Case Study :: Alternative Insurance Coverage and Management

Challenge:

A recently formed joint venture in the healthcare provider business wished to expand their autonomy from a dominant health provider. To do so, they needed to retain more financial risk while not exposing themselves to catastrophic loss.

What We Did:

• Evaluated the joint venture agreements to determine the relative risks of the joint venture and its partners.
• Evaluated the joint venture's financial statements to determine the level of risk retention the venture could manage.
• Searched the insurance marketplace to determine what stop loss coverage was available.
• Reviewed the previous stop loss coverage forms to determine which insurance partners best fit our client's needs.
• Solicited premium quotes within a small range of retention and limits levels.

Our Recommendations:

• The joint venture should increase their annual per-member retention by 25%, but stay with the same reinsurance carrier.

Results:

• The client reduced their per-unit costs by 35%, allowing them to increase membership within a lower overall cost structure.