Evidenced-based Approach and Market Understanding Provides Savings of $2.3M Annually for Pharma Client

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Client:

Fortune-Ranked Pharmaceuticals & Biotech Company

Situation:

Pacific Resources handled client’s Life plan. Another consultant handled their LTD plan. The LTD plan was put to market. Client’s incumbent carrier was awarded the business. The client not satisfied and believed “best and final” proposed rate was inflated.

Client considered moving LTD coverage to their existing captive but did not want to base their decision on possibly inaccurate financials. Asked Pacific Resourcesto review LTD marketing to determine true financials.

Challenge:

Leveraging our Life plan relationship with our client to help them achieve fair pricing for their LTD plan. projections. Determined plan was not priced appropriately. Further discussions held with the client. The client then decided to temporarily abandon captive approach, and work with LTD carrier to achieve appropriate pricing for plan.

Approach:

Reviewed RFP results and LTD plan financials. Used our underwriting expertise to develop our own set of claim picks, expense levels, reserving levels and total incurred claims projections

Determined plan was not priced appropriately. Further discussions held with the client. The client then decided to temporarily abandon captive approach, and work with LTD carrier to achieve appropriate pricing for plan.

Several conference calls later, our underwriters convinced carrier that our claim picks more accurately represented the future state of LTD plan than theirs.

Our deep dive into data revealed several additional months of claim data which added weight to our position.

Outcome:

Carrier offered additional rate relief of 23% to employer-funded portion of the benefit.Savings to client: $2.3 million annually or $9.2 million over the life of the rate guarantee. Savings were above and beyond those realized through earlier RFP process.