WORKERS COMPENSATION INSURANCE
Worker’s Compensation Insurance (worker’s comp) is mandatory in nearly every single US state. It is a specific type of insurance that must be purchased in addition to any other policies that a business is covered by.
Worker’s comp is designed to cover costs like medical expenses and a portion of lost wages for workers who become injured at work. Coverage will also usually include some of the costs of workers rehabilitation, and death benefits.
Each state has its own set of rules regarding workers comp, but one common theme is that the insurance will cover workers, whether or not there is negligence by the employer. The insurance will also often act to protect employers from lawsuits by workers who get injured while working for their employer.
States decide aspects such as what injuries are covered, how much entitlement an employee is eligible to, and how medical care will be provided.
IS BIGGER BETTER?
Well, the short answer is no, not if they’re not on our list, but these are the Worker’s Compensation insurers who took the most in insurance premiums last year according to NAIC figures.
|Company||Direct Premiums Written ($m)||Market Share %|
|BCBS of Michigan||1,745||3.11|
Despite the global Coronavirus pandemic’s huge effect on the economy, worker’s compensation insurance providers are facing a very profitable 2020 as the drop in claims has substantially outpaced the drop in premium revenue. Worker’s compensation has been the most profitable commercial line for providers over the last five years according to Fitch. COVID-related claims have amounted to 7.4% of paid out claims as of November. The current surge in profitability is now causing price competition among insurers, causing the market to soften as businesses stop buying insurance for laid – off workers.
‘There are several companies still offering commission incentives on smaller or lighter (office type) risks to get that business in the door,’ one broker told our research team.
The worker’s compensation market in the US is currently $56.4 billion – having grown from $42 billion in 2010.
WHAT’S IMPORTANT WHEN CHOOSING A WORKERS COMPENSATION INSURANCE POLICY
Worker’s compensation is an essential cover for businesses, but when choosing a policy, what are the most important features for brokers?
It’s all about the claims
Our research showed a clear winner being the importance of claims processing when choosing insurance options for clients. 91.5% of surveyed brokers rated the claims experience as being important or extremely important when considering a policy. Carriers like Safety National were recognized a number of times for speed of processing and reimbursement, while Canadian owned The Zenith also was talked about in glowing terms.
I know what I’m doing!
If claims handling is number one in importance, underwriting expertise is a very close second. 87.7% of brokers said that underwriting expertise was most, or very, important.
Show me the money
And in third place? Despite the focus on price in so many types of insurance, competitive pricing lagged our top two, with 85.4% saying that they though this factor was most, or very important.
They’re easy to do business with
Without doubt, one of the most important factors that our researchers heard time after time, was how easy a worker’s compensation insurance provider was to deal with. When we asked respondents an open ended question as to why they had nominated the insurer they did, it was customer service and ease of business that shone through. “The QBE team have helped my clients time and time again. They are experienced, trusted and provide great service” said one broker. “I put our preference with carriers who are easy to work with, strong communication, customer focus and responsiveness” said another.
That key connection between insurer and broker makes or breaks whether a policy is right for a client. A good connection means that brokers can get the information they need for their clients and handle that clients requests and claims efficiently.
When asked how a certain carrier provides the best customer service, one broker simply responded: “They’re just easy to do business with.”
HOW WE CHOOSE THE BEST
‘Market leading’ is a phrase many insurance companies like to use when describing their products. Now, 25 companies can claim that title on the back of hard market research from the people that matter most.
To select the 2021 Best Workers Compensation Insurance Providers, IBA enlisted the expertise of the industry’s top experts. Throughout a 15-week process, our research team conducted one-on-one interviews with specialist brokers and surveyed thousands more within IBA’s network to gain a keen understanding of what insurance professionals think of current market offerings. Brokers were first quizzed on what features they thought were most important in worker’s compensation policies, and then asked how the insurance providers they dealt with rated on those attributes.
Carriers were measured on the strength of their relationships with brokers, ability to handle claims, underwriting expertise and, most importantly, the strength of the individual products they provide.