Specialty Comp CEO, $200 Million ‘Record Year’

“We’re a one-trick pony. What we write is workers’ compensation, and it’s a very good trick and we’re doing it very well,” Math told Insurance Business. increase.

“We have the best underwriters in the industry and are able to tackle difficult accounts, price them right and underwrite them effectively. is needed.”

read more: IBA 5-Star Program Manager 2022 – SPECIALTY COMP INSURANCE SOLUTIONS

The business is no longer “closed” and, in addition to building long-term relationships, it has made a “conscious effort” to spread its name online this year through digital content, the CEO said. So is social media sharing.

“Who would have thought 30 years ago that social media would be a highly effective platform for getting your name out there and engaging with your customers? said Math.

While other lines have tightened, worker compensation has remained in what many might call a soft market and interest rates have remained relatively stable.

“The reason we are seeing price increases in other business units other than workers compensation is that we need to make that business unit profitable. We don’t need to strangle ourselves with lower rates of suicide or harm because of the condition,” said Math.

“The industry as a whole is still very profitable, so while wage levels are soft in terms of worker compensation, performance is solid and I doubt it will really weaken in the next few years.”

According to Math, profitable growth isn’t just about delivering results for MGA, but also for insurers through fraud reduction and safety initiatives.

Mathematics may have been confident his business would continue to thrive, but he had a word of caution that some companies might find themselves in a more precarious position.

“Companies that don’t know what they’re doing will go from profitable to non-profitable. Companies that rely on cash flow underwriting and investment returns, and account by account , or companies that are willing to ignore some of the early warning signs within the industry, difficult times lie ahead for these companies,” said Math. .

“But we think that being the best breed in worker compensation in the top 50th and 25th percentiles will continue to find ample opportunities to generate profitable business results.”

One niche that has proven to be a success story for Specialty Comp is staffing agencies that provide skilled workers, fueled by some employers’ post-COVID approach.

“Post-COVID, many businesses have opted to engage staffing agencies that provide a skilled workforce rather than rehiring workers,” said Math.

“We are very much in the staffing niche, and I have written some staffing companies that have grown significantly after the COVID rebound hit, and those staffing companies have grown significantly, so we have been very successful. is being collected.”

Staffing may have proven a successful business, but one area that continues to plague workers’ insurers is the gig economy. As of last August, 16% of Americans had made money through gig economy platforms at some point, according to a Pew Research Center study.

“It is very important to understand when gig workers are doing real work that is paid during working hours and when they are off working hours and are eligible or ineligible for worker compensation benefits. It’s difficult,” said Math. .

“This is the curveball the gig economy has brought to the workers compensation industry, and how the industry solves it remains to be seen.”

read more: Executive Insights Report: Workers’ Comp Insights 2021

For decades, worker compensation fraud was estimated at $7 billion annually, but a recent report by the Coalition against Insurance Fraud pegs it at about $34 billion annually. Of this, $9 billion is due to employee fraud and $25 billion is due to employer fraud, according to the coalition’s Workers Compensation Task Force.

Employer fraud can allow companies to hide or misrepresent salaries and take advantage of the “gray area” of whether an employee is an employee or a contractor.

However, what Specialty Comp sees more is employee misclassification. For example, a roofer could be classified as an office worker.

“Over the course of my career, I have seen a lot. [employees in clerical positions] Falling off the roof doesn’t make much sense to me,” Math said.

Commenting on how frontline agents and brokers can help combat worker comp fraud, Math said: Agents may see themselves as advocates for their clients, but agents are really an extension of the insurance company.

“So they owe the insurer the right amount of due diligence and representation. [must make sure they are] Collect all correct information and report accurately. “

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