Commercial Risk Broker Fee Reduction

Employer Profile:
7,000 Employee Carve-Out

Opportunity:
A top US broker hired to do the due diligence on a carve-out transaction was set to earn "standard commissions" on the placement for the post-close insurance program. Redgate calculated the commissions at $2.6 million.

Effort:
At the PE firm's request, Redgate worked to negotiate those fees to a reasonable level, respectful of the extensive diligence effort.

Results:
- Broker fees reduced to a flat fee of $1.45 million for year one.
- Set expectations for further (year two) negotiation with new portco leadership team.
- Redgate secured a quote from another broker at $750,000/yr to handle the brokerage. PE firm decided to forgo larger savings opportunity.

$1,150,000 Annual Savings Achieved

Savings were secured without changing brokers.