Payroll Companies can write it, but I can't?

[AZDave]

Lost a work comp policy today to a payroll company, I think ADP but really doesn't matter. Good for the insured since they took him out of Assigned Risk and he is now with Liberty Mutual. My only market for him was NCCI - new in business June 2017, sewer/water main installation contractor. None of my voluntary markets would offer coverage - it is a tough class with a rate around 7.5% . Estimated $100,000 payroll.

6 months later Liberty Mutual offers coverage just because he is thru a payroll service code? No way they would write it from one of their captive agents. Why do carriers throw their underwriting philosophy's out the door for these scum payroll companies?

 

[Markthebroker]

The cold hard truth of the matter is ADP as a whole probably writes more business than any one broker. Probably more than many brokers put together. So, they let this stuff slide.

Neither you nor I have to like it, but that's the reason.

 

[adjusterjack]

It's not just the payroll companies. Many insurance companies offer lower rates and more liberal underwriting to members of association than a non-member could get by going to the same company through a local agent.

One example is AARP's insurance from the Hartford.

 

[AZDave]

How can one compete against their services? Most companies just do not offer any pay as you go option for work comp premiums, and many don't even offer terms. Leading to audit nightmares for many of these contractors. Such a natural fit for payroll companies to offer the work comp and charge premium only when there is payroll. I can't do that. I know some agents offer payroll services, but how can they offer pay as you go when the carriers need full payment? Premium financed?

Do Liberty/Hartford/Travelers ever say no to the Paychex and ADP's for work comp new business? Will they take any high risk class and offer voluntary rating?

Just can't compete here.

On to the next.....

 

[myfakename]

Every company i have offers billing installments, and i have several now (First Comp, Union Standard, AmTrust +one or two more) that offer payroll reporting. Some (Union Standard) have a minimum premium for payroll reporting, but I did one the other day on FC that was a couple K.

 

[VolAgent]

From conversations with a payroll guy in the past...

Just because the carrier will take the high risk business doesn't mean there isn't a cost. Either the cost has to be passed on to the insured or it can end up tanking the entire pool and enter a death spiral as better risks flee the work comp.

Obviously the larger the pool the more it can absorb a few higher risks, but there is a limit to how much it can absorb.