Life and AD&D Case Study

This market has been our primary focus for over thirty years and this particular client has been engaged for over 15 years.

This particular example highlights the need for a comprehensive knowledge of the market and the ability to control a protracted engagement.  There are often much broader dynamics in play than will be revealed in the typical consultant styled process.  In this case, they involved:

  • One of the most aggressive group life carriers presented a well- documented renewal to an existing client.  The offer validated an annual premium increase of almost $4,000,000 and a three year guarantee. 
  • The primary carriers we included in the process were MetLife, Prudential, Minnesota Life, Aetna, CIGNA, etc.
  • The employer also requested that a captive option be introduced into the equation.  Due to the extremely competitive fully insured quotes obtained from the carriers, this option was ultimately abandoned.
  • Five months of negotiations produced significant improvements.

Points of interest:

  • Personnel changes at the competition carriers allowed for multiple rate enhancements.  Knowing who these parties were and how they were personally incentivized fueled this process.
  • Ultimately, the incumbent carrier reduced the employer-paid rate increase annually by $2,181,011 and guaranteed for five years.  Years six and seven have provisional guarantees.  Five year savings amounted to $10,905,055.
  • Rate reductions were further enhanced by the introduction of employee-paid Critical Illness and Accident policies after Jan. 1, 2016.  These offerings not only brought employer premium relief but also helped fill an employee need with the interaction of multiple High Deductible medical coverage options.

The primary lesson from this particular case lies in the reaffirmation of just how aggressive the carriers become if the renewal process is challenged. Time and again, employers renew with carriers far less competitive than this carrier and leave too much on the table.  This market has not changed in thirty years.

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