Analysis Post Acquisition Leads to a More Efficient, Consolidated Program
Case Study
The Request
Consolidate multiple risk financing programs after significant merger activity
Company Profile
Industry: Healthcare
Employees: 70,000+
Locations: 1,400
Annual Revenue: $10B+
A large healthcare organization acquired three major competitors over 36 months. Post-merger, they had four underperforming and distinct risk financing programs for Medical Professional Liability – one offshore captive, one domestic RRG, one Self-Insured Trust, and one sizeable deductible program. Each program utilized separate brokers, actuaries, and captive managers. They needed strategic advice to consolidate these programs and optimize a new program to move them forward efficiently and effectively.
The Solution
Thorough analysis of all costs and programs associated with the combined organization
Brown & Brown uncovered the opportunity to free up over $30 million of trapped capital in their risk financing programs. We analyzed every element, claim, and cost associated with the program and the business from top to bottom. A segregated cell captive was recommended for the combined organization.
The Results
Reduced captive expenses and new strategy to boost limits available to all merged entities
Brown & Brown demonstrated that annual operating captive expenses would be reduced by over $300,000 once the consolidation is completed. We dug in deeper and examined the excess insurance and reinsurance programs, laying out a strategy to boost the limits available to all merged entities while eliminating their clash claim exposure. Even while achieving these significant enhancements, we uncovered unnecessary carrier premium payments of $2.3 million through the implementation of a consolidated program strategy.
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