“We’re a one trick pony. All we write is workers’ comp, but it’s very good trick and we do it very well,” Math instructed Insurance Business.
“We have the best underwriters in the industry, and we’re able to tackle difficult accounts and get to the right price and underwrite effectively – this year, we should finish over $200 million in premium.”
Read extra: IBA 5-Star Program Administrators 2022 – SPECIALTY COMP INSURANCE SOLUTIONS
The enterprise is now not a “well kept secret”, the CEO mentioned, and along with its longer-term relationship constructing, it has this yr made a “conscious effort” of getting its identify on the market on-line, by digital content material, in addition to social media sharing.
“Who would have thought that 30 years ago, social media would be such an effective platform for getting your name out there and engaging with customers, but now it’s vital to being a leader in the industry,” Math mentioned.
While different strains have hardened, staff’ comp has remained what many may name a smooth market, with charges remaining comparatively static.
“The reason why you’re getting rate increases in other lines of business outside of workers’ comp is because you need them to bring the line of business into a state of profitability; however, for workers’ comp, we’re already in a profitable state, so we just need to not cut our own throats with rate decreases that are suicidal and detrimental,” Math mentioned.
“The industry as a whole is still very profitable, so workers’ comp is soft with regard to rate level, but it’s strong with regard to performance, and I don’t see that really letting up in the next couple of years.”
Profitable development mustn’t simply be about delivering outcomes for the MGA, but in addition about offering good outcomes for insurers by fraud discount and security efforts, in response to Math.
Math might have been assured that his enterprise will proceed to thrive, however he did have phrases of warning that some corporations might discover themselves in a extra precarious place.
“The companies that don’t know what they’re doing are going to move from a profitable state to an unprofitable state; those that rely on cash flow underwriting and investment earnings, and those that are willing to ignore some of the early warning signs, either on an account-by-account basis or in the industry those companies will have some rough times ahead,” Math mentioned.
“But I believe being the most effective in breed in staff’ comp – these which might be within the prime fiftieth percentile and twenty fifth percentile – will proceed to seek out ample alternative to develop worthwhile enterprise outcomes. “
One area of interest that has proved to be successful story for Specialty Comp is staffing firms that present expert staff, and this has been buoyed by some employers’ post-COVID strategy.
“Post-COVID, many companies chose not to hire workers back, but rather to engage in staffing companies that provide skilled labour force,” Math mentioned.
“We are large into the staffing niche, where we’ve written several staffing companies that have grown significantly once the COVID rebound occurred, and we’ve enjoyed success as those staffing companies have grown materially.”
Staffing might have proved a win for the enterprise, however one space that continues to hassle staff’ comp underwriters is the gig financial system. Sixteen p.c of Americans had sooner or later earned cash by a gig financial system platform as of August final yr, in response to a Pew Research Center survey.
“It’s very difficult to understand when gig employees are on the clock, doing actual work for which they’re compensated for versus when they’re not on the clock, and thus not subject to or entitled to workers’ compensation benefits,” Math mentioned.
“That’s really a curveball that the gig economy has thrown the workers comp industry, and it’s still yet to be determined how the industry gets its arms around that.”
Read extra: Executive Insights Report: Workers’ Comp Insights 2021
For many years, staff’ comp fraud had been estimated at $7 billion a yr, however a current report by the Coalition Against Insurance Fraud pegged it at round $34 billion yearly. Of this, $9 billion comes from worker fraud, whereas $25 billion is employer fraud, the coalition’s staff’ comp job power discovered.
Employer fraud might be a enterprise hiding or misrepresenting its payroll or benefiting from the “gray area” between whether or not a employee is a workers member or a contractor.
What Specialty Comp sees extra of, although, is misclassification of workers, for instance classifying a roofer as being in a clerical place.
“During the course of my career, I’ve seen many [employees in clerical positions] falling off of roofs, and that doesn’t make a whole lot of sense to me,” Math mentioned.
As for the way brokers and brokers on the entrance line may help to fight staff’ comp fraud, Math mentioned: “Agents simply should be true to themselves; brokers will generally view themselves as an advocate for his or her consumer, however brokers are actually an extension of the insurance coverage provider.
“As such, they owe the insurance carrier a proper amount of due diligence and representation and [must make sure they are] collecting all the correct information and reporting it accurately.”