liabilities exceeding its assets
2015 net underwriting loss (after $25 million loss in 2014)
net premium written had decreased by $90 million
Taking on a failing, net-negative insurance operation
In 2017, the New York State Department of Financial Services revoked Administrators for the Professions’ (AFP’s) authority to manage PRI due to “repeatedly and consistently” breaking fiduciary and other duties to the companies insureds. Brokers projected that PRI was “going out of business any time.” They couldn’t compete on the basis of their balance sheet and needed to take an aggressive approach to change management across their operations, culture, and long-term goals.
AREAS OF EXPERTISE
- Crisis & Interim Management
- Runoff Strategy & Execution
- Organizational Development
Exceeding the norms of Turnaround & Change Management
The Princeton Partnership set out to realign and rebuild PRI’s business at its core. Rather than cut costs that could limit the future of the firm, the team achieved significant results by reengineering other aspects of the business— finding efficiencies in the underwriting process, introducing performance metrics and technology, and restructuring claims management. This transformed PRI into a disciplined, technologically modern, service-oriented business, which led to significant and rapid improvement of PRI’s balance sheet and market presence.
Driving down PRI’s cost of handling claims and implementing a more disciplined, data-driven approach to managing litigation costs –
Early in the transition, The Princeton Partnership identified an opportunity to become more aggressive in the defense of our insureds. Within the company, PRI fundamentally changed how claims were managed, and this change alone accounts for a large part of the early surplus improvement you see in the financials (a vast majority of the 2017 surplus improvement and roughly half of 2018 improvement).
Leveraging data to empower the team and increase efficiency –
To depress claims-handling costs, the team linked information across departments—underwriting, claims, actuary, finance—to maximize decision-making processes. Data informed outside counsel strategy, revamping defence counsel and identifying which has historically better success in certain jurisdictions and with certain specialties of claims handling.
Shifting to a more selective underwriting approach –
With new insights from data and technology, the team was able to focus on areas with a high chance of success (breakeven or better).
Streamlining the Underwriting Process with technology –
PRI invested in customer-facing (front-end) and behind-the-scenes (back-end) technology and web-based upgrades. The tech streamlined the application process by automatically removing redundant questions, and the new Portal gave insureds greater access to their accounts on the company’s website. With new insights, the team was able to focus on areas with a higher chance of success (breakeven or better) and make better-informed underwriting decisions overall.
In the absence of capital, The Princeton Partnership helped PRI find success through dedication to customer service and a powerful series of creative solutions. PRI never compromised the amount or the timing of any payment nor did it reengineer business operations simply to cut costs. Yet, 2020 was the first year of revenue growth in many years. From an insolvent insurer, PRI’s degree of economic improvement in just three years has been described by many as an extraordinary outcome never seen before in the US market. Significant improvement continues.
Automated many of the business functions
- Launched new website
- Built a new Portal for insureds and brokers
- Introduced an online 24-hour quick quote system
Short-term and long-term results
After just 2 years of turnaround management execution, PRI posted an overall surplus improvement from negative $341 million at July, 1, 2017 to negative $188 million at March 31, 2019, and continues to see financial improvement.
Launched a new admitted insurer owned by PRI
After spending time to address immediate needs, PRI has successfully transitioned to growth mode, acquiring EmPRO.
approx. total financial strengthening
reduced headcount by reengineering all processes, including claims & underwriting
recorded earned premium growth of $3.4 million in 2020
improved surplus from year end 2016 to year end 2020
Experience. Creativity. High ethical standards.
The Princeton Partnership team’s combination of experience, creativity, and high ethical standards has made them one of, if not the best turnaround organization I have worked with. – Past Client