Report: COVID-19 Accounts for 1-in-9 California Workers’ Comp Claims in 2020

Wow — We are seeing a depletion of capacity/increased costs for health care and other “client-facing” industries.  The why —

“CWCI says that brings the total for the year to 41,861 claims, or 11.2% of all California job injury claims reported for accident year 2020. Those claims included 224 death claims, up from 160 reported as of Aug. 10.”

.005 of all claims in California are a COVID19 fatality year to date.  The unknowns are the reopens, adjusted reserves and longevity of the severe and critical patients.  Still much unknown –

September 28, 2020

The California workers’ compensation COVID-19 claim count continued to grow in August, albeit at a much slower rate than in July, with new data showing that as of Sept. 21, the state had recorded 5,130 COVID-19 claims with August injury dates, according to data compiled by the California Workers’ Compensation Institute.

CWCI says that brings the total for the year to 41,861 claims, or 11.2% of all California job injury claims reported for accident year 2020. Those claims included 224 death claims, up from 160 reported as of Aug. 10.

The latest claim count shows that the number of COVID-19 claims reported to the Division of Workers’ Compensation doubled from May to June, then increased another 16% in July. The numbers reported for August, however, fell sharply, even accounting for the lag in the reporting of COVID-19 claims, according to CWCI.

The CWCI projects there could ultimately be 8,208 COVID-19 claims with August injury dates. Given that the latest tally suggests COVID-19 claim volume may have peaked in July, CWCI is now projecting 48,086 COVID-19 claims with January through August injury dates, which is less than the January through July projection from last month.

CWCI reports that the distribution by industry shows health care workers continue to account for the largest share of California’s COVID-19 claims, filing 38.1% of the claims recorded for the first 8 months of this year, followed by public safety/government workers who accounted for 15.8%. Rounding out the top five industries based on COVID-19 claim volume were retail trade (7.6%), manufacturing (7.6%), and transportation (5.0%). In addition, the percentage of denied COVID-19 claims declined to 28.6% from CWCI’s May report of 35.5%.

Related:

Phishing Scam Targeting PEOs

See below from our friends at NAPEO…

 

 

 

 

Today, a PEO notified NAPEO that they and their clients were the victims of a novel phishing scam. Under this scheme, fake Google advertisements were created to mimick the PEO’s legitimate ads and appeared when any variation of the PEO’s name was searched. The phony ads then redirected anyone who clicked on them to a phony log-in page for the PEO’s payroll software. The unaware victims had their personal information captured, including usernames and passwords.

The PEO is working with Google to take down the fraudulent ads. They have also notified all victims and have secured any jeopardized accounts.

Please remain vigilant against these types of scams. You should also consider checking to see if any of your company’s Google ads are being mimicked to commit fraud. Additionally, you should consider recommending that all clients and employees enable two factor authentication, where available.

 

The New Normal….Pandemic Insurance Products

It was only a matter of time before insurers began to develop products to cover pandemics.  The products range from traffic monitor apps that pay insureds based on a minimum threshold to relapse coverage that protects businesses forced to shut down a second time.  The complete article from Reuters is below.

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Insurers are creating products for a world where virus outbreaks could become the new normal after many businesses were left out in the cold during the COVID-19 crisis.

While new pandemic-proof policies might not be cheap, they offer businesses from restaurants to film production companies to e-commerce retailers ways of insuring against disruptions and losses if another virus strikes.

The providers include big insurers and brokers adding new products to existing coverage, as well as niche players that see an opportunity in filling the void left by mainstream firms that categorize virus outbreaks like wars or nuclear explosions.

Tech firm Machine Cover, for example, aims to offer policies next year that would give relief during lockdowns. Using apps and other data sources, the Boston-based company measures traffic levels around businesses such as restaurants, department stores, hairdressers and car dealers.

If traffic drops below a certain level, it pays out, whatever the reason.

“This is the type of coverage which … businesses thought they had paid for when they bought their current business interruption policies before the coronavirus pandemic,” the company’s founder Inder-Jeet Gujral told Reuters.

“I believe this will be a major opportunity because post-COVID, it would be as irresponsible to not buy insurance against pandemics as it would be to not buy insurance against fire.”

The company is backed by insurer Hiscox and individual investors, mostly from the insurance and private equity world.

Restaurants in Florida’s Miami-Dade County, where Mayor Carlos Gimenez on Monday ordered dining to shut down soon after reopening, are now reeling, said Andrew Giambarba, a broker for Insurance Office of America in Doral, Florida.

“It’s been like they made it to the ninth round of the fight and were holding on when this punch came out of nowhere,” said Giambarba, whose clients include restaurants that did not get payouts under their business interruption coverage.

“Every niche that is dealing with insurance that is affected by business interruption needs every new product they can have.”

Filling the Void

Pandemic exemptions have helped some insurers emerge relatively unscathed and the sector has largely resisted pressure to provide more virus cover. Indeed, some insurers that paid out for event cancellations and other losses have removed pandemics from their coverage.

British risk managers association Airmic said last week that the pandemic had contributed to a lack of adequate insurance at an affordable price and most of its members were looking at other ways to reduce risk.

To help fill the void in a locked-down world, Lloyd’s of London insurer Beazley Plc, started selling a contingency policy last month to insure organizers of streamed music, cultural and business events against technical glitches.

“These events are completely reliant on the technology working and a failure can be financially crippling,” said Mark Symons, contingency underwriter at Beazley.

Marsh, the world’s biggest insurance broker, has teamed up with AXA XL, part of France’s AXA, and data firm Arity, which is part of Allstate, to help businesses such as U.S. supermarket chains, restaurants and e-commerce retailers cope with the challenges of social distancing.

With home deliveries surging, firms have hired individual drivers to meet demand, but commercial auto liability insurance for “gig” contractors with their own vehicles is hard to find.

Marsh and its partners devised a policy based on usage with a price-by-mile insurance, which can be cheaper than typical commercial auto cover as delivering a pizza doesn’t have the same risks as driving people around.

“Even when the pandemic is over, we believe last-mile delivery will continue to grow,” said Robert Bauer, head of Marsh’s U.S. sharing economy and mobility practice.

A report by consultants Capgemini showed that demand for usage-based insurance has skyrocketed since COVID-19 first broke out and more than 50% of the customers it surveyed wanted it.

However, only half of the insurers interviewed by Capgemini for its World Insurance Report said they offered it.

Bespoke Cover

Since businesses are only now learning how outbreaks can affect them, some new products are effectively custom-made.

Elite Risk Insurance in Newport Beach, California, has been offering “COVID outbreak relapse coverage” since May for businesses forced to shut down a second time, its founder Jeff Kleid said.

The policies are crafted around specific businesses and only pay out when certain conditions are met, Kleid said.

For film and television production companies that could be when a cast member contracts the virus, forcing them to stop shooting. Another client, which raises livestock for restaurants, is covered for a scenario in which it would be impossible to get animal feed.

Such policies do not come cheap. A $1 million policy could cost between about $80,000 to $100,000 depending on the terms.

“The insurance … is costly because it covers a risk that does not have a historical basis for calculating the price,” Kleid says.

And in March, when COVID-19 ravaged northern Italy, Generali’s Europ Assistance offered medical help, financial support and teleconsultations for sufferers when discharged from hospital, on top of regular health insurance.

It sold 1.5 million policies in just two weeks and now has 3 million customers in Europe and United States.

Some insurers are also working on changes to employee compensation and health insurance schemes. With millions of workers not expected to return to offices anytime soon, some large insurers in Asia are preparing coverage to account for that, according to people familiar with those efforts.

At least one Japanese insurer has started work on a product to cover employees for injury while working at home, they said.

“Working from home will be the new normal for years to come. That would make the scope of the employee compensation scheme meaningless if a person suffers an injury while at home,” said a Hong Kong-based senior executive at a European insurer.

(Reporting by Noor Zainab Hussain in Bengaluru, Suzanne Barlyn in Washington Crossing, Pennsylvania, Carolyn Cohn in London and Sumeet Chatterjee in Hong Kong; additional reporting by Muvija M; Editing by Tomasz Janowski and David Clarke)

https://www.insurancejournal.com/news/international/2020/07/10/575081.htm

 

Brief Update on Recent Activities By David Daniel, Florida PEO Lobbyist

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Update on Recent Activities related to COVID-19 from FAPEO –

There is a lot of COVID-19 related activity we have been working on for Florida PEOs as we face these uncertain times.  This email is intended summarize our recent work.

Emergency Orders at DBPR

With the required annual financial reports due to the Department of Business and Professional Regulation we contacted Secretary Beshears and asked that he issue an order delaying their due date.  Secretary Beshears indicated to us would be taken care of.

DBPR Emergency Order 2020 – 01 was issued March 16.  In the order Secretary Beshears suspends and tolls for 30 days any existing renewal deadline for a license, permit registration or certificate.

DBPR Emergency Order 2020 – 03 was issued March 23, 2020.  The order suspends and tolls through May 31, 2020 all time requirements, notice requirements and deadlines for final agency action or applications for permits, licenses, rates and other approvals under any statutes or rules.

Unemployment Compensation

As you can imagine there are reports from DEO of increased filings for unemployment compensation insurance.  While the UC Fund has significant resources available, as we have seen in the last recession, the unemployment compensation trust fund can go from flush to negative in a short amount of time.

It is expected with the dramatic decline in business activity related to the social distancing and businesses closures, employers will be forced to make some tough decisions with their workforce.  As you know, 443.131 F.S allows the Department of Economic Opportunity the ability to not charge an employer’s unemployment compensation contribution rate for a declared national disaster or an disaster of national significance.  Further, 443. 116 F.S. creates the short-time compensation program which allows an employer to reduce work for employees in lieu of layoffs with DEO approval.  We have requested DEO make the decision that this event and the subsequent layoffs which will follow are not chargeable to an employer’s unemployment compensation rate.  Further we have asked that if an employer chooses a short-time compensation arrangement it would also not be chargeable to their UC rate.

To that end, last week Governor DeSantis indicated in a press conference this event would not be charged to an employer’s unemployment compensation rate.  We are awaiting the official announcement from DEO.  There is no word yet on the short-time compensation and will let you know when we hear more from DEO.

Essential Business Sectors under CISA Guidance

The state and the country have been grappling with the impacts of decisions on social distancing, shelter in place orders and mandatory business closures.  Several counties have already issued emergency orders closing non-essential employers including Miami-Dade, Broward, Alachua and Duval counties.  We have asked the Governor’s Office to include professional employer organizations as essential critical infrastructure workers in any statewide emergency order mandating business closure.  At the direction of the Governor’s Office, we have based our request on Cybersecurity and Infrastructure Security Agency guidance.  (See attached)

While the decision to issue a statewide emergency order closing all non-essential businesses has as not been made to date, our proactive efforts have placed us in the best possible position to remain open.

Additional Readings – Statues Issued

443.131 F.S. – Click here to read more.

443.1116-F.S. – Click here to read more.

DBPR – Emergency Order 2020 – Click here to read more.

CISA Guidance on Essential Critical Infrastructure Workers – Click here to read more. 

State of Florida Emergency Order – Click here to read more.

 

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.