A steel manufacturer with multiple sites continued to pay premiums on a plant that was being demolished therefore significantly overvalued on its policy schedule.
The oversight remained unnoticed until the company’s risk manager left on personal leave.
The Risk International team was brought in to oversee the renewal process while the in-house risk manager was on leave. Rather than simply rely on the information contained on the books, the external team completed a rigorous due diligence process to confirm that stated property values were accurate for underwriting purposes. When numerous inquiries to one of the plants went unanswered, a member of the Risk International team made a personal visit to the site that was still valued on the books at more than a billion dollars annually. To his surprise, the team member discovered that the plant had been shuttered years before and was merely being used to provide raw material for another plant’s blast furnace. The plant was quickly reassessed to reflect its replacement value, which was almost nothing.
As a result of the dismantled plant being properly re-valued, the company saved nearly $1 million in annual premiums. In addition, the company’s policies and vendors were updated to accurately reflect its current operations so that more competitive bids from additional carriers could be garnered.