How to Place Insureds with a History

Managing your workers' compensation book of business will have its challenges. Among the most difficult are hard-to-place and difficult-to-insure clients. 

From construction to logistics, these high-risk industries carry an expensive insurance cost. It takes strategy and a hands-on approach, but you can manage these clients and place them with a policy that fits their needs and budget.

As you work with your clients, keep some of these ideas in mind. While their business may be hard to place, it isn’t impossible. There are several ways you can make sure they get the right coverage and reduce those ultra-high premiums. 

Know thy customer (and their employee classification)

This may be one of the oldest quotes in marketing, but it has a great application to your customers. When looking at your client’s business, examine how employees are classified. Distinction in payroll is very important because it can result in premium savings.

Correctly classifying employees is one of the best ways to manage hard to place industries. Oftentimes employers will pool all workers together instead of categorizing them based on job duties. This can lead to placement in the highest risk premium category. Once clients have their classifications correct, help them set up a system for classifying every new employee and role correctly. 

For industries like construction, some clients may be able to use what is known as the interchange of labor. If an employee does two different job functions, an employer can split their time to reduce the premium cost. Detailed records will need to be maintained of the workers' time on each job. The employee’s pay will also need to be split between the jobs in payroll. Each state has varying rules and regulations in regards to an interchange of labor, so what works in one state may have a different application elsewhere. 

Dive deep into loss history reports 

If your client is experiencing long loss history reports, this will impact their premium. Sit down with them and examine the report. Look for discrepancies or trends in the claims. 

Loss history reports can show areas of need in your clients’ safety models. For example, improvement may be necessary for the workers' compensation filing process. If they’re filing too slowly, it will impact the cost of the claim. 

Analyzing loss data can open up the opportunity to look at various jobs and occupations that may need addressing. Maybe your client needs to offer additional training, safety education, or personal protective equipment. 

Review loss history reports at least once per quarter. Take time to schedule a meeting with your client and review this report with them. This may be something they overlook when left on their own. You can be a valued partner by diving deep into the report and looking for opportunities to make the process better and save money. 

Address the ex-mod

In addition to loss runs, your client may have an experience modification rating. This number, expressed as a percentage, is the rating a carrier will use to monitor and incentivize workplace safety. 

If your client's ex-mod is limiting market availability, first review their experience mod worksheets from previous years to check for errors and drastic (10 pts and above) increases. There may be an error you can reverse in order to lower your clients’ ex-mod. 

Next, review the frequency of claims (vs. severity), and develop a strategic plan for addressing high-frequency losses. Every client knows the importance of good safety protocols, but most business owners also admit that fully abiding by various OSHA regulations and addressing unsafe behavior are constant challenges.

If a client has no claims history, and therefore no ex-mod, you may need to explore alternative risk solutions. 

Seek an innovative solution

Traditional workers' comp insurance has always put your hard to place business at a disadvantage — especially those that have no loss history or long loss reports. They are consistently plagued by high premiums or high-risk pools. 

Safety management technology has paved the way for better work environments, indirectly saving clients money by reducing claims. But these benefits are tied into lagging indicators like lost time incident rates. The disconnect can leave companies reeling when faced with new, unexpected losses. 

Foresight was built by safety and risk management professionals to give brokers access to work comp premiums that are more affordable out of the gate — and can be lowered over time. 

Creating a safer work environment will lead to lower premiums for Foresight insureds. Your clients managing great safety programs will feel the benefits far sooner with Foresight than with other carriers. 

For your clients with no claims history, utilizing safety management technology can establish good practices — and make them stick. It will help your clients reduce expenses while gaining access to a value-adding risk management platform.

Stay engaged 

Once you do place your client, it’s even more important to stay engaged with their safety process and incident response plan. Don’t sell your experience and knowledge short here — your input is valuable, even if the client has a set process for responding to injuries. 

Attending to the needs of the injured employee and investigating incidents thoroughly are two fundamental ways you can reduce friction and length of open claims.

You likely take a lead role in the claims process to reduce any headache (and extra costs) your client doesn’t need. That’s a worthy effort, and my guess is that you’d like the tools and time to do it even better. Look for innovative carriers like Foresight, an MGU with a robust risk management platform to help you remain involved and get results — and do it all in less time with less grunt work.