Second Quarter 2016
Maybe it’s just me, but things are definitely heating up this summer. And I’m not talking summer weather – though it’s definitely been a scorcher throughout much of the country recently. I’m talking about United Heartland and our blazing success so far in 2016. Here are just a few of the hot numbers I’m thrilled to report as of May 31:
- With our top line focus, we’re up 17.5% compared to 2015 due to record-setting new business and higher retention success. (To see the wide range of new business UH currently writes, don’t forget to check out our new business highlights webpage. Look for second-quarter highlights by the end of July.)
- Our policy retention is at 90.2% and premium retention is at 88.5%.
- Our quote-to-sell ratio is up 27%, which means we’re quoting more of the business you’re submitting to us!
- Our calendar year total incurred loss ratio remains very solid and is performing 9.1 percentage points better than plan.
That’s not all that’s heating up. I know our underwriters are working feverishly with many of you to write and retain as much new and renewal business as possible with us before the big 7/1 arrives. We’re pleased with the new business and retention results we’ve seen for June thus far and anticipate similar excellent results for July, which is always one of our strongest months.
Three other hot spots for us:
- Texas: We’ve written more than $1 million in new business and have appointed 24 agencies in the state with an eye on adding 10 more soon.
- Florida: We’re ahead of plan on our new business premium goal for the state.
- Milwaukee: We anticipate that by July 1, we’ll have surpassed our new business goal for the entire year – an excellent result!
United Heartland is able to achieve these results because of the support and backing of our agency partners. It’s also why we value the feedback we receive not just throughout the year, but at events, such as our recent agency council meetings. It’s what helps us shape our strategies for growth, understand how to effectively retain profitable accounts and identify distressed business that can benefit from our distinctive approach. I am confident that with your help we will build on the momentum we’ve established and finish 2016 as strong as we’ve started it.
Vice President, Field Operations
In last quarter’s UH Pulse, TIS Insurance Services was recognized as United Heartland’s 2015 Agency of the Year . This quarter, UH is recognizing three high-performing agencies in our other regions — Chicago, Kansas City and Milwaukee. (TIS is based in the Charlotte region.) These agencies align with United Heartland’s high-touch customer service approach to workers’ compensation and are valued partners with our organization. We are honored to recognize them as our 2015 Regional Agencies of the Year.
Chicago Region Agency of the Year: Horton Group – Orland Park office
2015 Written Premium Growth: 42% increase from 2014
2015 Premium Retention: 100%
2015 Calendar Year Loss Ratio: 26%
Comments on Horton Group (Orland Park) from Regional Director Steve Zajc: The Chicago region has seen increased growth and profitability from Horton Group’s Orland Park office for the last two years. Written premium growth was 73% from 2013 to 2014 and 42% from 2014 to 2015. Over those two years, Horton wrote more than $500,000 in new business with a 50% hit ratio and had 100% retention. They’ve also developed a very profitable book of business for us with calendar loss ratios of 19% in 2014 and 26% in 2015. Horton’s Client Executive Ed Young, the carrier liaison with United Heartland, is a huge supporter of our organization and consistently touts the services of UH with other Horton producers.
Kansas City Region Agency of the Year: Lockton – Kansas City
2015 Written Premium: $3.25 million (64% increase over 2014)
2015 Premium Retention: 100%
2015 Loss Ratio: 35.7%
Comments on Lockton (Kansas City) from Regional Director Adam Gildemeister:
Lockton’s Jeff Holthaus and his health care team have been a valued and trusted partner for UH. They always deliver on their promises and know how to have fun along the way, which is refreshing. We have also started building a nice relationship with Jim Collins and his Enterprise team, where we anticipate some great opportunities (and more fun!). Lockton is a great partner for UH and we are looking forward to an outstanding 2016 with them.
Milwaukee Region Agency of the Year: M3 Insurance
2015 Written Premium: $8.8 million with $2 million written as new business
2015 Calendar Year Loss Ratio: 43%
2015 Hit Ratio: 50%
Comments on M3 Insurance from Regional Director Tracy Bain: M3 Insurance sells the United Heartland Difference, which is communicated directly from their leadership. Their production teams, along with their internal claims and loss control teams, sell this marketplace differentiator to their customers. M3 is a true partner with United Heartland when it comes to writing and retaining business, and they utilize our data metrics to demonstrate savings to clients and prospective customers. M3 has been working with Danielle McCollister, director of UH’s Customer Experience and Strategic Operations, to sell the advantage of our patented Care Analytics® tool to their current and prospective customers.
Strong Performance to Start 2016: The Chicago region, which covers Illinois, Indiana and the eastern half of Iowa, has continued to produce strong results during the past 12 months. In-force premium for the region through May 31 stands just shy of $63 million. Other regional highlights as of May 31 include:
- 89.5% premium retention
- $6.57 million in new business, including $1.39 million in Indiana where we are pursuing additional growth
- Written more than $1.3 million in new business with agencies appointed since January 2015. This represents 20% of our new business total and will remain a top priority for us for the rest of 2016.
- 28.4% accident year loss ratio
- 5% premium growth
The region also continues to experience success across all business segments with health care, social services and manufacturing remaining the top performing segments.
First Business Development Consultant in Indiana: Showing our commitment to grow in this state, Regional Director of Business Development Steve Zajc is pleased to announce the recent hiring of Scott Lerew as a business development consultant in Indiana, United Heartland’s first there. “Scott has worked this market for 10 years and has made a name for himself in the Indianapolis area and throughout the state,” Zajc said. “We’ve already received a great deal of positive feedback from our agencies about this move, especially as this gives us a strong presence in the state and will allow us to improve our relationships with many of our secondary agency partners. Scott’s background is in writing business very similar to United Heartland’s and in building lasting customer relationships, so we believe he’ll be an ideal fit for the region.” Scott will be based in Fishers, Ind., just outside of Indianapolis.
When a workplace injury occurs, finding prompt and proper care for the injured worker is top priority. That’s why AF Group created a new mobile app — AF CompAdvisor — which makes it simple to find a nearby physician who specializes in workplace injuries.
Utilizing our patented, award-winning Care Analytics® technology, we’ve developed a database of physicians most knowledgeable in occupational medicine and loaded them into our mobile app. This means that with a few simple clicks on a mobile device, our customers can provide their injured employee with a list of nearby doctors who can best treat their injury.
We encourage you to share this information with your United Heartland customers and strongly recommend that key contacts within their business (e.g., Loss Control manager, Human Resources director, etc.) download the app today. This ensures they’ll be ready should an unfortunate accident occur — and can rest assured that their employee is being taken care of by a highly qualified workers’ compensation provider in the area.
Download our informative flyer, which should be shared with your UH customers. Questions or assistance with downloading the app can be directed to 866-206-5851.
Please note: Because of rules surrounding the sharing of provider lists in Georgia, Tennessee and Virginia and limited access to data in Florida, those states are currently not supported by the app. AF CompAdvisor provides occupational physician information for the following states: Arkansas, Iowa, Illinois, Indiana, Kansas, Maryland, Michigan, Minnesota, Missouri, Mississippi, North Carolina, Nebraska, South Carolina, Texas and Wisconsin. When the app supports additional states, United Heartland will notify you and your customers.
United Heartland was once again named to the Milwaukee Journal Sentinel’s 2016 Top Workplaces list for midsize companies. The organization was one of 150 selected in April as a “Best Place to Work” in southeastern Wisconsin. The program evaluation is based upon survey feedback from United Heartland employees, so it’s great to see how much the United Heartland staff values their workplace. It also demonstrates the importance of having a workplace culture that encourages professional growth and excellence while maintaining an atmosphere of fun and camaraderie. This is the sixth consecutive time that United Heartland has received this honor.
“We are honored to receive this prestigious award for a sixth consecutive year,” said Steve Cooper, president of United Heartland. “Our first-in-class customer service is our highest priority and a top work environment helps United Heartland employees provide service that separates us from the competition. We care deeply about our employees, customers, and agents and this care is evident through our high-touch service model and our knowledgeable employees who enable us to distinguish ourselves by delivering on the promises we make. The result is highly satisfied customers and agents.”
We are pleased to announce the appointment of two key leaders in our organization. First, Lisa Corless has been named president of AF Group, replacing Liz Haar who now serves as executive vice president and president of Emerging Markets for Blue Cross Blue Shield of Michigan while continuing to serve as CEO of AF Group. Lisa has held a number of key roles since joining AF Group in 2013, including senior vice president, chief administration officer and chief of staff.
Secondly, Bryan Bogardus has been named executive vice president and chief operating officer of AF Group. In addition to his extensive experience in the industry, Bryan has served as president of our CompWest brand, leading it through a successful turnaround in the challenging California workers’ compensation market.
It’s important that you and your customers are aware of loss control information that could help them improve their safety protocols or prepare for new regulations. Below are links to recent Risk Connections that your customers may have interest in:
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.
Legislation was recently introduced in the U.S. Senate that would tax prescription opioid drugs to provide funding for substance abuse treatment, a move that would create additional costs in workers’ compensation, where opioids are a highly used class of medication. The bill, Budgeting for Opioid Addiction Treatment Act, or LifeBOAT, would tax prescription opioids at a rate of $.01 per milligram of active ingredient.
The bill is expected to generate $1.5 billion to $2 billion a year. The California Workers’ Compensation Institute recently reported that 27.2% of prescriptions dispensed to injured workers in the state were opioids in 2014, down from 31.8% in 2008.
The House Financial Services Committee approved a bill that would give Congress a greater ability to rein in the Treasury Department and Federal Reserve as the agencies negotiate new capital standards for the insurance industry. The bill’s supporters, including a number of insurance industry trade groups concerned about higher capital standards, argue the proposal will help shield state-based regulations, which are the primary means of oversight for insurers. In addition, the bill would give the Financial Stability Oversight Council’s independent insurance expert the ability to play a bigger role in international insurance discussions. The bill faces an uphill battle in the Senate. Still, it could apply political pressure on the Federal Reserve and Treasury as they negotiate with foreign officials.
Florida Supreme Court issued its opinion in the case of Bradley Westphal vs. City of St. Petersburg, and invalidated on constitutional grounds the statutory 104-week limitation on temporary total disability (TTD) benefits because workers’ compensation claimants who have not reached maximum medical improvement (MMI) after 104 weeks are not yet entitled to permanent total disability (PTD) benefits. The court held that the TTD limitation violates a claimant’s right of access to courts under the Florida Constitution because it results in an indefinite gap in benefits “at a critical time when the worker cannot return to work and is totally disabled, but may still continue to medically improve.” In lieu of declaring the entire workers’ compensation system invalid, the court revived the pre-1994 TTD limitation of 260 weeks, which it held to be constitutional in a 1991 case. National Council on Compensation Insurance (NCCI) recently filed an increase in administered rates of 17% prior to the announcement of this legal decision. AF Group expects to see NCCI amend their current filing for an additional rate increase, but don’t yet know the amount of the potential increase.
The Illinois General Assembly ended the regular 2016 session without a budget for Fiscal Year (FY) 2016 or FY 2017 (FY 2016 ends June 30). The House is scheduling at least one day a week in June to return to Springfield. Of significance to AF Group are the bipartisan negotiating work groups that continue to meet in an effort to address Gov. Bruce Rauner’s economic development effort to enact workers’ compensation reform. The “working groups” will be meeting whether the General Assembly is meeting in Springfield or not. While no significant progress has been made on workers’ compensation, discussions on key issues, such as causation, traveling employee, credits for prior body as a whole injuries, AMA guidelines and the medical fee schedule are continuing. The goal is for the group to develop an “agreed bill” that will reduce work comp system friction and costs, and improve care for injured workers. Progress remains slow and the groups are having difficulty finding common ground. AF Group remains engaged through partnerships with the Illinois Insurance Association and the Illinois Chamber.
This was a relatively quiet year for insurance issues. The industry benefitted from a short 11-week legislative session. Due to divided government, with Democrats in control of the Senate and Republicans controlling the House, controversial bills did not make it out of committee. 2016 is an election year for the House and Senate, so the industry will have to monitor if control in either legislative body changes. Before being submitted to the Legislature, all workers’ comp bills must be approved by the Workers’ Compensation Advisory Council; composed equally of labor and management representatives. The Workers’ Compensation Advisory Council Bill, H.F. 2478 was non-controversial this year. The bill generated was technical in nature and nowhere near as controversial as last year’s enacted hospital fee schedule.
Commissioner of Insurance Ted Nickel officially announced the appointment of J.P. Wieske as Deputy Insurance Commissioner for the Wisconsin Insurance Department. Wieske succeeds Dan Schwartzer who recently left his post as deputy commissioner to work full-time as Special Deputy Commissioner for the Ambac rehabilitation. Wieske previously served as OCI’s Legislative Liaison and Public Information Officer since October 2011. The industry looks forward to working with Mr. Wieske in his new capacity.
Sources: American Insurance Association, MIRS, Politico, Wisconsin Insurance Alliance
Disclaimer of Liability
This document is provided for informational purposes only and does not constitute legal advice. This information is subject to change. Every effort is made to provide accurate and complete information in AF Group’s Legislative Update. However, AF Group makes no claims, promises or guarantees about the accuracy, completeness, or adequacy of the contents of the Update and expressly disclaims liability for errors and omissions in the contents of this newsletter.
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