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.