Fourth Quarter 2016
Earlier this year in the first quarter UH Pulse, I wrote: “If the start to 2016 is any indication, I can’t wait to see what the rest of the year brings.” United Heartland had just come off record-setting new business amounts in January and March, record-setting premium retention for January and February and the best and fastest start to a year in our history from a top-line perspective with approximately $20 million in new business and year-to-date (YTD) retention of 90.8%.
So what has the rest of 2016 brought us? Continued impressive results:
- We’ve written $68.4 million in new business YTD — a 45% increase over last year at this time — with a forecast to finish the year close to $73 million!
- We’ve welcomed 261 new customers to United Heartland. These customers had experience modification factors ranging from 2.98 to 0.48 – showing that not only is United Heartland committed to writing your tougher risks, but that we can be competitive on accounts with attractive risk characteristics as well.
- We are forecast to end the year with $293 million in direct written premium, a 17% increase from 2015’s $251 million!
- We’ve achieved premium retention of 88.3% YTD (a five-point increase from last year) and policy retention of 89%. Maintaining this high-level of retention will continue to be a top priority for us in the coming year and beyond – and it should be for you too since it means that your book of business will remain stable as well.
- We’ve seen submissions up nearly 10% from last year so you’ve helped keep the flow coming strongly even amid an increasingly soft market.
- We’ve grown the top line while maintaining a keen focus on profitability and underwriting discipline, which has helped us forecast to end the year with a 90.8% combined ratio.
- We’ve seen our Risk Management Services team surpass their annual goal and write $17.5 million in new business through November.
Simply put, when you consider United Heartland’s new business growth trajectory, our customer retention and our combined ratio, we’ve had one of the best years in our 25-year history! To achieve this level of success after a quarter of a century in business is a testament not only to the strength of our high-touch customer service model, but also our ability to identify and partner with agents who support our approach to workers’ compensation.
I know many of you are busy finishing up your 1/1 submissions to take advantage of our 10% new business commission incentive. We’ve been pleased to see the response this has had and may pursue similar initiatives in the future.
As we approach the new year, my biggest hope is that in 2017, you truly see United Heartland as your one-stop solution for all things work comp. You know that UH has the expertise to handle your large to mid-size accounts in our core segments and even accounts down to $50,000, particularly in the areas of health care, long-term care and nonprofits. You know that UH has the commitment to handle your distressed accounts who need the collaboration we can provide to get back on the right track. You know that UH’s Risk Management Services team provides you a high-quality alternative for those accounts needing loss-sensitive solutions. But don’t forget that United Heartland also can provide you solutions through our AF Group brand counterparts. Whether it be small business, a niche account or simply an account located in another state, let us prove to you that we can deliver the work comp results you need with the service you expect.
I wish all of you a safe and peaceful holiday season and look forward to growing with you next year!
Vice President, Field Operations
New Business Success Key to Growth: Milwaukee Regional Director Tracy Bain says there’s much to celebrate in the Milwaukee region for 2016, especially since the region has surpassed more than $100 million in written premium year-to-date from both guaranteed cost and loss sensitive accounts. Bain says this success shows the turnaround that the region began to experience in 2015 is not an anomaly. Here are a few of the region’s impressive numbers:
- Written $13.1 million in guaranteed cost new business year-to-date, up from $8.3 million last year – a nearly 60% increase! The region, which hit its new business goal in July, is projected to hit $14 million by year’s end.
- Wrote four new loss sensitive accounts through Risk Management Services totaling $10.3 million, more than doubling the premium that was written last year for this type of account.
- Achieved 90% retention YTD, up from 81% at the same time last year.
- Achieved a 49% hit to quote ratio and a 33% quote to submit ratio YTD.
- Posted an accident year loss ratio of 39% YTD, compared to 48% in 2015 and 68% in 2014.
- Minnesota in particular has shown significant growth having accounted for $5 million in written premium YTD, which is a 233% increase from 2015’s $1.5 million in written premium. Bain says despite the small agency base for the state, submissions have been strong, increasing 36% from last year.
Serving All of Our Agencies’ Business Needs: Bain says she’s excited to see that agents are picking up on the message that United Heartland can be their one-stop solution for workers’ compensation business. “United Heartland can handle mid-market accounts, distressed accounts and larger loss-sensitive accounts and then refer small business accounts to our brand counterparts at Accident Fund,” Bain explains. “We truly deliver a high-quality work comp product at every account level.”
A new effort in the region, called “Fishing Fridays,” encourages underwriters to take a few hours and follow up on accounts that were lost as new business or at renewal and see if we can earn that business back. Bain says this has resulted in UH writing accounts in our education, health care and manufacturing segments that previously left UH and who cited our strong claims management and loss control services as factors in their return. It’s also helped to increase visibility with the agency base.
Here’s a sample of what the Milwaukee region has recently written:
- $950,000 health care account with 1.48 experience mod
- $900,000 public school district with 0.82 experience mod
- $250,000 manufacturer with 1.23 experience mod
To see what’s been written recently throughout the organization, click here.
Supporting Our Partners: The Milwaukee region continues to be focused on helping our agent partners find success too. We’ve done this through:
- Training: This includes training of new producers, business segment-specific training and side-by-side shadowing of our claims and loss control representatives.
- Retention: Our mid-term reviews for larger accounts have been instrumental in boosting retention rates for us and our agent partners.
- Profit Sharing: As the quality of the book of business has improved for the Milwaukee region, so too has its profitability. Like last year, many agencies will earn profit sharing in the six figures with several of our new agencies getting to experience our generous program for the first time.
- Agency Claim Advisory Council: This new council brought together claim advocates from our region in November to discuss what we’re doing right and what we could be doing better during the claims process for our customers. Learn more here.
At United Heartland, we understand the value of collaborating with you, our agency partners, to produce better mutual results for each other as well as deliver positive outcomes for our customers. One way we strengthen our agency partnerships is by holding our Agent Advisory Councils in the spring and our United Heartland National Council (UHNC), which recently took place in September. We’re also excited to announce the successful launch of our first Agency Claim Advisory Council on Nov. 10 in the Milwaukee region with plans to expand this particular concept to other regions in the future. We hope these councils will help us gain your feedback and insight and ensure we’re delivering the high-touch customer service that you and your customers seek.
Agency Claim Advisory Council
For our inaugural Agency Claim Advisory Council, United Heartland invited 10 claim advocates from key agency partners in Wisconsin and Minnesota to provide their valuable feedback on what UH does well and what UH could do better in terms of claim service. Vice President of Claims Rick Hobbs outlined the goal of the session at the outset: “We don’t just want to make United Heartland Claims better; we want to be the very best. We must show clear value to all of our agency partners and more importantly, our mutual policyholder customers.”
During the session, the consistent theme from the agency advocates was that UH’s greatest advantage is the relationships that United Heartland’s Claims team develops with policyholders. The advocates said UH’s claim representatives do an excellent job of communicating with policyholders so that the customers feel UH is part of their team and working together toward the same positive outcome. Additionally, the advocates appreciated how when the UH Claims team says they’re going to put an individualized plan in place, that they actually follow through on their promise and see it through to completion.
Following the session, United Heartland received a lot of positive feedback from attendees. Angela Wheeler of Marsh & McLennan wrote: “It was such a great experience to have an opportunity to discuss openly and freely what we are seeing on the agency side and how we can better partner together. I learned so much about United Heartland and am excited about our partnership and working together in the future. Your approach today, in which you took time to listen, really proves you understand the value of our relationship and most importantly the value of the claims experience.”
Based on the success of this inaugural event, United Heartland plans to have more councils in other regions with the hopes of strengthening agency partnerships there as well as attracting and retaining more customers. If your agency would be interested in participating in this type of event, please contact your claims representative.
United Heartland National Council
At the UHNC, we bring together principals from a handful of our top-performing agencies and seek their candid feedback on our strategies, industry trends and any other top-of-mind issues. Our council members were very supportive of the strategies we have planned for 2017.
We discussed several topics, including:
- The efficiency of placing business with United Heartland and the other AF Group brands.
- How to better communicate the value of UH being a monoline carrier.
- How can UH help agencies better train their young producers, not only on technical skills but UH’s value proposition (Care Analytics®, high-touch service, in-house physician processes, claims management and loss control best practices).
- The new UH Difference for Prospects marketing pieces, which allow us to show prospective customers, as well as those customers we may have lost that we’d like to get back, how their experience modification factor may have been different had they stayed with UH.
- The potential for more collateral flexibility with our Risk Management Services policies.
We appreciate the insight provided by our national council members and look forward to sharing more about these issues soon.
Think slips and falls during the winter aren’t that big of a deal? Consider this: for United Heartland policy years from 2010 to 2014, the average total incurred claim cost for falls on snow or ice was $11,511! That’s a considerable cost for any employer to absorb and illustrates why it’s so crucial to promote the United Heartland WalkSafe campaign. Available throughout the winter season, you’ll find valuable information and tips on a wide range of safety topics over the course of the winter, including:
- How to prepare for winter weather
- Winter weather advisories and employee communication systems
- Snow and ice removal programs
- Safe vehicle operation and work off-site
- Salting and surface treatments
- The importance of proper footwear
- The value of strong housekeeping practices
- How to avoid falls from elevations
This year, we’ve also added some humor to the campaign with short videos that can be shared with your employees. Each one provides a simple tip on how to avoid slips and falls during this winter season and refers back to our WalkSafe resources. These can be viewed here.
We’re excited to be able to provide guidance on this subject since slips, trips and falls are more prevalent during the winter months. Visit UnitedHeartland.com for more information, and if you or your customers haven’t already, please subscribe to our Risk Connection e-blasts, which provide important information related to WalkSafe as well.
We’re proud to announce that AF Group – which includes United Heartland and our three related brands (Accident Fund, CompWest and Third Coast Underwriters) – has been named to Business Insurance magazine’s list of Best Places to Work in Insurance for 2016.
“We are pleased that for the sixth year in a row, our organization has been recognized by Business Insurance as one of the best places to work in insurance,” said Lisa Corless, president of AF Group. “This repeated honor is a reflection of our amazing team and their efforts to build a fun, collaborative workplace culture — one that is focused on providing the best possible service to agents, policyholders, injured workers and each other.”
This year, AF Group earned second place in the large employer category (for the second year in a row) and first-place honors as an insurer/provider. In addition, AF Group improved its scores in seven of eight categories including:
- Leadership and Planning
- Corporate Culture and Communications
- Role Satisfaction
- Relationship with Supervisor
- Training, Development and Resources
- Pay and Benefits
- Overall Engagement
The prestigious Best Places to Work in Insurance program is a joint effort of Business Insurance and Best Companies Group. Its two-part assessment process recognizes companies that have created high-quality workplaces in which employees can thrive and enjoy doing so. We were excited to see several of United Heartland’s valued agent partners make the list as well. Congratulations to the following for their Best Places to Work recognition:
- Assurance Agency Ltd.
- CBIZ Benefits and Insurance Services
- Connor & Gallagher OneSource
- HNI Risk Services
- Holmes Murphy & Associates
- Hylant Group
- Insurance Office of America
- J. Smith Lanier & Co.
- Lockton Companies LLC
- Kapnick Insurance Group
- Lipscomb & Pitts Insurance LLC
- M3 Insurance
- TexCap Insurance
- Wallace Welch and Willingham
We are extremely proud to once again be considered among the Best Places to Work in Insurance and pleased to share this recognition with our agency partners.
Legislative Update is a brief synopsis of relevant legislative activity currently taking place in states where United Heartland does business. For more details or further documentation on any of these legislative activities, contact your underwriter or business development consultant.
Sen. McCain Seeks Cybersecurity Committee; Views Cyber Attacks as “Acts of War”
U.S. Senate Armed Services Committee (SASC) Chairman John McCain (R-AZ) mentioned he intends to establish a new cybersecurity subcommittee, which he hopes Sen. Lindsey Graham (R-SC) will chair. McCain believes recent cyber attacks — including alleged Russian hacks, acts of industrial espionage, and military capabilities that foreign states have been able to crack — need to be viewed as an “act of war”
These comments and actions highlight the rise of cybersecurity as an issue carrying more importance in Congress. While the armed services committees will likely have little impact on issues pertaining specifically to property-casualty insurance, they could facilitate change in U.S. government policy toward cybersecurity within the national security context that could create momentum for shifts in policy for commercial entities. As we learn details, we will be sure to pass along.
Court Upholds Time Limit for Filing Workers’ Compensation Claims
The Arkansas Supreme Court has handed down a decision that upholds the three-year time limit for filing an injury/sickness claim after exposure. The court went on to say it was bound by the law as written, and if there is a problem with that, “it lies at the feet of the General Assembly,” thus, virtually inviting the Arkansas legislature to change it. The Arkansas Chamber hailed the decision as a major victory for the exclusive remedy of the workers’ compensation system.
AIA Testifies in Support of Work Comp Reform Proposal
AF Group national trade partner, the American Insurance Association (AIA), testified in support of workers’ compensation reform proposal HB 4248 before the House Labor and Commerce Committee on Nov. 28. The Republican-sponsored legislation contains several important reform provisions including a study commission, a revised medical fee schedule and provisions for electronic claim filing. Although the industry supports these changes we noted additional improvements could be made to further their effect. No action was taken on the legislation. We expect the budget reform/workers’ compensation impasse between the governor and legislative leadership to continue indefinitely.
Court Order Voiding Workers’ Compensation Rate Increase is Stayed Pending Appellate Review
On Monday, Dec. 12, the Florida 1st District Court of Appeals granted the Emergency Motions for Stay filed by the National Council on Compensation Insurance (NCCI) and the Florida Office of Insurance Regulation (OIR). As a result, the circuit court order voiding OIR’s approval of the 14.5% workers’ compensation rate increase is stayed pending the appellate court’s review. The appeal will proceed on an expedited basis with NCCI and OIR filing their initial briefs on Jan. 11, 2017, and the plaintiff’s answer due Jan. 23. Final briefs (NCCI and OIR’s reply briefs) are due by Feb. 2.
Workers’ Compensation “Opt-Out” Bill to Be Introduced in Florida
On Dec. 7, newly-elected Florida Rep. Cord Byrd (R) circulated an unfiled “workers’ compensation reform” bill that he stated would “prevent job destroying rate increases” and “allow more choices for both employers and employees.” The bill would permit employers to either provide workers’ compensation coverage in compliance with the workers’ compensation system or be subject to suit in the tort system.
District Court Issues Favorable Work Comp Ruling in Air Ambulance Case
On Dec. 15, the Travis County District Court issued a very favorable air ambulance case decision. The court held that the federal airline deregulation act does not preempt the Texas workers’ compensation medical fee schedule and related workers’ compensation laws and regulatory provisions relating to payment of medical fees. In addition, the court held that reimbursement under the medical fee schedule should be at 125% of Medicare, not the 149% previously decreed by State Office of Administrative Hearings.
AF Group Anticipates Additional Opt-Out Initiatives in 2017
Although AF Group legislative opposition has been successful to date, we anticipate renewed 2017 challenges by proponents in Tennessee and other unknown states. Aside from individual state challenges, opt-out feeds into a negative narrative of the states capability to administer the workers’ compensation system and encourages an argument for federal standards or federal supervision of some kind. AF Group Government Affairs will continue to work with industry partners to oppose opt-out initiatives wherever they arise.