Chad C. Jackson, staff director of risk management for FedEx Corp., dramatically restructured the company's aviation insurance program to address rising premiums by taking on a substantial self-insured retention.

By taking a $10 million self-insured retention on its aviation program in 2012, FedEx was able to save $9 million in annual premiums across the board.

With more than 665 airplanes serving 375 airports worldwide, the size of the Memphis, Tenn.-based company's fleet resembles that of a commercial passenger airliner.

As aviation insurers in 2009 stood ready to increase rates industrywide, and FedEx's growing fleet became more modernized and valuable, Mr. Jackson decided to meet with aviation underwriters and listen to what really mattered to them.

“We were telling them answers to the questions they had — fatigue risk management, threat and air management, human factors, training and safety technologies,” Mr. Jackson said.

He brought in FedEx safety specialists to directly answer underwriters' questions.

He gathered a global perspective to understand underlying exposures and losses as well as how the panel of aviation underwriters perceived FedEx's risks, said Wynne Sharpe, vice president and account executive at Aon Risk Solutions in Houston. The Aon P.L.C. unit handles FedEx's global property and casualty, aviation, and global cargo and logistics liabilities, among others.

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“One of the things Chad did was to really understand how the market looked at their risk and how the market differentiated their risk,” Mr. Sharpe said. “It was really important that FedEx be seen in the market as a company to partner with and as wanting to take the appropriate amount of risk out of the market when they insure their program.”

Together with Aon, FedEx gathered loss information and, based on analytics, restructured its program to help mitigate increasing insurance premiums because FedEx's fleet was growing over time, Mr. Sharpe said.

“Chad has done a fantastic job of presenting a well-structured and integrated risk management and insurance program that underwriters really want to buy into,” said Jeff Bruno, Parsippany, N.J.-based chief underwriting officer at Global Aerospace Underwriting Managers Ltd. London-based Global Aerospace leads FedEx's aviation program.

FedEx's loss-control initiatives, including fatigue risk management, human factor training, new or updated state-of-the-art equipment, “all in my view have really moved the culture of the firm,” Mr. Bruno said. “So much so, that FedEx has been willing to make a substantial bet on themselves by taking an extremely large (self-insured retention) this year and it's paying really big dividends for them right now,” Mr. Bruno said.

While declining to disclose aviation program limits and deductibles, “I will say they're very high,” Mr. Jackson said.

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The standard market deductibles for aviation insurance are $1 million for a wide-body aircraft. “A million dollars per occurrence is your standard retention for a wide-body aircraft — we take that plus a significant retention in excess of it,” Mr. Jackson said.

“Last year, we took a significant aggregate retention above that to be able to show ... that we were committed to handling the risks appropriately and not just transferring that out to somebody else,” he said.

“Insurers now know our story. We're telling them we protect our risks and we show them that we'll take a little extra skin in the game,” Mr. Jackson said.