Our Take on the NCCI PEO Study
Risk Transfer is proud to announce that we will be publishing an article on the state of the PEO industry in the upcoming PEO Insider March edition. We have always believed in the PEO model and are so proud that the most prevalent actuarial bureau in the country – the National Council of Compensation Insurance (“NCCI”) - has been able to provide empirical evidence on how the PEO model compares to the traditional deployment of workers’ compensation. In presenting his study this last August on the PEO industry titled “Before You Speculate, Investigate”, Harry Shuford, Chief Economist of the NCCI, Mona Carter, National Policy Development Executive, and the NCCI team provided many poignant facts in the first three ever studies to discuss the empirical evidence. By no means one way or the other… just the facts –Harry and Mona stole the show at the beginning with some of their opening one-liners:
Harry Shuford opined, “Saving the reputation of PEO is like getting chewing gum out of one’s hair”.
Mona Carter spoke to the “mythical image of the PEO 20 years ago”
The overall theme was that every industry has its share of bad actors and that PEOs have made considerable progress in being one respected part of the workers’ compensation delivery system. What is most appreciated is their independence to the process regardless of the result. The NCCI keeps score with the greatest amount of credibility available to anyone. They have worked hard to better understand the PEO model, written data scripts to understand PEO results and are still working very diligently to make the carriers that underwrite our industry more efficient in supporting the PEO model. Mr. Shuford’s influence reflects well on the institution’s commitment to be accurate and to evolve as times change.
PEOs are more compliant with data to actuarial bureaus
PEOs do not “mod wash”
The lost-time severity for PEOs was markedly lower.
PEOs outperformed the traditional market from a loss ratio standpoint for 4 of the last 6 years, tied for one and only lost in the most current year (which the writer feel is only due the faster payout pattern within the PEO model then traditional industry)
PEOs actually over-report claims in versus the historical stigma of not presenting claims to their insurance companies
Look for NAPEO's PEO Insider March edition and check out the Risk Transfer featured article to learn more about PEO progress in 2014.
Join the Conversation on Linkedin | About PEO Compass
The PEO Compass is a friendly convergence of professionals and friends in the PEO industry sharing insights, ideas and intelligence to make us all better. All writers specialize in Professional Employer Organization (PEO) business services such as Workers Compensation, Mergers & Acquisitions, Data Management, Employment Practices Liability (EPLI), Cyber Liability Insurance, Health Insurance, Occupational Accident Insurance, Business Insurance, Client Company, Casualty Insurance, Disability Insurance and more.
To contact a PEO expert, please visit Libertate Insurance Services, LLC and RiskMD.