Negotiating Renewal Rates
Client: 1206 Employees, Auto Insurance Carrier
Situation: The incumbent medical carrier proposed a 10% rate increase at renewal. Paradigm Group’s underwriting team reviewed the client’s claims and determined that the data indicated that no rate increase was warranted.
Solution: The underwriting and account management teams worked with multiple insurance carriers to obtain competitive quotes for comparable benefits. By using this marketplace data and challenging the carriers’ underwriting methodology, the team successfully negotiated a lower renewal rate with a new carrier.
Outcome: Paradigm Group’s negotiation with the incumbent carrier lowered the renewal rate to a 5% decrease from current rates. However, the market analysis revealed an even better solution: identical medical benefits and an additional premium decrease if the client moved both its medical and ancillary benefits to a third carrier. This proposal included an 11% medical premium decrease and a 14% decrease in life and disability insurance premiums. By accepting the proposal, the company enjoyed a $500,000 savings.