Managing challenging risk in a difficult market puts a renewed emphasis on creative pre-loss strategies.
One of the largest beef processors in the United States hired Hays Companies to assist with their property insurance program. The client was a complex risk for insurers due to two unprotected processing facilities each with total insurable property values of more than $1 billion and business interruption exposures equating to more than $1.5 million per day. Hays Companies developed a property insurance program with more than twenty insurance markets in order to obtain sufficient capacity to provide an adequate loss limit.
Given the nature of a layered/shared property program, it was critical to designate a capable independent loss adjusting firm. After a thorough search, Hays found the right fit that boasted a rich background in food processing. Once the firm was engaged, Hays facilitated multiple meetings and an onsite tour with the local plant managers and engineers. The loss adjustment firm gained a unique understanding of the facility operations, local contractors and business objectives.
Six months after adding the loss adjustment team to the program, a microburst significantly damaged the roof of a mission-critical box storage building that held valuable inventory. The loss adjustment team immediately responded so a temporary roof could be put in place and was onsite promptly working together with Hays and the client’s local team.
With a temporary solution in place, the issue of a full roof replacement remained. Roofing contractors estimated that the full roof replacement project would cause 30-45 days of downtime at the facility, leaving the client exposed to a $50 million business interruption loss and risk of losing market share. The loss adjustment team understood the importance of eliminating downtime and worked with Hays to find a roof replacement solution that would not halt production. This solution eliminated additional downtime and mitigated the loss by more than $50 million.
The establishment of the client/loss adjuster partnership resulted in the following positive impact:
- 30+ days of mitigated restoration time
- Reduction of estimated loss expectancy by 90% ($5.5 million vs. $55 million)
- Net loss ratio improvement of 99% (net loss $500 thousand vs. $55 million)
This mitigation success story was critical to Hays’ ability to retain incumbent capacity for the renewal of the client’s property program. If not for this proactive mitigation approach, the client would have faced market share pressure and insurers would have been hit with a huge loss, making the client’s already challenging risk even more difficult to insure.
Experience in Complex Industries
Hays’ success in the food sector is driven by our deep expertise and willingness to leverage partners that drive even greater risk mitigation cost-savings for our clients. By partnering with an industry specialist, such as an independent loss adjuster, our clients benefit from another value-added consulting partner.
These industry specialist partnerships are leveraged to:
- Proactively identify potential shortcomings in disaster planning, loss mitigation, business interruption and supply chain issues.
- Differentiate when negotiating terms and conditions with insurers.
- Establish a connection between expert and client before a loss occurs.
- Seamlessly execute a post-loss strategy that avoids significant downtime, business interruption losses and loss of market share.
Connect with our Hays team to learn about our expertise in your industry, how we build our risk mitigation strategies, and how we can aid your business in creating a cost-saving property insurance program.
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