client.  The client was sold to another private equity firm a few years later, which saw the company scale back its operations.  Lockton helped them through a staff downsizing, showing the company how to properly handle exit interviews.  This training kept fraudulent workers’ compensation claims to a minimum.  In addition, Lockton’s assistance during the past several years has seen a $530,000 reduction in a letter of credit for the client.  The client’s total cost of risk for 2007-2008 dropped more than $2 million from 2005-2006.

A private equity firm purchased a struggling division (SpinCo) of a conglomerate.  The firm immediately employed a prepackaged bankruptcy strategy to mitigate the debt and contractual obligations of SpinCo. The private equity firm’s broker told them that SpinCo’s new casualty program would require significant premium and $15 million in collateral, prompting the call to Lockton. SpinCo needed a stand-alone property, casualty and executive risk program and coverage in effect prior to entering the pre-packaged bankruptcy. Lockton provided a solution that required zero collateral to be posted and offered a short-term, less expensive guaranteed cost primary casualty program. Lockton’s work allowed the private equity firm to mitigate some of SpinCo’s pre-petition liabilities and help the conglomerate unload a non-core asset that was not performing profitably. 

A large restaurant company needed directors and officers, employee liability and fiduciary coverage during its bankruptcy, but received an unsatisfactory quote for the coverage from its insurer and sought Lockton’s help. Lockton conducted an in-depth program review that led to several solutions. Lockton provided the company with a 40 percent reduction on its six-year D&O, employee liability and fiduciary run-off program, it negotiated a six-week guaranteed cost workers compensation program in just 10 days and it and it reduced the company’s collateral by almost $500,000.

 A Fortune 200 consumer goods company contacted the two largest publicly-held brokers for a required collateral estimate as part of a plan renewal. When the brokers presented estimates of $70 and $65 million increases, the company sought an opinion from Lockton. Unlike the other two brokers, Lockton used the company’s past loss data as the primary diagnostic, and made an initial estimate of a $10 million increase. After being given the broker of record and, thus, being privy to even more of the company’s information and documents, Lockton secured a $5 million collateral increase for the company.

A transportation company earning nearly $900 million annually had a heavily leveraged balance sheet and recognized its inefficient insurance program as an area for improvement. After being asked to intervene, Lockton found areas of collateral redundancy and various premium components that required revision. Lockton met with the company’s insurer to review the analysis and reach a consensus on the collateral reductions, in addition to negotiating a lower premium that retained many of the existing terms and conditions intact. In exactly 30 days Lockton delivered a net reduction in collateral of $20.2 million and a premium savings of $6.3 million.

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.

 A multi-billion dollar retailer insured itself on workers compensation. However, the company paid approximately $17-18 million in claims per year. Lockton advised the company on improving its coverage to decrease its claims costs. Lockton met with the company’s loss control representatives, distributed surveys and added injury counselors. After the first year of the program’s implementation, the company’s incurred costs and number of claims decreased by double-digit percentages.

In late 2008, the results of a Lockton Claims Cost Control review for a national retailer revealed a heightened need to increase employee awareness and understanding of injury counselors while beefing up the workers compensation program. Lockton’s team met with company representatives to address its needs and research methods of improvement. Lockton’s analysis led to increased communication with injury counselors, higher involvement of nurse managers and more effective return to work tactics. The program revisions lowered the company’s general liability losses from $2.1 million to less than $1.1 million and lowered workers compensation incurred losses from $7.8 million to $5.5 million.

A Fortune 500 food distributor faced a spike in auto liability claims after three losses exceeding $5 million during a 10-year period. This caused the carrier to seek an increase in collateral. One actuary estimated a $40-50 million increase in collateral compared to previous estimates. Unsatisfied with the result, the company, with additional Lockton support and input, partnered with an actuary who had a better understanding of their risk profile and saw the opportunity for a decrease in collateral. At the time of renewal, the carrier’s actuary requested an increase of $20 million in collateral, despite Lockton and company actuaries seeing a need for a $3-5 million decrease. Lockton facilitated negotiations among the three parties, which led to the decision of no additional collateral needing to be posted.

 A firm had switched to a large deductible worker’s compensation program, and needed to post millions in collateral.  However, the company was concerned that the collateral requirement was too high.  It wanted options to reduce the collateral and the fixed costs on the program.  So Lockton conducted a thorough credit review with the carrier, audited and reconstructed its loss data, and then researched claims development patterns to revise the loss projections.  After considerable discussion and intense review with the carrier, the client secured a 50 percent reduction in collateral, freeing up $10 million on the company’s line of credit for other business uses.And in total, the Lockton team helped the firm save $350,000 in cash on its worker’s compensation program.

Lockton helped a major consumer products manufacturer and marketer properly re-set its claims reserves when the company thought it was over-reserving its excess casualty program. The existing broker served simultaneously as a consulting actuary, and the company faced a balance sheet with a large liability. Lockton’s Risk Management Analytics Team’s reserve reviews confirmed millions in surplus reserves. Following an audit and negotiations, the client released $8 million in reserve surplus to the bottom line.

A large medical group needed administrative efficiency, reduced costs, and broader property and casualty coverage for its 19 locations. Even with several changes to senior management, Lockton’s persistence saved the client more than 15% on its premium and consolidated a confusing array of renewal dates and carriers.

A provider of rehabilitation program management services to long-term care facilities allowed Lockton to step in and take a look at their worker’s compensation program and a new Texas-based acquisition. The client needed a broker to analyze data to reduce the variable and fixed claims costs. Lockton brought up several new ideas regarding the structure of the Texas acquisition and how to avoid slip-and-fall claims. To date, the changes have resulted in a 25% reduction on fixed costs for claims, and variable costs are trending downward.

An international manufacturer responsible for medical device components and more needed to revise its insurance program. Lockton reviewed the general liability, property and international insurance programs, identifying significant gaps in coverage.  The client implemented Lockton’s recommendation for a Master Controlled Program and also adjusted its  property insurance program, substantially expanding coverage. Equipped with additional protection, the client still saved money, renewing at 5% less than their expiring premium.

The trucking industry faces a complicated risk profile, especially in a slow economy. Companies struggle to efficiently utilize borrowing capacity and worker’s compensation claims tend to increase as drivers drive fewer miles. Lockton recommended that a trucking client review its insurance program, and found that the incumbent carrier held $5 million more in collateral than necessary. After a switch to a new carrier, Lockton negotiated a collateral return of more than $2 million from the previous carrier and reduced the premium by 11.4%.

To help a leading bedding manufacturer confront its high total cost of risk, Lockton conducted a thorough review of its property, D&O, and casualty programs. Lockton listened carefully, made alterations to all three lines, leading the client to change the client’s primary carriers. The work paid off through large decreases in all three categories of premiums. Property premiums saw a 40% decrease, while D&O and casualty decreased by 35% and 30%, respectively.

The recently hired Corporate Insurance Manager wanted to determine Workers’ Compensation best practices and enhancements opportunities for an entire national healthcare system. Lockton Claims Cost Control Consultants conducted site surveys at each hospital with recommendations for each location and a system-wide business plan.

Each of the hospital’s Workers’ Compensation Coordinators attended Lockton’s Injury Management training seminar. A customized software program was installed at each hospital to help them take a systematic approach to post-injury management and produce meaningful reports.

The result was a $2.1 million reduction in ultimate projected Workers’ Compensation loss costs over an 18-month period. In addition, $3.9 million in credits were offered to affiliate hospitals over a three-year period after implanting the Claims Cost Control program.

A credit union in Ohio worked with the same carrier for 50 years, since its founding in 1962. Lockton stepped in to help guide them through the entire insurance and risk management process including a full coverage audit, benchmarking and final plan selection. With Lockton’s help, the client fully examined all of their options and made the best decision for the company.Lockton developed a new program that reduced their cost by 20 percent and fixed more than 30 coverage gaps.

Soon after opening a landmark building in a major city, it was discovered that a simple architectural feature was causing a problem. Patrons approaching the impressive structure stumbled on the small steps leading up to the front doors. Working with the architect, the city and Lockton Loss Control, several solutions were discussed and investigated. Eventually, it was decided to proceed with a ramp project and the stairs were closed using barricades and signs. Lockton Loss Control also provided input on the placement of handrails to help direct people toward the front doors. Today, patrons are still enthralled by the impressive architecture, while not having to contend with the steps.