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FREQUENTLY ASKED QUESTIONS A broker has already promised to present me with several options, so why should I consider Employers Direct? Why did the broker tell me not to go with Employers Direct? The broker told me that new companies might not be around in a few years. So, why should I consider Employers Direct? If I switch to Employers Direct, how will I get support on claims from previous years? I like your online technology called Policyholder's Claims & Information Center (PCIC) that allows access to our policy and claims information, but how difficult will it be for our people to become trained on the system and what about privacy issues? A broker has already promised to present me with several options, so why should I consider Employers Direct? There are two reasons: 1. You can compare the broker's options to truly market-driven price and terms 2. At the very least, you can gain leverage and control over your negotiation with brokers and the carriers they selected It is true that when you obtain multiple quotes from a broker, you are provided with the ability to shop carrier options - but only those that a broker has selected to present. To make the best choice for your company, a best-practices approach requires the following: Understand the broker's financial motivation for presenting a particular carrier - you may have to be blunt and ask if there is any undisclosed compensation scheme that will benefit the broker if you select a particular carrier. Do a reasonable amount of due diligence about the claims capability and philosophy of the carrier - ask for policyholder references of the carrier options that a broker is proposing and check them out. In the post-reform era, the manner in which a carrier manages your claims can have a big impact on a policyholder's financial performance; remember, bad claims management will negatively impact your business' future financial performance - not the brokers! Compare the services and prices offered by brokers' options to a market-driven offer from a direct writer, such as, Employers Direct, you already recognize the importance of having a broker shop carriers to obtain the best terms. Why not compare market driven prices and terms against broker options. At the very least, you will gain significant negotiating power with the broker just by having another option on the table. Nothing is more important during a negotiation than having options. You obtain multiple quotes from a broker because this provides you with the ability to evaluate different carriers. But you have no way to evaluate the broker's performance unless you compare the broker's alternatives to something entirely different, a direct writer like Employers Direct. Your desire to make the best choice is the very reason why you should consider Employers Direct. We are a different alternative because we are a direct writer, an option not available through any broker. Why did the broker tell me not to go with Employers Direct? We are always amused when we hear that question. Early on, we produced an advertisement that proved to be highly effective. Question: "What does a broker have to lose when we call you?" Answer: "Everything!" Like other types of retailers, such as, car dealers and manufacturers' representatives, insurance brokers typically have volume and profit commitments with their appointed carriers. Unless they meet those commitments, they can be penalized with lowered compensation and fail to meet their own revenue targets. Suppose you were in a broker's shoes, and a customer asked you about one of your toughest competitors - especially a competitor like Employers Direct, which has one of the highest customer retention rates in the business. No salesman wants a good commission-earning customer to disappear without a fight. Always remember, the broker is a costly middleman who does not want you to make a decision that will jeopardize the premium volume and profit commitments arranged with carriers, which in turn, could cause the broker to miss compensation targets. Make sure you understand who the customer is in an insurance transaction. To the carriers that a broker represents, the broker is the customer. This means that, for those carrier options, you are not the carriers' customer; you are the broker's customer. Ever wonder why you are seeing those particular carrier options from a broker? Typically, carriers appoint a broker and arrange compensation based on a commitment of business flow and/or expected profitability of a "book of business." The broker is keeping his commitment with the carriers that he selected for you to see. The broker told me that new companies might not be around in a few years. So, why should I consider Employers Direct? The broker is the first to know that a carrier's newness has little to do with its financial stability or operating performance. All of the insurance carriers with whom brokers did business in the late 1990's and went bankrupt had been in business for decades. Once you have confidence in any carrier's financial stability and operating performance, there are at least two major advantages of placing your workers' comp insurance with a relatively new carrier: LOWER PRICES: Newer carriers are in the best position to share more profits with policyholders. To you, this means lower prices. Why? A newer company, such as Employers Direct, does not have a large number of old claims that absorb current profits. This is why Employers Direct has been able to share more of its savings from workers' comp reforms with policyholders than any other carrier. Many older workers' comp carriers have earned high profits from California reforms but had to re-allocate them right into old claims that needed strengthening. BETTER TECHNOLOGY: Newer carriers are almost always better technology partners. Older carriers often had ancient legacy systems installed during a different era, technologically-speaking. These systems are less responsive and more prone to human error and down-time. This is why so many carriers with old legacy systems cannot provide you with access to your claims online and in real-time via the web. And, when you call a claims examiner about a claim, the information that he/she calls up may or may not contain the most recent updates to the file. This poor access to information complicates and slows down the claims handling process. When it comes to claims handling, saving time means saving money. When designing and installing our claims handling system, Employers Direct utilized the latest technologies. That is why our system provides you with real-time access to claims information at the click of a mouse 24/7. If I switch to Employers Direct, how will I get support on claims from previous years? Remember, the broker earned a big commission for selling you the policy and for servicing claims that were created during that policy period. Why should the broker want to now cut and run? If a broker fails to support your needs, this tells you something important - that you paid the broker far too much money for services rendered. If older claims need servicing and the broker that represented the carriers and sold you the policy will not help you, then we are happy to introduce you to experts in this business and make an arrangement where these claims can continue to be monitored and managed leading to a good result. In the recent past, broker compensation was largely based on undisclosed premium production commitments and profitability of a book placed with a specific carrier. Now, law enforcement has declared most of those undisclosed compensation schemes to be illegal. The government has levied hundreds of millions of dollars of fines for these practices against almost all the major brokers over the past few years. Best-practices compel a business owner to always know the compensation that a broker receives for placing insurance coverage with a particular carrier. How difficult will it be to become trained on Employers Direct's online Policyholder's Claims & Information Center (PCIC), and should I have any concerns about privacy? PCIC is simple to access, intuitive to use, and highly secure. A toll-free help line is also available. Our customer service representative will deliver all the materials for you to sign up on PCIC immediately after you become a policyholder. The first step is for you to appoint a PCIC Administrator. Then the Employers Direct security administrator will notify that person of your codes. All that is needed is for us to provide a user ID and a password for those individuals who your Administrator has authorized to access the system. We will supply ID's and passwords to get them started. The users can then change ID's and passwords for privacy. To access the system, log in to PCIC at the Employers Direct Information Center online at www.employersdirect.com. Our training CD will get your people up to speed in minutes. |
