|“Anytime an industry identifies its own best risk practices and then builds a process to independently certify individual firms that embrace those practices, it is building a healthy relationship between insurance coverage provider and insurance coverage customer. The Certification Institute helps insurance underwriters better understand the PEO business and helps its member firms identify and embrace the best risk management tools and techniques available."
Guarantee Insurance Company
"Regardless of whether the current market conditions are hard or soft for workers’ compensation and regardless of whether a PEO’s workers compensation program is written on a guaranteed cost or loss sensitive program, that PEO’s own loss experience will ultimately determine the costs of their workers compensation program. This cost in turn will ultimately impact a PEO’s ability to compete with their peer companies for the same client company business.
One proven method for controlling a PEO’s workers’ compensation loss experience is participating in the WC RM Certification program. This program provides evolving industry best practices that are specifically designed to enable a PEO to better control its loss exposures and improve operating efficiencies. Since a PEO’s own loss experience could represent in excess of 70% of that PEO’s ultimate costs for workers compensation, the costs and time associated with obtaining and maintaining a WC RM Certification designation appears to be a prudent use of resources.
At Zurich we understand the benefits a PEO can achieve through WC RM Certification and we specifically target many PEOs as prospective customers because of the fact they have this designation.
Rob Morris, CRM, CIC
Vice President-Casualty Underwriting
Zurich Global Corporate Casualty
"While no certification program can take the place of individual underwriting by the carrier, certain “endorsements/sanctions” give the carrier confidence in its own decisions and make the underwriting process simpler and less painful for the buyer. Two specific “sanctions” come immediately to mind: first, the presence of a CPA audited financial statement and second, the presence of WC Certification. Over the years, I have successfully underwritten risks both with and without these two documents. We complete our own “due diligence” in either case. However, given a choice, we will always select the risk that has been independently qualified by others—the “due diligence” process is verification versus uncovering facts. Also, the independently qualified risk usually receives the benefit of the doubt which relates directly to better terms, conditions, and ultimately costs."
SUNZ Insurance Company
"In its 15 years of underwriting and managing workers’ compensation insurance for the PEO industry, Artex has consistently found PEOs that have been through CI’s WC certification process have better risk management paradigms, better financial results, and more stability in their operations than their non-certified peers. As such, we tend to see certified PEOs achieving consistently lower costs of workers’ compensation coverage than non-certified companies.
Additionally it is a fact that, regardless of industry, companies that go through financial audits are more transparent, and ultimately produce more value in their operations than non-audited companies. Artex views the certification process in a similar light, in that PEOs that take the steps to go through CI’s WC certification process are committed to risk management best practices that frankly separate them from the rest of the industry and generally achieve more competitive workers compensation programs than non-certified companies.
While P&C market conditions have been soft over the past several years, everyone knows WC insurance is highly cyclical and, with combined ratios reaching unsustainable levels, there will inevitably be market corrections. WC risk management certified PEOs will be best positioned to weather this impending storm. To that end, forward looking PEO owners would be well served to invest in their futures by engaging in the Workers Compensation Certification program now, not when the next hard market has already arrived."
Senior Vice President
Artex Risk Solutions, Inc.
"CI’s certification program is paramount to the long term market availability of workers’ compensation to PEOs. It provides a fundamental baseline process that is rooted in the cornerstones of risk management and underwriting. From the client service agreement, to the review of the risk management process, certification helps WC carriers affirm a PEO’s commitment to formalize the foundational practices that make a WC risk either acceptable or unacceptable to a carrier."
"Carriers are always looking for risks that are “the best of the best.” It is often difficult to make those determinations from a typical submission. A PEO that already has CI’s Workers Compensation risk management best practices certification provides a level of confidence that proper systems and procedures are in place. Carriers all handle the underwriting process differently, but this program gives an underwriter the confidence that the important qualities of the superior risk are in place. The insurance marketplace is constantly changing, but a PEO with this certification will always enjoy an advantage over the competition."
Michael E. North, CIC
Senior VP Operations
Lumbermen's Underwriting Alliance
U.S.Epperson Underwriting Co.
Manager, LIG Insurance Agency, Inc.
|"As an owner, it is nice to have an outside group reviewing our WC risk management practices. Our certification has helped us with getting our files better organized and we are improving our systems on an annual basis."
"Odyssey One Source began its WC risk management certification process in 2003. Since that time, our developed loss ratio has consistently improved, from 66.49% in 2002 to 18.25% in 2008. Our average incurred loss per lost-time claim is 30% below the industry average and our overall WC expense, as a percentage of payroll, is also below the industry average. Providing the focused risk control services required by the best practices has enabled us to maintain a claims frequency rate (claims per $10,000 of payroll) near the industry average despite an aggressive growth plan. Additionally, implementing the certification program’s claims management best practices has had a positive and tangible effect on our carrier relations."
"Landrum Companies recognized early the value of the certification process. We saw it as a way to apply best practices to our risk management program and to differentiate us in our market. We proved to be right on both counts. In the two years following our certification, we decreased our disability days per million dollars of payroll by 74% percent. In addition, we were approached by a prospect who was looking for a PEO in Florida that was both WC certified and had ESAC coverage. We were one of two PEOs under consideration. This prospect is now one of our largest clients."
Ted A. Kirchharr
Vice President/Chief Operating Officer
Landrum Professional Employer Services
"The Certification Institute, via the certification process, creates a shared underwriting process for PEOs and workers' compensation providers that helps bring credibility to our industry. Through NAPEO and the Certification Institute initiatives, we should see more workers' compensation providers re-enter the PEO markets because of the process."
"PeopLease has been certified by the Certification Institute since 2005. The CI program helps us keep our loss control program disciplined and consistent, which helps minimize our losses. With our loss sensitive work comp program, the prevention or control of just one large claim per year can result in savings of 4 to 10 times or more of our annual fees and costs. Certification is a tremendous tool and a tremendous bargain."
"The certification program provides an opportunity for the PEO and insurance industries to work together to ensure long term profitability and growth for all parties."
Risk Transfer Solutions