In the Mind of Insurance Companies: How they think and how that affect policies and pricing

Insurance Companies are a business. The way they see accounts is very analytical and practical. When they review a new account to provide Workers Compensation coverage for, they consider the following details:

• One of their top concerns when considering coverage is the employers claim history 
• The insurance company will review an employers loss history and experience modification rating to determine an account’s acceptability for coverage with their company 
• Employers with a healthy claim history will typically receive better pricing from an insurance company 
• Employers poor history will typically receive higher pricing from an insurance company, or be declined from coverage
• Insurance companies specialize in particular industries, or have limitations on maximum or minimum payrolls, experience medications, or operation exposures, like heights
• Insurance companies outline their ideal account characteristics to help target accounts that they not only want, but that they can offer the most competitive rates for
• These characteristics are referred to as a Carrier Appetite
• The underwriting process helps access if a new account fits into their criteria of the perfect client to meet their appetite
• The insurance company analyzes if the account has a history of bad credit or payment issues
• The insurance company looks for profitable accounts. A profitable account is one that pays more premium than is paid by the insurance company on claims. 
• The insurance company reviews the safety of the account. Claims Prevention programs, Return to Work programs, written safety plans, Workplace safety checks, and Pre-Employment screening helps prove that a business is cautious and safe.
• The insurance company checks if the account is under the correct Class Codes. Payroll under the wrong Class Codes can dramatically affect the cost of the premium.