INSURANCE MARKET BAROMETER: FOURTH QUARTER 2023
As we prepare to enter 2024, here is a look at a few key indicators to explore the state of insurance markets. We’ll also examine key events that have impacted markets recently.
TIME ON YOUR SIDE: FIVE SCRAPPY WAYS YOUR PEO CAN USE AI TO SHRINK THE GROUP HEALTH SALES CYCLE
In your group health sales cycle, time is of the essence. Shorter sales cycles generally lead to larger volumes, higher revenues, more satisfied account execs, and repeat customers, especially for an annual purchase like group health insurance. You can shrink the time you turn a lead into a customer by adding a speedy new member to your sales team: artificial intelligence. AI can help you close deals faster than your competitors can get their boots on.
ASK THE EXPERT: A Q&A WITH PAUL NASH OF BEAZLEY
Paul Nash is an employment practices liability (EPL) underwriter with Beazley. He is the EPL and Safeguard product leader for both the UK and US teams and was instrumental in developing the first SAM/SML policy issued by Beazley in 2006. He has more than 30 years of experience in the insurance. He recently spoke with Paul Hughes of Libertate Insurance about the state of the EPLI market, how he has seen the PEO industry evolve and more. PEO Insider captured their conversation.
MY CLIENT MOVES TO A NEW STATE: WHAT ARE MY NEXT STEPS?
The rise in remote work has brought new challenges. Sometimes, a client notifies its PEO that they are hiring an employee in a new state where the PEO might still need to be licensed. So, what should you do? Below are some key points to consider when a PEO does business in a new state.
THE PEO PERISCOPE: A LOOK UNDER THE INSURANCE MARKET
By utilizing the most current and credible information available, Insurance Trends provides quarterly feedback and insights on the insurance industry and its impact on the PEO community. It provides current analysis and futuristic expectations on the terms and conditions that should be anticipated for property and casualty lines of business insurance that impact a PEO and its client companies.
5 Ways PEOs Can Minimize Workplace Safety Liability in California
The COVID-19 pandemic caused workplace safety to be viewed through a lens of magnified importance, but as the world regains a sense of normalcy three years later, many employers have placed it on the back burner. However, now is not the time for complacency in California, particularly considering Cal/OSHA’s vacillating view of PEOs.
DELIVERING VALUE THROUGH RISK MANAGEMENT
Small to medium size companies rely on PEOs to effectively manage critical back-office functions of their businesses such as payroll, employment taxes, employee benefits, human resource functions, and workers compensation insurance. As a co-employer, PEOs specialize in the most efficient and effective means of supporting their clients by leveraging not only economies of scale, but a firm understanding of the ins and outs of workers compensation and risk management. Just like their PEO partners, carriers also have a positive incentive to improve the viability and efficiency of insureds workers’ compensation programs.
WHY IT’S GOOD BUSINESS FOR YOUR CLIENTS TO HAVE A BUSINESS CONTINUITY PLAN
It’s no secret that small business owners have an overflowing list of responsibilities on their plates. Whether they are in the early stages of starting a business or have been operating for years, the stressors impacting small business owners often make it challenging for them to see beyond day-to-day tasks and short-term goals.
THE EVOLVING ROLE OF THE PEO RISK MANAGER
To protect their organizations, PEO risk managers need to expand their thinking and competencies to identify and address emerging risk exposures that threaten the reputation and operational ability of their PEOs. The PEO business and threat environment will continue to change. PEO risk managers will be challenged to continue to effectively identify and mitigate risks while adding organizational value.
NOT SO RISKY BUSINESS: TACTICS TO FRAME YOUR RISK REDUCTION STRATEGY
PEOs are in a unique situation of being the major—and sometimes only—source of HR services and expertise for many businesses that have varying levels of interest and time to put towards these issues. It’s a bit like being an online lecturer at a major university for undeclared freshman. Several may stay after to graciously thank you for the revelations, though you may hear some snoring. Communicating with clients in ways they understand the seriousness of some issues is hard.
AVOIDING ROADBLOCKS: CREATING IDEAL RISK MANAGEMENT DASHBOARDS
Key performance indicator dashboards instantly produce either awe or fear when brought up in conversation, and for good reason. They can be seen as straightforward, objective models that can do no wrong. Or, they can be seen as confusing, subjective, instruments rife with errors. While you have likely seen examples of many different types of dashboards (the good, the bad, and the ugly) it begs the question: what should a dashboard be in its most ideal form? More specifically, what is the most ideal dashboard for a PEO risk management professional?
NEXT GENERATION PEO RISK DEPARTMENTS
As we all know, the year is 2023, and as PEO risk managers it is important that we embrace the title of a Bob Dylan classic: “The Times They Are A-Changin’.” Given the myriad of changing issues facing the PEO risk manager, a detailed point-by-point examination of the evolving issues would be too lengthy to illuminate within the pages of this article. That being said, this article will focus on two emerging and evolving issues that the PEO risk manager should embrace: dynamic risk analysis and next generation risk department staffing.
5 QUESTIONS TO ASK A CLOUD SERVICE PROVIDER ABOUT CYBERSECURITY
One of the questions I’m frequently asked by PEOs is simple: Is the cloud safe? Actually, this is a trickier question than it seems. The answer is yes, of course, but like any internet-based endeavor, there are certainly many caveats. Cloud security requires you to think about security differently than on-premise security or data center security.
DISASTER RECOVERY FOR PEOS
Disasters are inevitable, and their timing is unpredictable. Preparing your company and employees before disaster strikes can make the difference between a catastrophe or an inconvenience. While no one wants to experience a business disruption, especially any technology-related disruption, there are many reasons that you could end up in that position.
HOW TO SPOT CLIENT RISK AND WEIGH VALUE
Risk. On one side, it contains success stories that share leaps of faith that paid off; on the other, it holds shattered dreams of big gambles that eventually sunk a business. In the PEO world, risk is on every executive’s mind each time a new client is signed, and it’s not something taken lightly. For Stratus HR, that assessment is less about a balance sheet and more about the company’s history and values.
DON’T GO TO SLEEP ON THE WORKERS’ COMP MARKET
In May 2022, NCCI issued their Annual State of the Line report which hit on key workers’ compensation metrics and trends impacting the industry. There can be no underestimating the positive results. With an 87% combined ratio, 2021 marked the eighth consecutive year of record underwriting gains.
CULTURAL CHANGES IMPACTING INSURERS AND EMPLOYERS
Whether it be the pandemic, the Great Resignation, or sweeping social and regulatory changes, there can be no denying that insurers and employers alike are going through a significant cultural change that hasn’t been seen since the passing of the Affordable Care Act (ACA).
TURNING THE TIDE: SEIZING OPPORTUNITY AMID ECONOMIC CHALLENGES
If you read any newspaper, watch any news program, or listen to any business podcasts it’s impossible to avoid discussions of surging gas prices, record inflation, labor shortages, supply chain bottlenecks, and—scariest of all—signs of a looming recession.External influences like these economic forces are part of any business cycle. You can’t out-grow, out-innovate, or out-think market forces. However, how you respond to such influences can be determinative in how well you fare through challenging economic cycles.
Workers’ Comp Reserves: Finding the Right Number
While walking one day, I ran into a neighbor doing yard work. We hadn’t spoken much before, but upon striking up conversation I soon learned of his love of woodworking. His excitement led him to take me on a tour of his basement, where I saw all manner of intricate saws and Depression-era tools, along with beautiful pieces of furniture. The neighbor was giddy as he showed what was clearly one of the great joys in his life. Similarly, as an actuary, “finding the right number” is one my great joys. Best yet, this topic is applicable to all industries and coverages. So, how does an actuary find the right number?
WORKPLACE VIOLENCE: HELPING CLIENTS CREATE A CULTURE OF CIVILITY
While workplace violence incidents may not have dominated the news cycle during COVID, incidents of workplace violence have increased over the past three years. According to one recent survey conducted by a major insurance carrier, 34 percent of small and mid-sized businesses experienced at least one employee threat or violent incident. This article examines some of the fundamental causes of workplace violence and the unique value PEOs can bring to their clients in addressing workplace violence and workplace culture issues.
The CSA in a Multi-State Environment
As the industry has grown over the years, PEOs have evolved naturally in the direction of multi-state operations. This has always been true, but the pace or scope of this effect accelerated with the rise of remote work during the pandemic. The PEO client service agreement (CSA) is a challenging document. The complexities and ambiguities of the PEO arrangement require a lengthy contract to reasonably address the risks and to protect the PEO. These challenges are magnified by the need to address state-by-state issues.
The Mysterious WC Carve-Out Arrangement
The term “carve-out” is commonly used in the industry, but how it works may not be quite as clear. For those who are not familiar with the term, it describes an arrangement in which the onsite client secures its own direct workers’ compensation coverage for its workforce. Because that client has contracted to be in a PEO arrangement, the co-employees performing services for that client are covered under the client’s own workers’ compensation insurance policy, not the PEO’s policy. Typically, that coverage is sufficient and no other problems arise.
CYBER INSURANCE TODAY: PROTECT YOUR SYSTEMS TO GET THE BEST COVERAGE POSSIBLE
Cyber insurance coverage and underwriting have changed a lot since the first cyber insurance policy was sold in 1997, especially in the last two years. Cyber insurance didn’t really take off with business owners until around 2014, when cyberattacks became more frequent and primarily involved stealing personal and private information of businesses’ employees and customers. When stolen personal information resulted in identity theft, businesses faced financial liability as they found themselves being responsible for the restoration of the identities. Businesses performed restoration either voluntarily or after lawsuits were filed. These businesses also found themselves paying for credit watches for all of the individuals whose information had been stolen.
THE STATE OF THE EMPLOYMENT PRACTICES LIABILITY INSURANCE MARKET
One of the trends over the last 12 to 24 months has been the hardening employment practices liability insurance (EPLI) market. Companies that may be accustomed to focusing on workers’ compensation risks are seeing large EPLI rate increases, rising retentions, or both. The goal of this article is to discuss ways companies can potentially mitigate these rising insurance costs. But first, it is helpful to understand what EPLI is and isn’t, then discuss market trends, and finally cover potential actions to take.