Employers Direct Insurance Company has cut its workers’ compensation insurance rates by 8.2 percent in its current filing with the California Department of Insurance. This decrease is reportedly more than twice the preliminary average reduction of 3.6 percent reported by the state department.
Employers Direct can cut rates more than the industry average because its aggressive claims department is better able to administer the new state regulations that go into effect in Jan., 2004, according to Chief Financial Officer Ronald Groden. Additionally, the company has no tail of under-reserved prior years’ claims that have to be covered by “surcharging” current rates.
“Our rates reflect both our experience in 2003, our lack of old claims and our ability to take full advantage of the opportunities offered by reforms in 2004,” Groden said. “Over the past year, we have demonstrated the ability to lower claims costs and ultimately the insurance costs of our clients. This experience has made us confident in reducing rates more than twice the industry average and nearly three times the reductions filed by the State Fund.”
Employers Direct is the first new workers’ compensation insurance carrier to be licensed by the California Department of Insurance in more than a decade. Employers Direct entered the California workers’ compensation insurance market in late 2002 with an initial $50 million in unencumbered capital and the support of an investment group. The lead investors are Securitas Capital and Golden Gate Capital.