Rob Oates is the Director of Carrier Relations at InterWest Insurance Services, and current President of the Independent Insurance Agents and Brokers of California. IIABCal is the state’s leading trade association, representing independent insurance agents and insurance brokers throughout the Golden State.
IIABCal is the only agent-broker association in California that has full-time advocacy representation for legislative, regulatory, and judicial matters. In addition to advocacy representation, IIABCal offers members the latest in news and information, networking events, Professional Development and Continuing Education opportunities, and exclusive market access. The association is headquartered in Pleasanton, California.
State Fund: What is the current state of the worker’s compensation market in California?
Rob: In my 17 years in the market, I think this year has been the most competitive I have ever seen. I think carriers are looking to retain their renewals because it is so hard to write new business. I think everybody is out there trying to hold on to what they’ve got, as well as be strategic about finding new business. It is extremely competitive from a carrier and premium standpoint.
While it seems it benefits our clients when there is a big price reduction, I think consistency is more what they are looking for. Business owners can plan for consistency year after year, versus the high costs of one year and the low costs of the next.
In fact, I think keeping pricing low year after year is important, but also what the clients are paying for is the claims management and the consistency in claims quality…knowing what to expect, how it’s going to be handled, and knowing whether the carrier is going to get the injured worker back to work. I think the question of how we get that employee back to work is forgotten sometimes.
State Fund: How is the worker’s compensation industry innovating?
Rob: Business owners are managing risk more effectively. For example, wearable technology is helping to innovate in a couple of ways. This technology can be found in clothing such as wearing gloves that detect how an employee is lifting heavy objects, or use of a body heat monitors that work for agricultural employees in order to avert heat illness.
Insurance carriers are also using data analytics to help innovate the underwriting process. A lot of the initial work with online raters has been shifted to the broker and now brokers are able to enter some of the information. Even more, a lot data can be pulled from third party sources which will help to reduce the keying that an online broker must do and verification of the information can be performed on the back end.
State Fund: What does State Fund mean to your business?
Rob: I think State Fund is very important. Having a quasi-state run organization helps everyone be more competitive. This does not just apply to the private carriers, but State Fund as well. I think having a healthy State Fund is beneficial to the industry as a whole.
State Fund: How has State Fund evolved in the market?
Rob: State Fund made significant changes in the past several years to be more client and broker-centered. I think its ability to go from two regions to four with regional vice presidents who can help bring relationships back is vital—because it is about relationships.
Brokers are not going to place their most important clients with a carrier that they do not have a good relationship with. That relationship can be used or not used, but if some issue comes up, the broker wants to know they can go back to somebody at State Fund and make their case. Whether the broker is right or wrong does not matter as much as not having the response be ‘black or white,’ with the carrier sticking to guidelines, or ‘saying that’s all it can do for you.’
Another thing from an underwriting standpoint is that State Fund underwriters are re-engaging in looking for business – it is the same with their renewals. They are asking ‘what can I do to retain this business?’ Obviously within the State Fund pricing models, but they also seem to be asking ‘where do I need to be to retain this risk?’
That is also beneficial to our clients and to brokers because we get the consistency we are looking for. We know the tiering structure. We know typically where the price will come in. We do not get those high highs and those low lows. It’s not like we place it one year and move it the next. That’s not a typical broker’s approach.