Back to Basics: How Good Old Risk Management Tools Enabled This Risk Manager to Save Her Company Money and Bolster Its Brand
Like many food companies, protein snack manufacturer Jack Link’s was facing significant premium increases on its property policies. Older facilities, often in rural locales that were far away from fire departments, weren’t an attractive risk to insurers. Yet many of Jack Link’s manufacturing sites fit this description to a tee.
To make matters worse, Jack Link’s also experienced a total loss to a facility in Nebraska in 2019 due to flooding.
Unsurprisingly, the company faced a very significant rate increase at renewal.
That’s where Kate McGrory, risk management analyst at Jack Link’s, came to the rescue with a detailed plan to work with risk engineers make safety and other mitigation upgrades to the company’s numerous properties. She joined the company in 2019 and worked to secure buy-in from senior leadership for $1.1 million in building upgrades, including things like sprinkler investments, that ultimately reduced rates on their property program by 15% as a whole in 2021.
Certainly a feat worthy of a Risk All Star.
“We kind of fell out of alignment with just the basics of the nuts and bolts upkeep up with our risk engineering and safety programs,” she said. “It was pretty apparent that there was something to be done.”
In order to secure the funds necessary to make these risk engineering improvements, McGrory needed to get senior leadership on board. She notes that it’s “difficult to show ROI on a sprinkler investment.”
“Based on the way our program was set up, I couldn’t give them a number that we would see in savings from just completing one project,” McGrory explained.
So, she presented the company’s leadership with the “cost of doing nothing” — aka how many dollars premium increases and potential losses would cost the company if they didn’t make any improvements to their facilities. Then she presented the costs of minimal improvements and the costs of moderate investments.
Leaders saw that they would save money by investing in good old fashioned risk management tools.
“If we just go and do the low hanging fruit, we’re going to be in the same position we are now and again in five years,” McGrory said.
Now, the firm is planning to invest another $3.2 million in risk engineering improvements across another four facilities. And they’ve built stronger relationships with their insurers. Carriers saw they were willing to invest in their risk management.
“We’ve invested so much in our facilities,” McGrory said. “It was persistence and relationship building that really got us there. “Everyone who has a seat at the table has to understand that the insurance company and the broker can be a partner to us as we continue to build our facilities.”
But for McGrory, these improvements represent something more than just solid risk management. They’re reflective of the company’s culture.
“Jack Link’s is really proud of their brand and proud of the company’s history,” she said. “This is protecting the brand.” &
Every year, Risk & Insurance selects deserving candidates to become Risk All Stars. These are risk managers who, through their perseverance, passion and creativity, make a big difference to the stability of their organizations.