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The right program placement involves understanding a client’s risk profile and how to best address the business’s needs. Choosing an alternative solution to traditional Workers’ Compensation plans could be the right move.
Often organizations accumulate liabilities due to the assumption of risk they take on from Large Deductible Workers’ Compensation programs or Self-Insured plans. These liabilities may impact their balance sheets and ability to undertake strategic growth plans. They therefore look for avenues to eliminate these liabilities. One solution is via Loss Portfolio Transfers (LPTs) in which organizations transfer their long-term Workers’ Compensation liabilities – both known and unknown– to an insurer in exchange for a fixed amount or premium.
Prescient National has been able to prosper through a mix of organic growth and LPTs. We recognize there are many reasons an entity may desire to release their long-tail Workers’ Compensation liabilities, including removing the potential uncertainty of when actual losses will be incurred and volatility caused by cost fluctuations as a result of rise in medical expenses, state reform or legislative changes.
Prescient National can help make a difference in the health and future of a business with alternative Workers’ Compensation solutions that empower employers to take control over their risks – and results. We help our agency and brokerage partners and insureds identify the right vehicle or program to finance the cost of workplace injuries, manage claims and control costs.
Often organizations accumulate liabilities due to the assumption of risk they take on from Large Deductible Workers’ Compensation programs or Self-Insured plans. These liabilities may impact their balance sheets and ability to undertake strategic growth plans. They therefore look for avenues to eliminate these liabilities. One solution is via Loss Portfolio Transfers (LPTs) in which organizations transfer their long-term Workers’ Compensation liabilities – both known and unknown– to an insurer in exchange for a fixed amount or premium.
Prescient National has been able to prosper through a mix of organic growth and LPTs. We recognize there are many reasons an entity may desire to release their long-tail Workers’ Compensation liabilities, including removing the potential uncertainty of when actual losses will be incurred and volatility caused by cost fluctuations as a result of rise in medical expenses, state reform or legislative changes.
With Excess Insurance/Self-Funded plans, employers set aside an amount to assume financial risk for providing Workers’ Compensation benefits to their employees. Employers pay the cost of each claim ‘out of pocket’ as they occur up to a specified dollar level. Excess Workers’ Compensation insurance steps in to cover claims above the specified dollar amount, protecting employers against an unexpected catastrophic loss as well as unexpected frequency of losses. The benefits of this type of plan include:
Keep in mind that each state sets its own standards for Self-Funded Plan eligibility. Most states, except California, require self-insureds to purchase statutory (no limit) Excess insurance from a state-licensed Workers’ Compensation insurer.
Together with your agent or broker, Prescient National will perform an in-depth analysis to determine if self-funding your Workers’ Compensation is a right fit for your organization. This includes assessing management’s perspective on risk appetite, the financial condition of the organization, the cost and availability of internal and external support systems, and the specific characteristics of your exposure.
Prescient National can help clients determine whether a Captive insurance arrangement for Workers’ Compensation is suited for their business and would produce real value. A Captive is an insurance company owned by the insured employer(s). The employer pays the insurance premiums to the Captive insurance company either directly or through Prescient National, depending on the program structure. Claims are paid from the Captive as they occur with reserve funds building over time. A Captive that is operated successfully will generate profit that belongs to the Captive owner(s) while also providing tax benefits.
Leveraging a Captive as a Workers’ Compensation funding solution provides several benefits, including:
Captives are not for every business. The decision to move forward with a Captive requires a detailed assessment of an organization’s overall risk profile, financial standing and business objectives. We’ll work closely with your agent or broker to assess whether a Captive is a viable and feasible option for your business.
And together with you, we’re creating solutions that will yield greater benefits in the long run.
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