Case Studies

Risk Management and Commercial Insurance
  • Case Study 1
    Issue

    Our client needed to change third party administrators to administer its workers’ compensation run off and legacy claims.

    Solution

    We identified potential TPAs interested in the business, assisted with selection, pricing and transfer of claims.

    Results

    Through the selection process, we negotiated a fee that resulted in a 30 percent savings, established service standards, and assisted with the transfer of losses. In addition, we worked with the former TPA prior to the transfer of open claims to identify the priority of claim activities and reduce the total claim count by approximately 30.

  • Case Study 2
    Issue

    Our manufacturing client’s workers’ compensation premium cost was steadily increasing from 2.23% of payroll to 5.43% of payroll.

    Solution

    We helped the client identify several drivers that were contributing to the cost increase. Based on that information, we developed a plan that included education and training, targeted claim prevention efforts in high frequency areas, and established procedures for accident investigations, pre-employment screenings and alternatives to traditional insurance.

    Results

    Workers’ compensation costs dropped from 5.43% to 2.27% of payroll in four years. The client then moved to a group captive and started capturing underwriting profit and investment income. The client’s costs continue to drop and are now at 1.07% of payroll.

  • Case Study 3
    Issue

    Client wanted a review of their current commercial insurance program. It was split between two agencies; a national agency for the executive risk coverage and a local agency for the property and casualty coverage.

    Solution

    Upon reviewing the coverage, we found several areas of concern, including a major shortcoming on the standard business interruption coverage form. The client was a R&D company, and didn’t sell actual products. They obtained corporate grants to support their work.

    Results

    By working with the underwriter, we were able to add an endorsement to the business interruption form (at no cost to the client). This endorsement better addressed the grants as the revenue source rather than sales. Now, the firm actually has insurance for business interruptions caused by a property loss.

  • Case Study 4
    Issue

    Our client had assigned an employee to maintain the OSHA logs and post the Annual Summary. This employee had no prior training on OSHA and the logs had not been updated for some time.

    Solution

    We set up a training program for the employee on our online solution, Secure Client. This portal provides OSHA training, record keeping, log summaries, forms, reports, and more.

    Results

    We guided the employee through the training. Together, we worked through the different Secure Client features to load the information needed (including 9 years of workers’ compensation loss runs) in order to be in compliance. The client was able to post the OSHA summary on time and remain compliant with the record-keeping requirements.

  • Case Study 5
    Issue

    A client with a $500,000 per claim, $1.86 million aggregate workers’ compensation self-retention program needed assistance with costs spiraling out of control.

    Solution

    We assessed the company’s program and losses, and developed and implemented a comprehensive program to resolve open pending claims, prevent injuries and minimize future claim costs.

    Results

    In addition to reducing losses, direct claim costs and the experience modification ratings, we saved the client over $210,000 of direct claim costs by uncovering reinsurance. We also anticipate a reduction in the letter of credit by $100,000 based on improved loss experience.

  • Case Study 6
    Issue

    After a large fire at their facility, the carrier sent a non-renewal notice to the client. The client was puzzled about the notice because the fire claim process went smoothly with little issues.

    Solution

    AFG | A-M immediately stepped in to help mitigate the situation. After reviewing the claims history, we discovered that no other claims were filed by this client. Although the fire did occur, the client took the initiative to become a better risk because of it. They installed centrally monitored fire alarms, added fire extinguishers, and implemented new procedures.

    Results

    Armed with this information, we teamed together with several carrier partners and worked out multiple renewal terms. In the end, the decision stood. But, we explained the underwriting decision to other carriers and were able to obtain equivalent coverage for the client.

Employee Benefits
  • Case Study 1
    Issue

    A large independent manufacturer was facing an aging population and health care claims expanding at a rate of 12.5% compounding year-over-year.

    Solution

    AFG | A-M reviewed the current benefit offerings, and, in agreement with the client, decided to manufacture a Healthy Workforce by focusing on healthcare data analytics; changing its medical plan to a High Deductible Health Plan (HDHP); establishing an onsite clinic to manage primary care, preventive care, chronic care and acute care for employees and their families; introducing biometrics and preventive services; hiring an onsite wellness coach; developing direct contracts for preventive cancer screenings, primary care, physical therapy and Rx dispensing; and setting up a disease management program and onsite physical therapy.

    Results

    The client avoided an estimated $12 million in healthcare waste and spend over a six year period when compared to the 12.5% average YOY trend for the population. They estimated 17,000+ production hours were saved by the use of the clinic, which translated in productivity savings of $2,000,000 (according to the 2007 Economic U.S. Census figures). The onsite clinic has recorded over 11,000 visits with 70% of these visits treating chronic care conditions and averaging $100 per visit (compared to industry average of $200 per visit). And, most importantly, the client identified numerous individuals with previously undiagnosed and non-symptomatic cancers and heart disease, helping them avoid future catastrophic health events.

  • Case Study 2
    Issue

    The client, an international manufacturer with 500 employees, had a relatively rich health plan, onsite clinic access, a robust wellness program and offered a healthcare premium discount to employees who participated in a health assessment. However, the company understood it needed to dig more deeply into their data to help them define a new direction.

    Solution

    AFG | A-M reviewed the benefit offerings and integrated medical and prescription data, along with onsite clinic usage, biometrics and health assessment results, to design an overall population health management strategy.  This strategy focused on identifying of previously undiagnosed and non-symptomatic conditions with employees, increasing onsite clinic utilization by employees and dependents, managing preventive care gaps, and treating specific conditions (i.e., low back, neck, allergy).

    Results

    This strategy helped the company both flatline health care costs and book record profits. When the company repurposed their health initiatives, its claim costs were $280.52 per member per month (PMPM). Based on health care cost trend in the Minnesota market (the rate of inflation for health care spending), it was projected that their costs would have risen from $280.52 to $387.20 per member per month. However, the company’s costs have remained consistent, resulting in a total cost avoidance of $4,680,000. The average voluntary turnover rate decreased to less than two percent(compared to industry average of 11%).