Corporate Strategy: Employee Benefits
Nearly every business has some form of employee benefits -and many are quite expensive.
When it comes to employee benefits, any money you can save will help your corporation make better financial decisions. More savings means more cash available for making the best decisions with your company and living the life you desire.
For employee benefits, there is a simple savings secret that many business owners miss -the TLR.
Unlock The Power Of Target-Loss Ratio (TLR)
As a business owner, you may have heard of “TLR'' when you meet with your broker -but you may not have given it another thought.
Unfortunately, skipping right past your TLR conversation can actually cost you quite a bit of potential savings!
Here’s the secret to the TLR:
Imagine you give your insurance company $10 for coverage at a 70% TLR. This means that when it comes to coverage payouts, the insurance company wants to pay you back $7 out of the $10. This allows them to keep the other $3 to pay their own operating costs and expenses.
Boost that TLR to 80%, and now you can make back $8 rather than $7.
DTR About Your TLR
As a business, you want a higher TLR. Why? Should you end up going over your target-loss ratio (such as a year when you have many claims) the insurance company has to pay out more.
You may be pleased with the high amount of coverage, but your insurance company sure isn’t.
When your renewal comes around, the insurance company will remember that they ended up paying out more than they wanted. They will then hit you with an increase to make up what they’ve lost and try to push your TLR lower.
Consider working with your broker to determine the relationship of your employee benefits TLR.If you can take the steps to keep your costs down on your benefits through a strategic TLR rate, you can live more of your life now.
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