Thanks For Joining Us @ NAPEO 2019

Libertate Insurance wanted to thank you for joining us at NAPEO 2019 in Austin! I hope everyone had a great time and learned a lot from the breakout sessions!

We hope you gathered some valuable information about the impact that Big Data and AI/ML can have on you and your PEO! We look forward to a great year ahead!

Big Data – How Can It Help You?

“Big data” is present in every part of business and society in today’s world. Every medication that hits the shelves goes through extensive study and comparison utilizing big data. Every intersection with a traffic light uses big data to determine the length of time for each color. Gas prices, food prices, utility bills, EVERYTHING undergoes analysis using big data.

But you may ask, “but David, how does this affect my PEO?”

Answer your own questions and many more at 3:45 today at NAPEO featuring our CEO Paul Hughes!

Big Data – AI/ML Predictive Analytics and the Potential for PEO
Sheldon Brechtel, Jr., Executive Vice President – CIO, CCMSI
John Harman, SVP PEO Solutions Group, Aon
Paul Hughes, CEO, Libertate Insurance, LLC
Chase Pettus, Predictive Analytics, Gradient A.I.

 

If you’d like to know more about what is going on at NAPEO, see the schedule here!

Big Data – AI/ML Predictive Analytics and the Potential for PEO

We hear it all over the news “BIG DATA”, “MACHINE LEARNING”, “ARTIFICIAL INTELLIGENCE”, but what does it really mean and more importantly, what does it mean for your PEO?

Big data is a phrase used to describe an extremely large data set. Take NCCI for example, they are what we would consider “big data” for the PEO industry due to sheer amount of claims and exposure data they posses for the states they administer.

But what does big data mean to you? Find out more at the NAPEO breakout session on Tuesday from 3:45-4:45!

Big Data – AI/ML Predictive Analytics and the Potential for PEO
Sheldon Brechtel, Jr., Executive Vice President – CIO, CCMSI
John Harman, SVP PEO Solutions Group, Aon
Paul Hughes, CEO, Libertate Insurance, LLC
Chase Pettus, Predictive Analytics, Gradient A.I.

 

If you’d like to know more about what is going on at NAPEO, see the schedule here!

History Repeats Itself, Are You Prepared?

The organization of exposure performance for a PEO is found in its ability to predict and benchmark against the historic results of peers and the industry as a whole. Historical performance is a metric a lot of people lose sight of. We tend to look at current, or maybe past year performance most often, but come time to forecast losses, promulgate a mod or re-price our business 3, 5, 7, or even 10-year performance comes into play.

We’ve seen time and time again from PEO’s that come time for actuarial review, they are misunderstand or are even surprised with the numbers they are presented. RiskMD bridges the understanding of potential issues within a given portfolio of business entirely. On the fly, you are able to create an accurate Loss Development Triangle with corresponding link ratios for multiple measures. From total incurred, to ‘Loss Time Only’ incurred claims, you can create an accurate triangulation based off your data, for any development interval you would like!

A loss triangle and its corresponding link ratio are the primary methods in which actuaries organize claim data that will be used in an actuarial study. The reason it is called a loss triangle is that a typical submission of claim data from a client company shows numeric values forming a triangle when viewed. The triangle allows you to track loss data at set valuations (development periods) so you can see development from valuation to valuation. The difference between each valuation is known as the link ratio. True development is represented typically in a pure dollar figure, where as a link ratio is represented as the growth between periods.

Within RiskMD you can view a plethora of Loss Triangles. The first selection you need to make is whether you want to organize your triangulation based on accident or policy year. We have taken into account that not all our clients have the same effective dates, so we give you the option to select your program effective date. The next thing you need to think about is what type of triangulation you would like to look at? Below is what’s available in RiskMD:

Total Incurred – A pretty standard triangulation, a measure of development for total incurred (total paid + total reserved)

Total Paid – Measure of development for total paid

Total Reserve – Measure of development for total reserves

Med Only – Measure of development for total incurred if the claim is marked ‘Medical Only’

Lost Time Only – Measure of development for total incurred if the claim is marked ‘Indemnity’

Medical Paid – Measure of development for all medical paid

Medical Incurred – Measure of development for all medical incurred (medical paid + medical reserved)

Indemnity Paid – Measure of development for all indemnity paid

Indemnity Incurred – Measure of development for all indemnity incurred (indemnity paid + indemnity reserved)

Number of Claims – Measure of development for claim count. Will show outliers for claims reported late

% Closed Claims – Measure of development to show your claims closure rate and number of claims still open in correspondence to the accident or policy year it occurred in

Example dynamic Loss Development Triangle

RiskMD worked with a pricing actuary who has been in the field for the past 20+ years to create this dynamic model. Powering the visualization is YOUR data. No matter if you want to see the development on a month-to-month basis, or on an annual development, as long as RiskMD has the data, the visualization can be rendered.

Knowing that, if you are having issues producing year end reports, or if you want to stay ahead of the game and know where you sit prior to your next actuarial study, contact us today! We will get you squared, or need I say triangled away!!

Big Data was a BIG Deal at NAPEO’s Risk Management Conference

Last week’s Risk Management Conference hosted by our friends at NAPEO was a huge success! For those that weren’t able to attend click here to access the Big Data presentation that was presented by the following individuals:

  • James Benham / JBKnowledge
  • Paul Hughes / Libertate Insurance Services
  • Kristin Meeker / CCMSI
  • Chase Pettus / gradient A.I.

NAPEO’s Risk Management Conference Ready to Invade Nashville on March 6th and 7th!

NAPEO’s annual Risk Management Conference is right around the corner! It’s a must see conference for those interested in risk management and other related areas of focus. Click here to access the agenda. Below are presentation topics:

  • Workers’ Compensation Rate Update
  • Crime Insurance
  • Big Data
  • Cyber Security
  • PEOs and Cannabis
  • Payroll Fraud

Libertate is proud to be a sponsor of this wonderful conference. We hope to see you there. If attending, we would love to buy you a drink and talk about insurance, data and the PEO industry!

Paul – phughes@libertateins.com

David – dburgess@libertateins.com

Sharlie – sreynolds@libertateins.com

Subsidiary or Affiliate? Don’t Wait For a D&O Claim to Find Out.

From contributor Lisa Burbage, director and professional broker with CRC’s Seattle, WA office.

http://crcgroupins.com/Tools-Intel/post/subsidiary-or-affiliate

When insureds own multiple companies, they may assume that all the entities in their portfolio are covered by their corporate management liability policy. That can be an expensive mistake. The reality is that it comes down to the actual wording on their policy.

UNDERSTANDING THE DIFFERENCE

Confusion often arises over whether a company is a covered subsidiary or a potentially non-covered affiliate. This is particularly true for industries such as real estate, restaurants and healthcare that frequently create single-purpose entities to manage the liability risks of separate ventures. Newly created corporations or limited liability companies (LLCs) may be owned in whole or in part by the same owners of the first Named Insured whose name is on the insurance policy, but not by the named insured itself. That distinction is crucial.

STAYING ON TOP OF CHANGES

Because companies are not static, gaps in coverage may arise when an Insured assumes their newly created affiliates are covered under their policies. Over the course of a year, it’s quite possible that insureds have created or invested in new LLCs or corporations. Further heightening the risk, more and more carriers send out automatic renewal quotes, putting the burden on the insured to update their organizational structure with the underwriter.

To avoid finding out that the policy doesn’t provide coverage after a claim is made, it’s important to explain the difference and the potential consequences to clients. This can help clients understand the distinction and to provide more detailed information. Clients should be asked to list every company they want covered along with its ownership structure at every renewal. Uncovered affiliates can usually be added to the policy by endorsement for no charge as long as the rating exposures are included on the application. Not knowing when an entity is an affiliate means that affirmative coverage can’t be granted by endorsement.

BOTTOM LINE

It pays to know your clients’ businesses. Don’t wait for a claim to be denied to discover that a client’s affiliate company isn’t covered by the corporate D&O or EPL policy. Brokers should educate clients on the difference, make sure they properly identify all of the subsidiaries and affiliates they want covered at every renewal, and add them to the policy. Taking a proactive approach now can prevent an expensive claim denial later.

 

NAPEO Presentation: The PEO Industry Footprint in 2018

After many hours and much hard work, the folks at NAPEO, with their research partners at McBassi & Company, have completed a detailed analysis of the PEO industry footprint as of 2018.  Because there is no government entity which tracks data specific to PEO, NAPEO takes it upon itself to gather and maintain this data for the benefit of all every few years.  I recently had the pleasure of attending a webinar during which they reviewed and discussed their findings published in their latest white paper titled An Economic Analysis: The PEO Industry Footprint in 2018.  Much of the results of this research effort are very exciting for the PEO industry and are summarized below.

Key Points:

  • Total PEO WSEs (Work Site Employees) is greater than the collective total employment of many of the largest and most successful companies in the US
    • Despite this impressive statistic, still only 12.1% of all WSEs employed by a small business (firms with 10-99 employees) are currently using a PEO
      • This leaves room for significant continued growth in the PEO sector in the coming months and years

  • Rate of growth of PEO WSEs is significantly higher than growth rate of employment in US economy as a whole

Additional details:

  • It is estimated that there were 907 PEOs operating in the US in at the end of 2017
  • This includes 175,000 PEO clients, and
  • Approximately 3.7 Million WSE (Work Site Employees)
    • This employee count is equal to the combined employee count of some of the largest and most notable companies in America

  • Total estimated payroll paid in 2017 for these employees was approximately $176 Billion
  • Growth rate of the PEO industry was approximately 14 times higher than the growth rate in employment in the US economy overall in 2017

  • That being said, only 12.1% of small businesses in the PEO “Sweet Spot” are current PEO clients
    • PEO “Sweet Spot” is defined as companies with 10-99 employees
  • 2017 PEO industry growth rate correspond to a sustained rate of the industry doubling every 9-10 years

  • Below is a list of PEOs counts by state at the end of 2017

You can review a copy of the complete power point from with webinar as well as a copy of the published white paper by clicking on the following links:

The PEO Industry Footprint in 2018 – Power Point

2018-white-paper-final

To view a recording of the webinar, follow the below instructions:

  1. Follow this link to view the webinar:
    1. https://napeo.webex.com/napeo/onstage/playback.php?RCID=70d70d63e45404ce0bd939b1a1b2b533
  2. Select Playback

Many good questions were asked during the presentation, so the video is well worth the watch (runs about 45 minutes).

We extend a sincere Thank You to NAPEO for all the great work they do to advocate for and substantiate our industry on behalf of all PEOs.