7 Things Brokers Wish Employers Knew

Your insurance broker is in business, just like you are in business. The first rule of any business is to make a profit. Therefore, while insurance brokers have the employers best interest at heart in most situations, there are times brokers wish employers knew more about their workers compensation program, but in the effort to protect their own business interest, they “bite their tongues” and “keep their mouths shut.”

 

 

In fairness to insurance brokers, they mention most of the following areas in their sales presentations, but when employers ignore their advice, they move on to the next subject in the interest of their own business. Here are seven areas your broker wishes every employer knew more about. (WCxKit)

 

 

  1. Premiums & Price Decisions

Many employers will shop for both their insurance broker and their workers compensation insurance based solely on the price. In workers compensation, this can be a major mistake because future workers compensation premiums are based partially on what is paid out on claims. If the insurance broker puts you with the “cheapest” insurance company, and poor claim service is provided and pays out more than necessary on claims, the overall cost of your workers compensation insurance program will be higher – sometimes much higher – in the long run. The knowledgeable broker will know which insurance companies provide the best claims service, resulting in your company paying a little bit more in premium now, but a lot less over time.

 

 

  1. Claims Management Help

The insurance broker often assists with claims management. This can include everything from reporting the claims to the state workers comp board and to the insurance carrier, to being sure the employer has met all state imposed reporting obligations. The broker may also arrange for loss runs that identify the information your company needs to set benchmarks and performance goals. The broker may be able to help facilitate better settlements and help work out problems with the insurance company.

 

 

  1. Customer Service Keeps Business

Smart brokers know that while price may get them in the door, it is customer service that keeps your business coming back. The level of professionalism of the account executive assigned to your program is key to your happiness with the customer service. The broker’s account executive will often do a comprehensive analysis of your business and strive to place your workers comp coverage with the insurance company that provides you with both strong claims management and good customer service.

 

 

  1. Employer Loyalty to Broker

The broker is counting on your loyalty to their company. The cost associated with recruiting new business, setting up new accounts and getting a new account off to a good start often exceeds the commission the broker earns from a new account in the first year. What the broker is counting on is keeping your business, as the cost of renewing your program each year is substantially less than the cost of obtaining your new business. Your loyalty and renewals are the broker’s profit. A thank you to your broker would be much appreciated.

 

 

  1. New Business vs Retained Business

Even though the first year of an insurance program is often not profitable for a broker, the broker continues to search and solicit new business to increase future profits. The broker walks a fine line between promising too much service and providing plenty of service to get new business from the employers who shop for more than price. There is an expression … “Treat your clients as if they were prospects.” Clients should expect to receive the same level of service after they have given the broker their business as they did when they were a prospect.

 

 

  1. Broker Assistance Expertise

If you will listen to your broker, there are many ways the broker can assist you in reducing your workers comp claim costs. The broker will be familiar with many services that can help you. Just because they are telling you (educating you) about those services, doesn’t mean the services are not necessary or you are being sold a bill of goods. Don’t make a buying decision either becuase your broker is telling you about it or not. Brokers have oodles of valuable experience so it behooves you to take advantage of the expertise. And, ask brokers if they have specialized personel such as cost containment experts you can work with.

  1. Claim cost reduction:

–      Safety programs including safety manuals, guidelines, and bulletins

–      Loss Control/Prevention programs

–      Return to work programs

–   Fraud prevention

–   Medical networks including both triage and case management

  1. Financial cost control:

–     Flexible payment programs

–     Pay-as-you-go programs

  1. Administrative issues:

–      Loss reporting

–      On-line policy information

–      Claim assistance

–      State reports

–      Loss runs

 

 

  1. Broker Size and Fit

Your insurance broker can be of almost any size from the national heavyweights who have an office in every major city, to the regional powerhouses dominating the local market or their section of the country, to the boutique brokers specializing in one or a few industries. (WCxKit)

 

 

A small employer with a limited number of employees can place business with the giant insurance agencies, the regional brokers, or the local specialty broker but the large employer has more clout with their broker if they represent a larger piece of their broker’s pie. No broker will tell you your account is too big or too small. Brokers want all business they can get, but a business wants a broker that’s the right size for their business. Having said that, most brokers work very hard for their clients.

 


Author Rebecca Shafer
, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.

Our WC Manual: http://corner.advisen.com/partners_wctoolkit_book.html

WORK COMP CALCULATOR: http://www.LowerWC.com/calculator.php

MODIFIED DUTY CALCULATOR:  http://www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP: http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

 

5 Things Your Broker Won’t Tell You About the Insurance Company

Great broker/agents are like magicians. They listen to your insurance issues, and with a sweep of their laptop they display a handful of carriers ready to solve your biggest Insurance problems, and they all compete to be the lucky one chosen to provide your company with all insurance needs. Brokers are near and dear to my heart, having worked with them for over 25 years, so take this with a grain of salt. Most brokers are open and honest, but there are a few that are less candid and some that don’t know the difference between claim handling capabilities of carriers, and they don’t have first hand experience with the multitude of services a carrier offers.

 

 

The truth is, some of these carriers can be a wolf in sheep’s clothing. Some may be worse than others. Some may be fantastic in one area, but awful in the next. Foolishly, some employers go with the cheapest option. The “cheap” choice always comes back to haunt them when the wheels fall off later down the road. The goal should be TOTAL loss costs.

 

Here are five generalized issues that may affect the employer-carrier relationship…

 

1 – The squeaky wheel gets the grease
It just might not be an unheard of concept that the bigger employers with the higher premiums get more attention and better customer service than smaller employers. The truth is people can’t be everywhere at once. Sure, bigger accounts get more attention because they bring higher claim volume and have more day-to-day interaction with adjusters than smaller accounts. But, that shouldn’t mean just because an employer has only 5-10 claims per year the business needs shouldn’t be met both promptly and professionally. If you are not getting the service you demand when you need it, it is time to switch carriers. Every claim should be handled properly and correctly, regardless of how large the premium.

 

 

2 – The adjusters have issues

Larger carriers often have high turnover. Every adjuster is different and with a different skill set. State licensing, current active caseload, years of claim experience, customer service skills, and medical knowledge are only a few items in the long list of demands an adjuster must meet.  While there are many great adjusters, there are also some poor ones. Some are so poor at handling claims they are marking time until the insurance company replaces them.An agent/broker probably will not tell an employer a certain carrier is being dropped by other employers because the adjusters assigned to their accounts were terrible. It’s important to meet and get to know the adjusters handing your account before you commit to bringing your business to them. If you do not get a good vibe, its best to keep looking. If the adjuster cannot sell themselves and their skills to you, then you might as well save yourself the headache they are going to cause later on when you need them and they let you down.

 

 

3 – There’s not an actual person handing claims in your jurisdiction

Having an adjuster within the local area can be a great asset. Typically, these adjusters are up to date with current legal trends within their state, as well as physician/attorney/judge reputations within your claims jurisdiction.For example, if you do business in Michigan, and your Adjuster is in Texas, chances are the adjuster is not informed about current insurance trends in Michigan, and that can hurt you and the outcome of your claims. Within each state, the cities and counties throughout the area can have a completely different demeanor than others within the same state. This is an extremely important fact to know, and it should determine how the claim is handled. Maybe a  judge in one county is very pro-employee, and no matter what evidence you have when determining the compensability of the case, these factors would not come into play. Doctors in one area of the state could be very aggressive, whereas another group of doctors in another area is very liberal with their treatment and causal relation determinations. This unseen factor cannot be overlooked, as it plays a role in every case the adjuster handles.

 

 

4 – We pushed this carrier on you

Some agents/brokers choose to write business only with certain carriers and others do not. If your agent only presents two carriers to choose from, you aren’t getting a very big picture of the available insurance market. Now this is not to say you should be given a laundry list of carriers. Instead, make sure you have what you think is a good, comprehensive list to choose from, and make your agent/broker work for you.

 

The broker/agent should be able to tell you why one carrier fits your needs better than others. Let them educate you on the pros/cons of each carrier they know and heard about. Meet with your top 3 choices. If they care about getting your business, they will gladly take the time to meet with you and go over your insurance needs and they will tell you what they bring to the table and, more importantly, why they are better than the competition. A good broker will help sort through the multitude of information you will be given.

 

 

5 – Carriers may bait you with a low premium

Some carriers want to write every business and write as much business as they can. They may do this by underbidding their competition and baiting you with a low premium. In the end, the carrier hopes you will not have a large claim or other large loss for them to deal with or absorb from a financial standpoint.

 

 

The loss ratio is always king for carriers (premium-billed vs claims dollars spent). However, these carriers do not last forever and quite often end up unable to meet their financial obligations. They dissolve their companies, leaving you with a huge mess to clean up. If you thought claims were hard to deal with imagine doing them with a bankrupt carrier. Remember the old saying, “You get what you pay for.” This is true when it comes to picking a company to provide you with Insurance or administration. If something seems too good to be true, it probably is.

 

 

Summary

Picking a carrier to handle your needs as an employer is a large, complex task – a task requiring the utmost thought and care. Through a relationship with an agent/broker, everyone should be helping you arrive at the correct decision for what is best for your company. If something does not feel right or if you do not think a carrier has your best interests in mind, you are probably correct – keep searching.

 

Note: Obviously this is tongue-in-cheek article with a little humor (attempted),  intended only to provide an insider’s view of industry issues.

 


Author Rebecca Shafer
, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.

Our WC Manual: http://corner.advisen.com/partners_wctoolkit_book.html

WORK COMP CALCULATOR: http://www.LowerWC.com/calculator.php

MODIFIED DUTY CALCULATOR:  http://www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP: http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

 

Leveraging Workers Comp Insurance Broker Services to Drive Better Outcomes

One thing you  learn quickly in today’s highly competitive business environment is never rest on your laurels.  The same holds true for workers’ compensation results.  Imagine this scenario:  Your claim management program has finally gotten traction, and frequency (claim counts) and severity (claim costs) are trending downward.  Lost workdays have also decreased.  Outcomes are improving, and you know executive management is going to be pleased with these results.  You report the news to executive management, and they give you a big pat on the back for a job well done, and then they instruct you to set new, “stretch” claim frequency and severity reduction goals.  Welcome to the new “top line/bottom line”-centric world! To meet the goals and set expectations you have to look beyond your internal team and take a broader view of your service providers.  Your claim administrator is not the only service provider who can help improve your outcomes.  What about your broker?  Are you exploring, and then effectively using, the brokerage services available to you?  If not, you may be missing out on services and resources that can help you drive better outcomes.  Many brokers offer the following services and resources, and they can serve as an extension of your staff where you need help the most. 1.  Claim Services a.  Technical experts to assist on complex, high-dollar claims b.  Claim audit and file review protocols, automated programs and assistance c.  Recommendations on how to develop the most effective claim administrator account handling instructions that facilitate success, rather than impede it d.  Assistance with claim administrator performance agreements and service contracts e.  Guidance on claim administrator service delivery model options 2.  Jurisdictional legislation, case law and reform experts a.  In addition to providing you with information, interpret what it means to your organization, and if appropriate, how to optimize cost savings related to state reforms 3.  Return-to-Work programs a.  Ideas on how to develop an effective program, how to implement it and how to measure results b.  Consulting-level expertise may be available 4.  Loss control/safety a.  Claims analysis:  A deep dive into why accidents are happening, to whom, where, when, how, and ultimately, how to prevent them b.  Safety program assessment, design, implementation, training, communication and monitoring c.  Industrial hygiene and OSHA expertise 5.  Workers’ Compensation cost allocation models a.  Ideas on how to charge claim costs back quickly, consistently and equitably, driving awareness and accountability within your business units, divisions and locations 6.  Service Provider marketing, assessment and selection a.  Assistance with Request for Proposals (RFPs), automated RFP response collection and assessment, selection of finalists, interviews and site visits, reference checks, negotiations and program implementation. Brokers work  with a variety of claim administration, medical management and risk management information system (RMIS) providers, and they know which of them consistently finishes on top in terms of outcomes and quality.                    7.  Benchmarking and customized reports a.  Comparison of your outcomes to your industry peers (by Standard Industrial Classification Code (SIC) or North American Industry Classification System (NAICS) b.  Customized reports to help you proactively identify and address claim trends 8.  Risk financing feasibility studies a.  Should you consider qualified self-insurance, higher retentions, self-administration or a captive to reduce the cost of your workers’ compensation program?� b. What option(s) will give you the greatest control over how your claims are handled? 9.  Research, reference materials a.  Brokers typically have extensive libraries of reference materials and often publish white papers based on research they have conducted.  Information is power, so make sure to avail yourself of these resources. Knowing that you have a variety of resources upon which you can draw makes the challenge a little less daunting.  And, by drawing on the experts, you will develop a state-of-the-art program that will drive progressively improving outcomes.  It’s a win-win! Another article about broker selection: http://reduceyourworkerscomp.com//choose-insurance-broker-wisely.php More FREE TOOLS: WC Calculator: www.reduceyourworkerscomp.com/calculator.php WC 101: www.ReduceYourWorkersComp.com/workers_comp.php Follow Us On Twitter: www.twitter.com/WorkersCompKit View the Entire Blog: https://blog.reduceyourworkerscomp.com/

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers’ comp issues.

©2009 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com

Have You Tried Calling Your Workers Comp Carrier?

Information is  the most essential ingredient in work comp claim management, but from where does information originate? The employer  tends to see itself as a source of information more than a recipient, believing, or hoping, the carrier will make all necessary efforts to gather useful facts – but is the carrier doing its job? The answer is a phone call away. Carriers are equipped  to obtain information contained on mandatory forms, such as reports of injury, and to a lesser extent, information obtained by investigators.   But, what about information appearing unannounced and unexpected? That is the sort of information which is often the game changer in difficult claims, especially those involving fraud or undue exaggeration of the disability. Such information  comes from sources close to a worker – co-workers, acquaintances, neighbors and relatives – who are understandably cautious in reporting suspicious behavior but sufficiently upset by it to make an effort to report it. A single phone call from such sources can save an employer hundreds of thousands of dollars — but only if the phone call gets through.  Social Security and the IRS go to great lengths to move such calls into dedicated hot lines but does an employer's carrier? An employer  should find out by making a call to its carrier, avoiding the inside numbers and calling on the general numbers found on websites or in phone books – the very places an unconventional source will seek them. What usually follows will in most cases leave a employer troubled, especially if it has a suspicious claim in progress. Carriers, for  nearly two decades, have relied on phone systems designed to delay a caller from reaching a live employee. Even then, it is usually an operator who directs the call to an answering machine were a recorded message informs the caller to leave a name, phone number and purpose of the call someone will call back. An employer  should test how long it takes to receive a call back when the caller is identified as someone who "has important information" and is reluctant to leave a full name. Most callers with sensitive information are reluctant to do even that much, preferring to hang up as soon as they are connected to an answering machine. If the employer leaves a name and phone number on an answering machine and never receives a return call the employer is only experiencing the same reception given to the most valuable calls. An employer, therefore, must consider itself the guardian of its claim info and take special steps to see that it is transmitted to, and acted on, by proper units within a carrier. If the claim has been in progress and the carrier has appointed counsel then counsel should also be copied, with a request that counsel call the employer to discuss the info. (workersxzcompxzkit) An employer  should not hesitate to request a conference with the claims supervisor to discuss unanswered calls or ignored claim material.  Nor should an employer be kept distant from the "carrier's" attorneys. (The attorney's primary client is always the employer – not the carrier – even when the attorney is selected by the carrier.) Author: Attorney Theodore Roncais a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers' compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. We accept articles on WC cost containment. Contact us at: Info@ReduceYourWorkersComp.com.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker about workers' comp issues.

©2009 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com

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