Topic: RISK

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. 

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. 

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?

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 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. 

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. 

At the end of 2020, management consulting firm McKinsey & Company surveyed 899 C-suite executives about the impacts of the pandemic on business operations. One of their conclusions was that the pandemic had accelerated the adoption of digital processes by three to seven years, with B2B firms like those in the PEO space on the higher end of the spectrum.