Corporate Governance pays off for Global IT Provider
ERA’s Conceptual Tender process provided 31% savings for a publicly listed Information Technology company
ERA achieves more than 30% annual savings for a global IT company during a Corporate Governance review.
A publicly listed Information Technology company approached Expense Reduction Analysts (ERA) to conduct a corporate governance exercise in order to satisfy the requirements of the Board Audit and Risk Committee.
The review was not intended to be a cost cutting procedure, rather an opportunity to test the market in terms of insurance broker expertise and to ensure policy coverage was sufficient for the organisations ever changing and expanding risk profile.
The Conceptual Tender Solution
It was decided that ERA’s unique Conceptual Tender would be the most appropriate model for the client and the process was conducted, including all major brokers with this sector specialisation.
While the client had stated they were very happy with the incumbent broker, the process unearthed some less than satisfactory findings in relation to the current program, including:
- Hidden commissions and profit sharing
- Over fifty (50) gaps in coverage identified
- Major coverage exclusions in relation to the organisation’s activities
The preferred intermediary was appointed, with transparency and advocacy ensured through a specifically worded Broker Service Agreement which included Key Performance Indicator Bonuses.
While the client may have saved more than thirty percent in annual insurance costs, more important issues were addressed. The policy coverages are now appropriate to the risk profile after a thorough analysis of all policies, risk management procedures and contracts.
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