Storm clouds loom over Workers Compensation market

With the economy in slow recovery for the foreseeable future, we are taking the time to look at how this will affect the Workers Compensation marketplace. The NCCI (National Council on Compensation Insurance) has recently focused on several factors which, in part, drive the workers compensation market. Some of these factors include unemployment, industrial production, disposable personal income, and corporate profits – all putting pressure on the Workers Compensation market to harden. And the longer the workforce remains unemployed, the greater the need will be for training as this workforce re-enters the workplace. The result of companies learning to operate in this sluggish economy will produce permanent changes in the make-up of the labor force

Buyer, be prepared

Over the last decade, private company Management Liability policies (Directors’ & Officers’ Liability, Employment Practices Liability, Fiduciary Liability) have been very competitively priced with generally loose underwriting guidelines. But, as a famous Greek philosopher once said, “Nothing endures but change” – and we are currently in the midst of a pendulum swing towards stricter underwriting.

Management Liability underwriters with leading insurers, including Arch and Chubb, have confirmed that complete applications, with all requested supplemental information, have become the new norm. In addition to encountering more rigid underwriting, most companies are also likely to be subject to some combination of: higher retentions, higher premiums, and/or reduced

The expected boom in cyberinsurance

The New York Times published an article today predicting that there will be a surge in the purchase of what it refers to as “cyber insurance” – insurance covering a range of exposures relating to the breach of privacy and network security. The article has some significant exaggerations and misleading statements, and it quotes extensively from people whose livelihood depends upon cybersecurity breaches and the sale of insurance policies, but it provides a useful window on the current environment. The article places great importance on the recent guidelines issued by the SEC’s Division of Corporation Finance. Click here for WGA’s blog post and downloadable White paper discussing these new guidelines and their potential impact

2012 Property renewals for tech companies: start early

Technology companies that have owned manufacturing operations or outsource their manufacturing to suppliers in Asia should get an early start on their 2012 Property Insurance Renewals.  Outside of the insurance realm, companies should seek diversification in their supply chain whenever possible to help mitigate a concentration of risk in catastrophic prone countries.

The credit rating firm, Fitch Ratings, said in a new report that the “reinsurance industry will most likely try to raise catastrophe premiums across the world to try to absorb the steep losses from natural disasters in the Asia-Pacific region.” This will impact technology companies who rely on outsourced Asian manufacturing locations and purchase Property and Business Interruption coverages in order to protect their supply chain.

Rewarding patients for cheaper care

In the continuing effort to make the cost of healthcare more transparent, Harvard Pilgrim Health Care recently announced a new program which they hope to roll out to Massachusetts members called SaveOn. This program provides cash rewards ranging from $10 to $75 for members that seek lower cost care for non-emergency outpatient procedures such as colonoscopies, MRI and CT scans, mammograms, lab work, bone density studies and ultrasounds. Members can call a toll-free number and to speak to a nurse who informs them of any lower cost plan providers in their area. In the event they are already scheduled to receive service from a lower cost provider, the member will be rewarded with $10 for making the call. If the result of the call is to directing them to a lower cost provider the reward could be as high $75. Potential savings on

Vermont’s single-payer system: model for healthcare reform?

With health care costs escalating and the number of uninsured Americans estimated at 50 million, private entities as well as state and federal governments are trying to find effective solutions to ongoing health care problems. Earlier this year, Vermont passed legislation creating a single-payer healthcare system to be operational in 2017, potentially being the first state in the nation to have such a system. It is still too soon to assert that a single payer system is an effective way to combat rising health care costs and ensure coverage for all Vermont residents. Nevertheless, by taking the bold step to pass such a law, Vermont will be under scrutiny as the rest of the country watches what unfolds in the coming years.

Critical Access should not be the target of cuts for rural healthcare

I am a big fan of National Public Radio. I enjoy and rely on their news programs not only for information, but also for the perspective on many of the news items of the day. However sometimes in their effort to be brief, their news items miss the important aspects of a news story that cannot be ignored. Today NPR ran a story about Critical Access Hospitals. In my opinion, this story was one of those times. Jenny Gold of the NPR/Kaiser Health News Partnership reported on whether or not the federal program designating these facilities as such was effective or necessary. While the piece focused its attention on Hood memorial Hospital in Amite, LA and its operating loss of $700,000 last year, the essence of the story goes much deeper. Specifically, it raised the issue of the need for the enhanced Medicare reimbursements for these facilities in the current fiscal environment

Why not to pay cash when buying a house

The U.S. federal tax code makes financing a mortgage exceptionally cheap, so you can go and find better things to do with your cash than using it to avoid taking out a mortgage. To pay cash for a house may seem like a conservative option, but as it turns out it can be risky since it may be difficult to retrieve your money quickly should you encounter some kind of financial disaster.

Also, by limiting your home purchase to the amount of cash you have to put it into, you assume all the risks of equity ownership with none of the benefits of leverage. The benefits include a more significant return on equity, both in your home’s appreciation and in the real day-to-day enjoyment of the benefits that give value to a home in the first place.