The board of directors of Beacon Mutual Insurance Company, a Warwick, R.I.-based workers’ compensation carrier, has elected Brian Spero as president and CEO of the company, effective in July.
Beacon’s board worked with a national consulting firm, The Hay Group, to establish a succession plan following Spero’s election. Through that process, the board chose Spero to succeed James Rosati, who retired after serving as president of the workers’ compensation insurer for more than a decade.
It also chose Rajani Mahadevan, Beacon’s vice president of information systems, to succeed Spero as COO. The board additionally announced Bradford A. Dean and Steven J. Issa as new board members.
“My vision is to ensure that Beacon remains the insurer of choice for Rhode Island for workers’ compensation insurance,” Spero told Insurance Journal. “We are a one-line, one state carrier. All we do is workers’ compensation, and we only do it in one place.”
Beacon provides workers’ compensation insurance to more than 12,000 Rhode Island businesses, according to a company press release, and Spero said the company’s ability to locally serve policyholders one-on-one is a strategic differentiating factor between Beacon and other national carriers.
“Because we’re a one-line, one state carrier, we differentiate ourselves in terms of service,” he said. “We are within one hour of every one of our policyholders, so we can go see them and they can come see us. Our door is always open. We’re not just a nameless, faceless carrier. We are very active in the Rhode Island community. Because we are Rhode Islanders, we know Rhode Island.”
Spero says this localized strategy is one the company has used in the past to maintain its strength, and it’s something the company plans to continue. However, operating within the workers’ compensation industry today does come with certain challenges, Spero added.
“Medical cost escalation is a real challenge,” he said. “In Rhode Island, we have comorbidity and general health issues with our workforce. Also, the Rhode Island workforce is aging. These issues present challenges for us because they affect the severity of the claims in Rhode Island. Older workers, or workers with comorbidities, take longer to heal, resulting in higher indemnity and medical costs to the system.”
To mitigate these challenges, Beacon works to predict which cases are going to be problems earlier and manage medical expenses.
“We know every claim in our book and are so closely involved in the medical community, it’s easier for us to manage our costs,” Spero said. “Because we’re smaller and a little more agile, it’s easier for us to watch the dollars closer.”
Being smaller and agile has also served the company well in terms of technology and its rapid advancements within the insurance industry, he added.
“Obviously, technology is changing the insurance industry at a rapid pace,” Spero stated. “Technology demands are a challenge for every carrier. Because Beacon is smaller and more agile and sells just one product, we’re better able to adapt quickly. As the demographics of our policyholders change, it’s important for us to be on top of the technology to ensure we’re meeting the expectations of our younger, more tech-savvy policyholders.”
Indeed, automation can reduce costs for the workers’ compensation industry, technology can make it easier to interact with constituents and predictive modeling can result in better pricing and claims results, Spero explained. Although technology has benefits for the workers’ compensation industry, Spero offered a word of caution in terms of how it is utilized.
“To the extent a carrier can use analytics and technology to better predict results, those are important tools,” he said. “However, Beacon and other carriers need to be cautious not to chase technology just for technology’s sake.”
Over the long-term, Beacon is striving to better serve its policyholders while ensuring continued stability in the Rhode Island workers’ compensation marketplace, Spero said.
“Treating injured workers with dignity and respect is part of Beacon’s core mission,” he explained. “It’s important for us not only to serve our policyholders, but to make sure we’re taking the best possible care of their injured workers. Employees are the most valuable asset of our policyholders. We have a lot of programs and processes in place to ensure our injured workers are getting the proper care and getting back to work as soon as possible.”
Spero has been with Beacon for nine years both in the roles of chief operating officer and general counsel. Prior to Beacon, he was a founding partner at Partridge Snow & Hahn LLP and had practiced law in Providence, R.I., since 1979.
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