CASE STUDY

Cell Tower Components Manufacturer Doubles in Size, Improves Coverage While Reigning in Premiums

Services Provided
Risk Management

Industry
Technology Components Manufacturer

The Challenge

A multi-billion-dollar manufacturer of cell tower components had only eight months to integrate its latest acquisition. 

As a result of the acquisition, the company nearly doubled its size, which created concerns that significant insurance premium increases were likely in the near future.  In preparation, the acquired company had received a significant allocation for its insurance program.

The Solution

The Risk International risk management team was called in to run due diligence on the acquisition to help integrate the new company as quickly and as cost effectively as possible. With an upcoming insurance renewal, the team immediately used the pending acquisition to remarket the insurance program, seeking cost savings from an integrated insurance program reflecting the increased size of the company post-acquisition. The company was able to enjoy the more competitive insurance rates typically offered to a larger company for part of a renewal cycle, even though the company had not yet been acquired. Once the acquired entity was rolled into the program, Risk International helped seek returned premium as the entity’s insurances were canceled. Because the acquired entity was a small part of its former parent company, less attention was paid to collecting the most accurate values. Risk International then applied its proven data collection process to the new business, which resulted in a reset of values and lower overall exposure basis. 

Risk International applied its proven data collection process to the new business, which resulted in a reset of values and lower overall exposure basis. 

The Results

With the more sizable business on the line, the affected brokers sharpened their pencils to provide an immediate 20-30% cost reduction in the first year. This boosted the company’s bottom line by roughly $800,000 in the first year alone. By the end of the second year, the fully integrated company was nearly twice its original size but only paying 10% more in premiums for higher limits. As a result, the original insurance allocation was reduced by half.