The Opportunity
A large rigging and hauling company, operating a substantial crane fleet, had worked with the same broker for 60 years. Years earlier, that broker had advised the company to go self-insured for workers' compensation in the state of Kansas — a decision that, over time, had become a significant financial burden.
Under the self-insured structure, the company was retaining the first $500,000 of every workers' comp claim. That high retention had left roughly $1 million in collateral tied up against open claims, and on top of that, the company was still paying approximately $225,000 per year for excess coverage above the retention. The arrangement was expensive, capital-intensive, and increasingly hard to justify.
The Strategy
Recognizing the self-insured structure as the company's core pain point, the focus was on sourcing a fundamentally better workers' comp solution, and moving quickly to bring it to the table:
- Went to market with a preferred workers' comp carrier and brought back a complete alternative solution within about 48 hours.
- Proposed moving the company off self-insurance entirely, from a $500,000 deductible down to a $25,000 deductible.
- Structured the new program to eliminate collateral requirements altogether, freeing up capital that had been tied up for years.
- Priced the new program at roughly 40% less than what the company was currently paying, combining premium and the cost of maintaining collateral.
With the workers' comp program winning the account, the relationship was then used to take a fuller look at the rest of the company's insurance portfolio at renewal.
The Results
The new workers' comp structure delivered exactly the kind of relief the company needed, and the account was won on the strength of that solution alone:
- Reduced the workers' comp deductible from $500,000 to $25,000 per claim.
- Eliminated roughly $1 million in collateral that had been tied up under the self-insured structure.
- Cut workers' comp costs by approximately 40% compared to what the company had been paying.
- Doubled property values across the portfolio to more accurately reflect replacement cost.
- Saved more than 30% on property and inland marine coverage despite the increased values.
A month later, at renewal, the account was reviewed further. Property values across the company's portfolio were doubled to reflect true replacement cost, and property and inland marine coverage was still placed at more than 30% below prior pricing — delivering stronger, more accurate coverage and meaningful savings in the same renewal.
