Reorientation to ReEmployAbility: Backing Brokers Edition Part 2
For part 2 of our Backing Brokers Edition of Reorientation, we’re going deeper to explore the current industry trends with Insurance Brokers. We continue with Todd Loomis, ReEmployAbility Sales Manager, Paul Haywood, and Roger McCreary of USI as we investigate the challenges and success of the broker industry.
We invite you to join us in a comprehensive discussion on current industry trends, effective strategies to tackle challenges, and the valuable role that ReEmployAbility plays in supporting your claims.
Todd Loomis, National Sales Manager, REA
Paul Haywood, Commercial Practice Leader, USI
Roger McCreary Midsouth Regional Claims Manager, USI
Part 2: Current Industry Trends for Insurance Brokers
*Responses are minimally modified for brevity and clarity.
What kind of changes are brokers seeing now regarding trends?
Roger McCreary: I can’t think of any carrier or TPA that doesn’t have a work-from-home program now. A lot of our interactions now are virtual, and managing that and building relationships virtually is a bit of a struggle at times.
For our clients, as with most of the industry, there have been staffing shortages that have led to different issues like it’s pushed up wages. They’re having to pay more for quality or experienced workers on the other end of that spectrum; they’re having to hire more inexperienced workers. Speaking of the claims business itself, there’s staffing shortages that we’ve seen with carriers and TPAs. I have a lot of sympathy and compassion for the claims adjusting industry right now because there’s a lot of claims reassignments, there’s reallocation of workloads, adjuster workloads have crept up significantly.
Paul Haywood: It was a struggle for survival through the pandemic… Our efforts were around helping them with the insurance programs, what levels could we pull to help them reduce costs and come alongside them. Since then, as things have rebounded, some of those very same companies are having record years.
Back to what Roger said, it’s the staffing shortages. It’s finding the talent, and then it’s the cost of that talent once they do identify and have the ability of opportunity to hire them.
When we just think about what I’ll call our “shaky economy,” that’s really a common thread throughout our recent market update. We did a midyear update to our 2023 market outlook. If you think about inflation, it’s going to impact claim costs, premiums, all other issues across all the insurance lines. As we’re looking at that, what everybody on this call understands as claim professionals, what you do is critically important for the organizations that you ultimately touch because the higher claim costs are increasing their TCOR, resulting in higher premium, experience mods, retained losses. We see across the board that our average TCOR is increasing rapidly for many organizations. When we think about it… claim costs make up 60 to 80% of that. [ReEmployAbility’s] work has a critical impact, not only making sure that on a comp claim that workers receive what they need to get through that difficult period, but it’s also controlling those costs and helping the clients as well through that time.
What strategies are you suggesting brokers implement to overcome some of these challenges?
Roger McCreary: Our clients, now more than ever, are keenly aware of the cost of their insurance programs. They are looking at things like larger deductible programs like unbundling their claim services and moving to TPAs. They’re talking about what’s a captive program and how does that affect my overall cost? All of those kinds of more sophisticated conversations we’re having more frequently now. It’s really interesting. It makes us feel like we’re really bringing value to the relationship when we can have those conversations and turn and bend to their loss history. When their claims are going like this, and you can help soften that a little bit or turn it around completely, that’s a good part of the job.
It’s not necessarily the large corporate entities with risk management departments that are making those kinds of inquiries to us now. It’s the middle market managers and business owners that are looking for alternatives and solutions to how they can get a better handle on that. I can’t tell you how many times we’ve talked to clients, and they know what their EOD number is and the specific claims that are driving it, and what can we do to help get those under control. We talked to them about the options in getting a claim resolved. But another part of that is around their loss control efforts and the training they’re doing, and their safety programs. We ask the carriers to participate in that. We have loss control and engineers at USI that work directly with our clients. It’s a pre-loss post-loss kind of conversation that needs to be had with these folks and they appreciate that. They seem to respond to us as well.
Paul Haywood: Yeah, I completely agree with what Roger just said. I mean, that is the key. All the things he was speaking to when we’re helping and providing those services to our clients really speaks of improving their quality of risk. I think back to your question about, as brokers, what are we doing? That’s key right now, working to improve the quality of the risk. Then, to differentiate that with the insurance markets. How we represent them to the insurance markets in helping them take control, put them in a better position to have a more favorable outcome on their renewals, also just in their options on how to structure and spend their risk dollars.
Are you seeing any trends or changes in workers’ behaviors concerning workers’ comp claims?
Roger McCreary: I can’t tell you that in talking with a lot of employers at claim reviews or stewardship meetings, those kinds of things, we do spend time talking about the return-to-work programs. I’ll give you a plug: ReEmployAbility comes up quite often as a very good partner with everyone, with clients, with brokers, with insurance carriers, and CPAs. But the focus on light-duty return-to-work with good solid job descriptions or job task lists, those kinds of things. Working with nurse case managers and getting people focused on returning to work it’s not necessarily an employee behavior, but it’s an employer behavior that I can say has changed over the last couple of years.
It’s funny because a lot of times, we’ll be sitting in a claim review, and we’re talking about light duty, and the employer can’t meet the job restrictions set out by the doctor. And we’ll ask the adjuster, “Is there an opportunity here for Temporary Transitional opportunity?” They’ll say, “Well yeah, we use ReEmployAbility.” It’s almost as if they hadn’t thought about it before until somebody suggests it. But once that light goes off, you guys are engaged, and we’ve had really good success with our clients with ReEmployAbility.
A growing trend in the brokerage industry is for companies to focus on humanizing the injured worker. This means recognizing that behind the claims and paperwork, there is a real person who has been through an unfortunate experience. As a result, companies are placing a greater emphasis on empathy, compassion, and a willingness to listen and understand. It is important for brokers to align their personal philosophy with the company they work for, as this will ensure that they are able to offer the best possible service to their clients. Ultimately, the goal is to provide injured workers with the support they need to recover and get back to their lives as soon as possible.
Is there anything else that brokers can use as a tool that identifies the (injured) worker as a human being?
Roger McCreary: Well, that’s a really good question. Again, the pandemic has had such an impact on things. Telemedicine has really taken on an increasing role where you’re not going to the doctor; you’re talking to them on your phone. That’s part of it. I really like the fact that a lot of carriers now have a nurse triage program so that when the employee is calling in to report their injury or whatever, they’re getting some kind of care. It’s over the phone, but someone is responding to their injury and giving them some immediate guidance as to, “Do you need to go to the emergency room?” Or, “Do you need to take the day off?” I like that. That seems to be a really growing trend. The humanizing part of it is very important. People are growing to expect that from their employer and from any vendor or associate that the employer might engage.
Paul Haywood: Add to that too, Roger, I think pre-pandemic, many, many employers looked at it that way. But there were some, perhaps, that didn’t have as great of an appreciation as they should have. I think the staffing shortages and those issues. Many more organizations understand when we’re explaining to them why we need to prevent these accidents from happening in the first place. Why we need to help them with their claims as they’re working through when they do have claims. And so, I think just the fact that they realize, “Wow, it’s really hard to find people, we do need to take care of them.” And that was, I’d say, predominant with most clients, but I haven’t seen anybody in a while who doesn’t have that opinion now.
So, putting people in control really means arming them with as much information as possible, right?
Paul Haywood: And setting strategy and directing. The right broker partner’s going to go to the marketplace and from a position of authority, having done the analytics, having done all the pre-work and say, “This is what needs to happen, and this is what the client’s already committed to.”
How are trends changing in the industry and how can somebody in your field be prepared for those things?
Roger McCreary: From a claim standpoint, I think technology is going to continue to be a huge factor in our future. I mean, we have some carriers now that you can take a photo of the damage to your car, submit that to their website, and they’ll cut a check, basically. I think those kinds of things. I have no idea what artificial intelligence is going to bring to this industry, but you would have to think there are some opportunities there for something like that to have a significant impact. In the short term, Paul can talk about some of the issues around placement and coverages and things like that. But from a claim standpoint, it is a thankless job at times. But the adjusters who do a really good job are starting to really stand out and be identified. I think there’s always going to be a place for very good claims professional.
Paul Haywood: Yeah, I would agree with that, with Roger. It’s really executing on the fundamentals. I would venture to say that a lot of brokers sound alike; you hear a lot of the same words, but are they executing on that? I think execution has become critical to a viable long-term partnership with clients and brokers. I think that will continue. When you talk about the market in itself, again, it’s that partnership. If we think about the property market right now, if you’ve got somebody at multiple locations and they got some locations that are poor risk quality, they’re seeing huge increases, some of them more than 300%. What can your broker do, and how can they partner with the current carrier even? Or what can they do aside from that to help put you in a better position, to help improve those risks?
We’ve seen some improvement. We’ve made tremendous investments in our executive and professional risk, for example, and that’s paid off for our clients. The market has actually softened a little bit there. So those markets are improving a bit too. But I think we’ll continue to see obviously the cyclical nature of things. We’ll continue to see a shaky economy affecting things in different ways for the foreseeable future. It’s all about good open communication, good partnership between the client and the broker and the other counterparties that they’re partnering with. The claims professionals and companies like yours as well, Todd, can help with the claim process and reduce claim costs by getting people back and being active at work and all the benefits from that.
In this part of the Reorientation Blog, we broke down the industry trends in brokering and how that affects how insurance companies deal with claims. Watch the full webinar Reorientation to ReEmployAbility: Backing Broker’s edition HERE that delves into changing trends in the insurance industry!