UPFRONT
WORKERS’ COMP UPDATE NEWS BRIEFS Arkansas announces double-digit WC rate reduction
Employers in Arkansas will see a big reduction in the cost of workers’ compensation insurance, thanks to a significant drop in workplace fatalities and injuries in the state. Citing a recordlow rate of workplace fatalities – which fell from 106 in 1995 to 49 in 2017 – Arkansas Governor Asa Hutchinson announced that the state will adopt the 14.4% rate reduction suggested by the National Council of Compensation Insurance. “This is the largest reduction in workers’ compensation insurance in over 20 years,” Hutchinson said.
Pinnacol returns $50 million in dividends to policyholders
Colorado workers’ compensation insurer Pinnacol Assurance distributed $50 million worth of workers’ comp dividend checks to its policyholders in March. About 94% of the company’s policyholders – nearly 53,000 employers throughout Colorado – received a dividend check; the average check was for $944. “Pumping $50 million back to our policyholders will help them invest in the people, processes and technology to keep up in Colorado’s fast-moving economy,” said Pinnacol president and CEO Phil Kalin.
Partnership aims to alleviate opioid use through virtual reality
Travelers is partnering with Cedars-Sinai, Samsung Electronics America, Bayer and appliedVR to test the effectiveness of a virtual reality-empowered digital pain reduction kit. The kits are made up of state-of-the-art technology, including a VR headset and wearable fitness band, biosensor-powered therapeutic pain management content, and an electrical
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nerve stimulation device. The kit will measure day-to-day functional status, work productivity and the use of pain medication by participants; the data will be analyzed by a research team at Cedars-Sinai. “With the tendency to develop chronic pain with workplace injuries, there’s a risk then to become addicted to opioids,” said Travelers’ Melissa Burke. “We want to be able to find appropriate alternatives.”
Stonetrust expands workers’ comp insurance to new states
Following the completion of its acquisition by Wintaai Holdings, Stonetrust Commercial Insurance Company has started writing workers’ compensation insurance in Missouri and Tennessee. The Louisiana-based insurer focuses on a few key industries, including construction, manufacturing, retail and wholesale, and already writes business in Louisiana, Texas, Oklahoma, Arkansas, Mississippi and Nebraska. Stonetrust president and CEO Michael G. Dileo said the company also plans to enter Kansas and Alabama in 2018.
Landscaping business found guilty of payroll fraud
Texas-based landscaping company Jammers Groundscapes has been ordered to pay $400,000 to Texas Mutual Insurance Company after admitting it misrepresented its payroll between 2009 and 2015. During that time, the company circumvented paying its full workers’ comp premiums by concealing payroll for an associated company that didn’t have coverage. “When dishonest companies commit premium or payroll fraud, they can put their employees’ coverage at risk,” said Tim Riley of the Texas Department of Insurance’s Division of Workers’ Compensation.
Riding the workers’ comp wave The strong market for workers’ comp insurance won’t last forever. So how can brokers prepare their clients?
It’s impossible to escape the bandwagon effect. In all areas of life, there will be people who pop up when times are good and vanish quickly when prospects turn around. That’s certainly the case in the “historically cyclical” excess workers’ compensation market in the US, according to Gus Aivaliotis, chief underwriting officer at Safety National. Right now, the industry is moderately strong after several years of favorable results, including an average combined ratio below 100% in 2017. However, the industry’s good fortune isn’t likely to last. “Strong results in workers’ compensation trigger a cycle whereby carriers start to be more competitive and try to capture new market share to generate profit,” Aivaliotis explains. “It’s a cycle we’ve seen repeated throughout the history of workers’ compensation coverage. Carriers, and also certain states, tend to react quickly to favorable results by decreasing rates, but over time, as rates drop, you tend to see a shift in profitability in the workers’ compensation line of business.” Over the next couple of years, Aivaliotis anticipates that heightened competition and rate decreases will drive the workers’ compensation industry into combined ratios above 100%, which will push the market back into the challenging part of the cycle. In such a cyclical market, companies and risk managers are always looking for the
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13/04/2018 1:06:21 AM