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Case Study

A reduction of Group Disability and Life annual premiums by over 25% (more than $1.0M) in less than 90 days.

We were engaged by a large Midwest based manufacturing firm to conduct a comprehensive review of their group life and disability programs to determine the appropriateness of plan design, pricing, and funding structures.  Please find a brief summary of this project:

• Client A engaged our firm to conduct a review of their Group Life & Disability programs in the month of June.  Based on the difficult economic environment, our client contact was directed by senior management to evaluate all cost savings opportunities within their benefit programs and their existing consultant had not reviewed their life & disability programs; 
• In early July, we received a Consultant of Record Letter from the client on their existing disability and life programs and received all plan documents and experience information from the existing carriers;
• We analyzed the experience and the plans and determined that the client would be best served by having the coverage marketed;
• We received approval from the client to send out a Request for Proposal. We prepared the RFP and sent it to the market;
• The results of the RFP were four viable carriers that could be considered as alternatives to the incumbent provider.  The incumbent was also asked to remain in the process.
• As part of our review, we also identified an alternate funding approach for the client as well as numerous plan design ideas;
• The results achieved were 48% savings on the life insurance and 30% savings on the disability. Along with the savings generated from the alternate funding, the client saved $1,073,000 per year and rates were extended for three years. Voluntary employee paid rates stayed the same with no disruption to the upcoming annual enrollment process;
• The results were presented to the client in mid-August with a decision to move forward with our recommendations effective October 1.

In summary, we were able to reduce our client’s group disability and life annual premiums by over 25% (more than $1.0M) in less than 90 days time, while requiring less than 30 hours of our client’s time.