Opening the Door to Zurich s Professional Employer Organization Insurance Program: How to Write PEO Business

Transcription

1 Opening the Door to Zurich s Professional Employer Organization Insurance Program: How to Write PEO Business ZProgramsMatch Webinar Series August 17, 2010

2 Agenda PEO Program Specialists Program Introduction Industry Drivers and Market Trends Understanding PEOs Program Overview and Benefits ZProgramsMatch.com Questions and Answers Contacts and Resources 8/2010 2

3 PEO Program Specialist Andy Atsaves, Program Manager and Sr. Vice President for Program Administrator Program manager and Sr. Vice President responsible for PEO program business Formerly Managing Director of the Holsman Companies, a Washington, DC based investment company Served in management capacity in asset management, land acquisition, training and financial analysis for Lincoln Property Company/Fore Division, one of the nation s largest private real estate holding companies Master of Business Administration, Finance, Pepperdine University; Bachelor of Science, Business Administration, Lynchburg College Former member of the Board of Directors of the National Association of Professional Employer Organizations 8/2010 3

4 Workers Compensation Program Specialist Mike Muehling, Vice President for Zurich (P&DM) Responsible for management of the Workers Compensation program business within P&DM Joined Zurich May, 2000 as Program Director Prior to Zurich, served as Director for program business associated with the Sports and Leisure industry with the Ace Group Other industry positions include Regional Underwriting Director for CIGNA and other underwriting management positions Bachelor's degree from Heidelberg College and has earned earned both the CPCU and ARM designations 8/2010 4

5 Program Introduction Professional Employer Organization (PEO) Responsible for the business of employment PEO assumes aspects of employer/employee relationship PEOs provide the following to their clients: Payroll Management/Tax Filings Workers Compensation Risk Management Access to Fortune 500-type benefits & administration HR information systems and management expertise Unemployment Management 401K/Retirement Plans Labor Law In a co-employment environment 8/2010 5

6 Industry Drivers Emerged in mid-1980s as result of increasing regulation Trend to outsource and focus on core revenue generating activities Need to provide competitive benefits package to attract and retain employees Increasing costs associated with health and workers compensation insurance coverage, employeerelated complaints and litigation PEOs emerge as providers of a more comprehensive range of services 8/2010 6

7 Market Trends PEO industry is maturing, becoming mainstream, still in early stages Harvard Business Review recognized PEOs as "the fastest growing business service in the United States during the 1990s" 34 states now have statutes and/or regulation on books requiring licensure and/or registration of PEOs (with codification comes industry stability) PEOs typically target small to medium sized businesses NAPEO* estimates: 700 PEOs operating nationwide Average size of business using PEO services has 19 employees Industry revenues at $68 Billion in million employees are co-employed through PEOs * NAPEO estimates as of /2010 7

8 Understanding PEOs Are PEOs gaming the workers compensation system with mod swapping and misclassification? Malfeasance in PEO industry, convictions Increased regulation becoming more mainstream Agents find PEOs attractive as long term customer Transparency, open disclosure has led to longevity Are PEOs unattractive due to heterogeneous nature of clients? PEOs can be unwieldy, administration doesn t have to be complex Adding/deleting clients easily managed 8/2010 8

9 Understanding PEOs Do underwriters value PEO risk management abilities? Some don t know how to manage, select risk Many are excellent at risk selection, management Some PEO risk management departments rival insurance companies in risk management acumen Are PEOs same as temporary services firms? Both co-employ workers as a special employer PEOs typically manage entire workforce of business, temporary services firms provide labor for a period of time 8/2010 9

10 Program Overview and Benefits Zurich is a recognized leader in the PEO insurance industry. Access available only through Program Administrator (PA). PA has 15 years experience underwriting/ managing PEO workers compensation, issued ~10,000 PEO policies in PEOs are administratively intensive for agents and carriers; leveraging technology and PEO industry knowledge are critical factors for success. PA has a robust, proprietary on-line system that allows PEOs and their agents to easily manage addition of new clients into the program and manage certificates of insurance in a 24/7 on-line environment. 8/

11 Program Overview and Benefits Full spectrum of risk management alternatives, from guaranteed cost to various loss sensitive structures, including retros, large deductibles, and captives. Program designed to meet needs of growing PEOs, whether early stage companies or larger mature organizations. Zurich s stability in the market place, intense commitment to industry, our clients and agents actively involved in legislative and regulatory issues in the PEO industry. 8/

12 Program Preferred Characteristics Middle Market PEO Program Accounts typically written on a guaranteed cost basis or with a small deductible. Larger accounts can be written on an incurred loss retro in state where filings support. Accounts greater than $75,000 White- to gray-collar exposures including light industrial/manufacturing and some artisan contractors Solid management team with proven expertise in PEO industry and a discernable commitment to underwriting and safety Ability to accurately and clearly describe underlying client company exposures Transparent, tangible loss history and credible financial history. 8/

13 Program Preferred Characteristics Large Risk PEO Program Accounts written on various loss sensitive formats, including incurred loss retro, large deductible and, in some cases, deductible buy-back plans. Accounts greater than $1,000,000 Minimum retention is $250,000 Entertain broad array of classes Eligible class codes range from white collar to blue collar risks. Need to have balanced book of business and adequate spread of risk Accounts heavily weighted in construction or transportation typically declined 3 years of audited financial statements showing strong performance Solid management team with proven expertise in PEO industry ESAC Certification and/or have achieved Certification for Workers Compensation Best Practices by the Certification Institute Demonstrable risk management acumen in risk selection and loss control Ability to accurately and clearly describe underlying client company exposures. Transparent tangible loss history. 8/

14 ZProgramsMatch.com A quick, online registration is required for access to ZProgramsMatch. If you are not yet registered for access, just go to ZProgramsMatch.com and click on Register. 8/

15 ZProgramsMatch.com Submitting a request to a Zurich Program Administrator or General Agent through ZProgramsMatch.com is easy! Begin at the Home Page Directory and click on the program you are interested in. 8/

16 ZProgramsMatch.com You will land on the program page. For more about the program, or to submit a risk, click on Request Contact. 8/

17 Past Webinars Make sure to check out past versions of ZProgramsMatch Webinars Boat Dealer/Marina Environmental Transport Golf and Country Club Lawyers Professional Liability Roofing Contractors Service Stations US Longshore & Harbor Workers Compensation 8/

18 Upcoming Webinar Travel Agent and Tour Operator Program DATE: Wednesday, September 22nd TIME: 11:00 AM Central Daylight Time 8/

19 Questions 8/

20 Contacts and Resources Visit For general inquiries or feedback about the ZProgramsMatch site, contact us at: Please do not utilize this box for business submissions. 8/

21 Thank you for attending! 8/

22 Disclaimers This is intended as a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America. The policy is the contract that specifically and fully describes the coverage. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy. Insurance coverages underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company. Certain coverages are not available in all states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers. Risk engineering services are provided by Zurich Services Corporation. 8/