Price, all too often, is the single factor in an agent’s choice of workers’ compensation insurance coverage for his or her clients. An effective way to differentiate your agency from your competitors is to shop carriers based on value. Actual value is determined by price plus the addition of several factors.
The following checklist offers the added value agents should look for when placing business.
1. Financial strength – Property/casualty market softening may cause carriers with favorable finances to re-evaluate their market focus. No one wants to have to re-shop coverage midway through the policy year because a carrier has exited a market. One respected measure of financial strength is a insurance carrier’s rating from the A.M. Best Co. Look for a rating of “A-” (Excellent) or better.
2. Dedicated to your market – To provide optimal service, a carrier must be accessible. Local offices and dedicated sales and underwriting staff within driving distance are key to a successful working relationship.
3. Automated underwriting for small businesses – When it comes to small accounts, time to market is critical, and “low touch” technology is essential. Agents can save time and money, and even grow their businesses, by working with carriers that provide truly automated renewal and new business underwriting and account management.
4. Managed care management – Agents should be able to assure their clients that their workers’ compensation carrier is working to keep medical costs and productivity losses to a minimum. Carriers that provide real “managed care” have solid partnerships with health care providers, expert physician advisors, nurses and their own experienced care management professionals. Those partnerships can ensure that injured workers receive the highest quality care, while also helping to minimize downtime and costs associated with work-related injuries or occupational diseases. Timely and efficient case management handled by a knowledgeable, compassionate nurse network – rather than by a series of claims representatives and adjusters – can mean the difference between a retained customer and a lost customer at renewal time.
5. Subrogation and fraud investigation can help to restore a client’s experience modification and enhance profitability – Uncollected fees can end up costing all clients more. Savvy agents are aware of a workers’ compensation carrier’s subrogation efforts to accurately allocate claims costs among all in-force policies. Carriers with active fraud investigation units, too, can keep rates fair through aggressive pursuit of those trying to cheat the system.
6. Dynamic loss control programs, for both big and small accounts – Another way to provide value to clients is through injury prevention training, better known as loss control. Many carriers will only offer loss control programs for medium to large accounts. However, loss control is essential for clients of every size. Look for a workers’ compensation carrier offering up-to-date, Web-based electronic tools and on-demand printed materials for business of all sizes.
7. Efficient claims reporting systems – Studies show that the longer it takes for a worker to report an injury, the more the claim will end up costing the client. When evaluating workers’ compensation coverage, look for carriers that have efficient injury reporting systems, including 24/7 customer service telephone lines, bilingual operators and online reporting capability.
While price will continue to play a key role in where agents place business, they should always remember to balance price with the value of the workers’ compensation carrier’s offering.
Jim Harris is an executive vice president at Brown & Brown Insurance of Nevada, in Henderson, Nev. He has worked in the insurance industry for 30 years.