Goal
An agriculture company was unclear how their carrier was calculating its collateral requirements and wanted options for reducing it.
Action Plan
The MMA analytics and insights team examined the agriculture company’s portfolio and collateral requirements. It determined that based on their current open losses, they were slightly under-collateralized, which is a good position. MMA team then provided a detailed explanation on the findings:
Four open claims that accounted for 82% of the current open reserves were identified. The MMA analytics and insights team recommended engaging a claims advocate to target the open claims, which if closed, could result in at least a 10% overall reduction and bring outstanding liabilities down by $79K.
Achievements
The agriculture company was able to address the claims
that were most impacting their renewal and have a better understanding of how calculations affect collateral requirements in the future.
"Our goal at Connelly Electric is to make sure every day is a safe and injury free day and that every employee comes home from work and has the confidence that Connelly Electric has done everything possible to ensure their safety and wellbeing."
- Kevin Connelly, President at Connelly Electric
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How Making Informed Decisions Helped an Agriculture Company Reduce Liabilities
Financial Analytics Case Study
1
Educated the leaders on how collateral requirements are calculated.
Defined what it means to be under-collateralized and its advantages.
Provided a breakdown on each claim and its impact on collateral requirements.
Small, old open claims were causing a significant amount of added collateral. One open claim with $3K of reserves from 2015 accounted for $127K in outstanding liabilities. A 2016 claim with $5K in reserves was holding the year open and accounted for $173K in outstanding liabilities.
2
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Created a plan to target individual claims that most impact overall reserves.
