Sarah E. Pacini, vice president of risk management and insurance with Advocate Health Care in Oak Brook, Ill., says now is actually a good time to buy coverage.

Indeed, Pacini characterizes her most recent renewal experience as a very “pleasant surprise.”

One key reason why the company is seeing rate reductions this year is its substantial self-insured retention.

“We have had a sizable retention since 2002,” Pacini explains. “We actually lowered our retention slightly in 2009—but only because our loss history had been favorable and insurers were willing to attach at a lower point. It was financially reasonable to do that.”

In addition to the use of substantial self-insured retention, another insurance-buying strategy that works well for Pacini and Advocate Health Care is starting the renewal process early.

While the details are still being finalized, she says the plan is to have the company’s renewals completed before Thanksgiving.

“We used to start in September. We moved it up to August, and now we’re starting the application process in July,” she says. “We feel that having the flexibility with time is really important.”

Pacini also stresses the value of long-term business associations, which are critical to “those reductions in premium that every consumer of insurance wants to see this time of year,” she explains. “We have found that as the companies grow more comfortable with the risk manager, as well as the risk-management program, we see better results.”

That has been the case this year, she says: “We’ve had some larger claims that have settled, and we’ve held true to our word when it comes to our claims-management philosophy: quick settlement and settling within our self-insured retention, rather than consistently looking to our excess partners to provide payment.”

The excess-insurance coverage, she notes, is only used as a last resort: “I think that message came through quite clear this year in our underwriting meetings. That has garnered respect with our underwriters.”

Pacini notes that a solid relationship with her company’s broker has also helped with renewals. “We’ve had strong results with our broker for our professional-liability and general-liability placement,” she says. “They are key partners in the entire process, from the application through to the binding—and we’ve enjoyed a very favorable long-term relationship.

“Our insurance partners are open to the policy enhancements that we are requesting this year, so we feel it has been a very collaborative environment at this juncture.”

Special Reports /

Case Study: Health Care RM Counts on Long-Term Relationships, Self-Insurance to Create Favorable Renewal Clime

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