(PRWEB) January 31, 2013
Apex Services has created a whole new way of dealing with recent NCCI workers comp changes and a firming market. Apex Services uses a systematic approach to workers compensation premium recovery.
There has been much ado about the workers compensation audit and premium marketplace over the last several years, and particularly in the past year or so. We’ve seen rate increases, a firming market, carriers struggling with underwriting profitability, a rise in claims frequency, and businesses paying more in premiums even though payrolls are down. Much of the talk in the industry centers around cost containment, loss control protocols, risk management, Return to Work programs, vetting out fraud, and, most importantly, getting a grip on workers comp premiums and workers comp audit.
According to Apex Services, one the biggest issues facing the workers compensation industry is that year after year employers find themselves paying more for coverage that comes with workers compensation overcharges while revenue and staffing levels have been significantly reduced or remain flat. This decrease in payroll and revenue does not correlate to the rate increases taking place in the workers comp marketplace. Overall, in the United States going back to May of 2001, the unemployment rate was 4.10%, today it is 7.6%. That’s almost double the rate from twelve years ago.
Apex Services data shows that today’s ‘hardening’ market is taking place in a much different environment than in 2001. When the market hardened as it did the last time, businesses were doing well. When they were hit with premium increases, they weren’t pleased but it was part of the cost of doing business. Now employers are seeing increases at policy inception and seeing even higher premiums after getting their year-end workers comp audit bills arrive. Most are not in a position to absorb these costs. Some employers are in a state of disbelief upon receipt of a workers comp audit bill for a recently-expired workers compensation policy. They still have to carry these costs while they are on shaky grounds financially.
When looking at what makes up the experience mod factor, payroll is the main determinate for a company’s allowable expected losses. The higher the payroll, the more room for expected losses. The big problem here is that, although company payroll has decreased due to layoffs and a retraction in hiring over the last several years, businesses are not experiencing fewer claims. Instead they’re seeing an increase in claims frequency, impacting the experience mod’s primary losses, which in turn drive the mod up. You’re allowed fewer losses because you have lower payroll, but in fact your losses are higher than what is allowable.
Based on the current workers comp market, continued rate increases (to offset rising costs), and the NCCI split point mod changes, immediate action is needed to obtain immediate results. The only immediate solution to reduce experience mods effective 2013, 2014, and 2015 is to change losses that have already occurred. For example, the 2013 experience mod utilizes losses from 2011, 2010, and 2009. In order to knock down an employer’s 2013 experience mod and most of the 2014 and 2015 mods, workers comp premium recovery is needed. Safety and loss control protocols only affect forward solutions, but do have an impact on previous years. Workers compensation review offers solutions going backwards and forwards.
What always works well is when brokers and employers utilize insurance recovery services that have no out-of-pocket expenses and work on a no-recovery no-fee basis to obtain workers comp refunds. It’s a win-win for everyone. Safety and loss control programs are great but they can be costly, and they require a lot of time and patience and someone to manage the programs daily to make sure that they’re actually effective and stay effective. With the service we provide, which is contingency-based, you have nothing to lose, and you get quick, quantifiable results. What’s more, if you are a broker, your clients/prospects will receive workers comp audit refund on current and prior years’ workers comp policies and save on future years. You will not only benefit by maintaining current clients and winning new prospects, you’ll also give these employers workers compensation refunds and a better underwriting profile in the renewal marketplace.