Issue
A NYC-based ambulance company had unusually high premiums despite minimal claims activity. Leadership suspected they were overpaying and wanted a solution to better reflect
their actual risk performance.
Key challenges included:
- Excessive premium costs. The company was paying $7.2 million annually, despite a low claims history.
- Low loss frequency. Actual claims activity didn’t justify the carrier’s high risk rating.
- Out-of-pocket expenses. Unreported losses were being handled outside the insurance policy.
- Limited flexibility in traditional coverage. Standard plans didn’t allow the company to benefit from their favorable loss profile.
- Need for a custom risk strategy. The company lacked a structured insurance solution tailored to their operations and financial goals.
Solution
We identified two key areas to address the ambulance company’s concerns:
- Data analytics. Using our proprietary analytics, we conducted a five-year review of the company’s actual claims history. This revealed a notable discrepancy between the carrier’s risk estimation and the company’s actual losses.
- Alternative risk financing. By leveraging our extensive carrier network, we designed a structured captive program tailored to the company’s unique needs. This included a combination of a custom captive structure and a profit-sharing arrangement to create a cost-effective and strategic solution.
As a result, the company cut its insurance premiums nearly in half within one year, dropping from $7.2 million to approximately $3.6 million. The savings freed up significant resources for reinvestment into operations and growth.
| Company Information | |
|---|---|
| Industry | Healthcare – Transportation |
| Entity Type | LLC |
| Ownership Structure | Privately-Held |
| Geographic Footprint | Regional |
| Number of Employees | 1,023 |
| Annual Revenue | $65.5 Million |
© Copyright CBIZ, Inc. All rights reserved. Use of the material contained herein without the express written consent of the firms is prohibited by law. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein. Material contained in this publication is informational and promotional in nature and not intended to be specific financial, tax or consulting advice. Readers are advised to seek professional consultation regarding circumstances affecting their organization.
“CBIZ” is the brand name under which CBIZ CPAs P.C. and CBIZ, Inc. and its subsidiaries, including CBIZ Advisors, LLC, provide professional services. CBIZ CPAs P.C. and CBIZ, Inc. (and its subsidiaries) practice as an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable law, regulations, and professional standards. CBIZ CPAs P.C. is a licensed independent CPA firm that provides attest services to its clients. CBIZ, Inc. and its subsidiary entities provide tax, advisory, and consulting services to their clients. CBIZ, Inc. and its subsidiary entities are not licensed CPA firms and, therefore, cannot provide attest services.