As Workers Comp Costs Rise, Agents Look for Big Ways to ...

17 Apr 2012

Earlier this month when MarketScout released its commercial insurance rates for March, Workers Compensation, along with Property, led the market with increases. Workers Comp rates increased by 4%, continuing the trend upward since late last year. National brokerage Willis confirms the rising rates, stating that about 90% of insureds are seeing rate increases on renewal, particularly in the Northeast (especially New York and New Jersey) and California. The brokerage expects rates to range from up by 2.5% to up by 7.5%.

Furthermore, in a recent 2012 P&C Workers Compensation & Safety Survey, cost containment is by far the number-one Workers Compensation insurance concern of employers for the next 12 months. Employers are also concerned about increasing exposures, renewals, and rising fraud behaviors.

As result of these increases, insurance agents are looking to help clients control costs, as all indications are that Comp rates will continue to rise as state funds keep asking for increases, and private carriers are looking to recover years of poor underwriting results and declining premiums with rate hikes. Part of the solution, of course, is an agency?s risk management division offering analysis of client data to flag high-cost claims in advance and help put programs in place to deal with these injuries, in addition to assisting a client in fostering a safety culture and implementing employee return to work programs.

However, many insurance agents want to give their clients results that are more immediate and tangible so they can retain customers as their renewals are coming up, and gain new clients, through premium savings. Many find a win-win solution with APEX Services and its Workers Compensation Premium Recovery program. APEX provides agencies with the ability to go in and tell customers that through a detailed analysis and audit of their Workers Comp program, they can save them money because of carrier errors and overcharges in current and past policies. What?s more, the client doesn?t have to pay for the audit, and the agents don?t have to do any of the work. In fact, APEX will conduct the audit on a contingency basis, receiving 50% of the monies recovered with the customer getting the other 50%. A 20% commission from APEX?s fee is paid to the agent/broker who offered the service.

?We recover premium dollars for 90% of the Workers Comp accounts we audit,? says Simon Feuer, president of APEX Services, ?due to the many errors that can occur with a client?s policy.?

Simon explains that over the years state and federal changes have been implemented and the insurers typically don?t go back and retroactively adjust policy rates to reflect those changes. ?A client and broker may be doing everything right with data analysis, claims management, risk management, and safety program implementation, but there are errors in premiums that go back ten years or so,? says Simon. ?We analyze everything to pinpoint where there have been overcharges and correct these mistakes.?

In fact, APEX has been so successful since opening its doors in 1994 that it has recovered more than $48 million in Workers Compensation premium overcharges for more than 3,000 customers. Clients span many industries, including healthcare, manufacturing, transportation, construction, non-profits, and food, among many others.

Examples of Apex?s success in vetting out errors and correcting experience mod factors include: A construction company with a paid premium of $950,00 that received a refund of $423,167 because of payroll omissions at the Comp Board and claims reserves revisions; a healthcare chain whose premiums since 1994 have ranged between $1-2 million received return premiums totaling over $510,000; and a manufacturer received return premiums totaling $236,120 based on paying premiums between $200,000-$300,000 since 1996.

In today?s economic landscape, strict regulatory environment, and increased expenditures including in the area of Workers Comp, making it more challenging for companies across all sectors to thrive and grow, APEX provides agencies with a service that can serve to differentiate themselves in an increasingly tough insurance market. For more information about APEX, you can contact Simon at 888.380.2739 or e-mail him at simon@apexservices.com. You can also visit: http://www.apexservices.com/.

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