Dream discount: client gets $13m drop in cost of insurable risk
Our client is a large convenience retailer and fuel supplier with operations across Australia.
After significant changes to the senior executives group and the development of an operational efficiency project, Risk Advisory Services were appointed 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 existing programs’ strengths and weaknesses. We also calculated the Total Cost of Insurable Risk (TCOIR) and provided recommendations for improvement.
The programs had a number of weaknesses:
- Across the insurance function there was a lack of planning, strategy, accountability and performance measurement.
- There was a disconnect between insurance and the way risk was managed. It was seen as an administrative function.
- The client’s insurable risk, and resultant incidents and claims, were not being effectively managed.
- Appointed insurance advisers had not provided an effective service.
We made recommendations aimed at improving the way both the programs and underlying risks were managed.
These recommendations were estimated to reduce the TCOIR of our client by in excess of $13m per annum.
We worked successfully with the client on the 12 projects contained in our implementation plan.
Some were handled using the client’s internal resources, while others were led by Risk Advisory Services or external service providers.
Now that the insurance function is closely linked to the risk management function, the client is benefitting from significant improvements in the design of its insurance program and much better value for money from the insurance industry.
For every dollar invested in this project, the client received more than $30 in return.