• Agreement executed and returned to you within 48 hours of receipt
• A short interview is conducted:
  • Introduction of audit team and central point of contact
  • Verification of insurance carriers
  • Verification of rating bureau(s)
  • Review of past and present agent information
  • Verification of insurance plan type
  • Review of state(s) exposure
  • Review any specific client concerns
• Required data is requested:
  • Policy Pages
  • Final Audits
  • Loss Runs
  • Payroll Information
  • Audit team works with client, agent, and/or carrier to obtain required data
• Audit is conducted: 
  • All suspect issues are reviewed and audit trails are followed
  • Claims are investigated
  • Rules, regulations, exceptions, filed plans, policy language, etc. are researched
  • Correction requests are filed
  • Correction requests are expedited through appropriate carrier(s)
  • Corrections and revised premium audit(s) are obtained
  • Refund checks or credits are expedited

Throughout the entire process, we will update you on the status of your audit at least once every 30 days.

Audit duration will depend on the time it takes to obtain the audit data and the complexity of the issues identified. The surest way of reducing the audit time is to provide – or assist in providing – required audit data.

Construction

A construction company contracted with us because they were concerned with increasing costs. Their premiums were increasing even though they had relatively low claims activity. The company’s concerns were valid. Our audit identified carrier errors resulting in inflated premiums. Below are the results of our audit.

09/05/03-04 Original mod rating 1.13 Revised mod rating 1.04 Returned premium $12,441
09/05/04-05 Original mod rating 0.93 Revised mod rating 0.83 Returned premium $14,073
09/05/05-06 Original mod rating 0.96 Revised mod rating 0.85 Returned premium $10,177

This company received a $36,691 refund check from the carrier within 90 days of signing the audit agreement.

Manufacturing

Our client recently purchased a manufacturing plant. Their insurance agent assured them the experience of the new plant was properly reflected on their experience modification factors. After reviewing the experience rating, we discovered the new data was incorrectly reported. As a result of our work, our client received improved experience ratings and refund checks.

01/01/03-04 Original mod rating 1.14 Revised mod rating 0.92 Returned premium $35,313
01/01/04-05 Original mod rating 1.09 Revised mod rating 0.95 Returned premium $15,551
01/01/05-06 Original mod rating 1.06 Revised mod rating 1.00 Returned premium $6,687

The total refund was $57,551

Health Care

We recently conducted an audit for a healthcare company. During the audit, we identified several less than obvious errors. For example, a claim was reported incorrectly on the loss run and on the experience mod worksheet. Consequently, when comparing the loss run to the experience mod worksheet there didn’t appear to be an issue. Only a comprehensive investigation could have revealed the claim had been subrogated. We identified the issue and worked with the carrier to obtain a correction to the experience rating. The corrected experience rating resulted in a premium refund of $31,257.

How do you know if a guaranteed cost plan, loss sensitive plan, deductible plan or self -insurance is best for your company at this particular point in time? Clearly, one plan is not best suited for every company under different market conditions. Does your agent perform an analysis to determine which plan is optimal for you at this point in time? If so, have you reviewed a report? Or, is the decision being made based on opinion without the benefit analysis? Do you know if your agent’s recommendation is based on an analysis or on commissions paid?

Analytical services include sensitivity analysis, plan comparisons, cost allocation, buy sell analysis, and experience modification factor projections.

• Sensitivity analysis are “what if” scenarios.
  • What happens to my experience modification factor if payroll assigned to a specific classification changes?
  • What happens if total claims increase (or decrease) by some amount?
• Plan comparisons
  • At what point is a different insurance plan financially attractive?
  • Is the plan I’m on currently the most attractive going forward?
• Cost allocation
  • Which company, division, state, etc. is experiencing the highest claim experience?
  • Which company, division, state, etc. is experiencing the least claim experience?
  • Is the cost associated with claims experience, safety program, and risk management costs properly reflected in the company, division, state, etc. profit and loss statement.
• Buy/Sell analysis
  • If we purchase a certain company; what will the impact be on our current mod? Future mod?
  • If we sell a company, division, etc; what will the impact on our mod be?
• Mod projections
  • What will our mod be next year assuming certain losses and payroll?

• $585,396.00 for a staffing company
• $298,621.50 for a non-profit organization
• $257,790.00 for an entertainment company
• $233,903.00 for a non-profit organization
• $222,394.00 for a restaurant / night club
• $211,945.00 for a dairy & food specialty company
• $198,899.00 for a staffing company
• $179,876.00 for a livestock company
• $172,403.00 for a race track
• $172,369.00 for a staffing company
• $158,605.00 for a non-profit organization
• $158,454.00 for an aviation services company
• $158,167.00 for a construction company
• $154,957.00 for a manufacturing company
• $152,947.00 for a staffing company
• $149,665.00 for a construction company
• $146,487.00 for a graphics company
• $146,474.00 for a paper company
• $146,031.00 for a non-profit organization
• $142,411.00 for a staffing company
• $130,627.00 for a manufacturing company
• $126,459.00 for an engineering company
• $125,264.00 for a hospital supply distributor
• $122,670.40 for an engineering company
• $116,694.17 for a heating and ventilation company
• $116,659.00 for a distribution company
• $115,193.00 for a decorating company
• $111,579.00 for a staffing company
• $111,992.00 for a staffing company
• $109,054.00 for a staffing company
• $104,620.00 for a parking service
• $97,993.00 for a lumber company
• $94,043.00 for a food service company
• $92,977.00 for a manufacturing company
• $90,260.00 for a non-profit organization
• $89,436.00 for a church & school
• $88,354.00 for a staffing company
• $88,353.00 for a manufacturing company
• $82,944.00 for a financial group
• $81,059.00 for a flooring company

If we didn’t believe the following agents acted in the best interest of their clients, they wouldn’t be on our web site. If you’d like to know how our service helped their clients, or if you want advice on workers’ compensation rates and programs, call the experts we trust.

Jeff Jorgensen, CPCU, CIC

Vice President

Experience:

Jeff began his insurance career in 1987 as an auditor with Allied Insurance Company. He held a variety of underwriting and marketing positions with Allied prior to becoming Marketing Officer in 1996. In this role, he was responsible for overseeing Allied’s sales and marketing efforts in Kansas, Nebraska, South Dakota, North Dakota, Arizona and Texas. He has earned the professional designations of CPCU (Chartered Property and Casualty Underwriter) and CIC (Certified Insurance Counselor). Jeff joined INSPRO in March 2006.

Current:

Jeff is a Vice President of INSPRO, Inc. and is involved in management of the INSPRO Omaha office. His responsibilities also include sales production and service for all lines of insurance.

Personal:

Jeff and his wife Nancy are parents of three children, Megan, Adam and Aaron. Jeff is involved with MDA (Muscular Dystrophy Association) and is a member of Sheridan Lutheran Church. Outside interests include sporting activities, especially basketball and golf.

Contact Information:

INSPRO Omaha
10050 Regency Circle
Suite 101
Omaha, NE 68114

Office Phone: 402-333-5700 ext. 207
Cell Phone: 402-416-4450
Fax: 402-333-0633
E-Mail: jjorgensen@insproins.com
Website: www.insproins.com

—

Neil R. Trout, CPCU, CIC

Vice President

Experience:

Neil began his insurance career in 1992 as an Underwriter with Allied Insurance Company. In 1994, he became a Sales Manager for Allied in Nebraska. In 1999, he accepted the position of Sales Officer with Allied Insurance Company in the Des Moines, IA office, overseeing the sales and marketing efforts for Allied Insurance in Missouri, Tennessee and Georgia. Neil is a graduate of Nebraska Wesleyan University. He has earned his CPCU (Chartered Property and Casualty Underwriter), CIC (Certified Insurance Counselor) and AU (Associate in Underwriting) professional designations. He joined INSPRO in July 2004.

Current:

Neil is a Vice President of INSPRO, Inc. His responsibilities include sales production and service for all lines of insurance in the INSPRO Omaha office.

Personal:

Outside interests include sports, especially basketball and golf. He also enjoys working on the family farm in southeast Nebraska.

Contact Information:

INSPRO Omaha
10050 Regency Circle
Suite 101
Omaha, NE 68114

Office Phone: 402-333-5700 ext. 205
Cell Phone: 402-680-1454
Fax: 402-333-0633
E-Mail: ntrout@insproins.com
Website: www.insproins.com

—

Paul R. Parkert

Property/Casualty Producer

Experience:

28 years experience at INSPRO helping clients in all phases of commercial and personal insurance

Current:

Sales and service for all insurance lines in the Fremont INSPRO office serving eastern Nebraska

Personal:

Paul has served as Chairman of the United Way Area Fund Drive, Chairman of the Fremont Area Diplomats; Member of American Heart Association Board, Member of Fremont Opera House Board and Member of CrimeStoppers Board Paul and his wife Debbie enjoy spending time with their four children and their four grandchildren.

Contact Information:

INSPRO, Inc. – Fremont
100 E 6th St
P.O. Box 689
Fremont, NE 68026-0689

Office: 402.721.9707
Cell: 402.720.2957
Fax: 402.721.2844
Email: pparkert@insproins.com
Website: www.insproins.com

—

Blaine Peters:

Property/Casualty Producer

True North Companies – Illinois office
(414) 906-1777
bpeters@truenorthcompanies.com

Professional Designations:
CIC (Certified Insurance Counselor)
ARM (Associate Risk Management)

Blaine’s expertise is in the area of premium cash flow and partial self-funded plans.

Blaine has helped clients in the construction, transportation, and manufacturing to design and implement cost effective ways to handle their workers’ compensation and liability obligations.

Blaine Graduated from Northwestern University in Evanston, IL and has been a property and casualty producer since 1984.

—

Phil Kuhn

President

Experience:

Phil Kuhn joined The Rockwood Companies as President of Executive Risk Management in July 2006.  Phil adds his 30 years of diverse insurance industry experience and knowledge to The Rockwood Company by serving as one of its Vice Presidents and Corporate Officers. Phil’s clients include; manufacturers, distributors, truckers, contractors, publishers, financial services and property managers. Phil works with national associations, national and international corporations as well as many local businesses.

Current:

Currently pursuing his Certified Risk Manager Designation, Phil, a Certified Insurance Counselor, uses his industry knowledge to help his customers design appropriate insurance and risk management solutions in order to minimize risk and maximize premium savings. Phil understands the risk management process is vital to a client’s long term success.

Personal:

Phil is a member of Michigan State University’s Alumni Association board of directors, a former cub master and assistant scout master, and a member of a numerous community groups.  He is married and proud father of twins.

Contact Information:

Executive Risk Management, Ltd.
3340 Dundee Road
Suite 2C3
Northbrook, IL 60606

Office Phone: 847-656-5685
Alt. Phone: 312-602-5223
Cell Phone: 847-414-4088
Fax: 312-621-2288
E-Mail: pkuhn@executiverm.com
Website: www.executiverm.com

—

Rob Kegley

Partner

Contact Information:

Columbian Agency
1005 West Laraway Road
P.O. Box 39
New Lennox, IL 60451

Office: 815-485-4100
Fax: 815-485-2936
Email: rkegley@columbianagency.com
Website: www.columbianagency.com

Anthony W. Charles

President/CEO

Current:

My goal is to become a part of our client’s management team. My job is to be analytical and diagnostic, to understand the client’s business model. By doing this I can implement strategies that will defer risk, control long term insurance costs and help the client make decisions that will affect their company’s long term financial health.

Industry involvement includes the moving and storage, construction, wholesale building supply and environmental companies.

Personal:

Anthony graduated from New York University with an M.B.A. and is a member of the Utica National Insurance Company Advisory Board

Contact Information:

SCS Insurance Group
11 Grace Avenue Suite 300
Great Neck, NY 11021

Phone: (516) 466-6007 ext 231
Fax: (516) 829-5857
E-mail: acharles@scsinsuranceinc.com
Website: www.scsinsuranceinc.com

There are several companies, agencies, and agents who claim to provide a “mod audit” or “premium audit.” The problem is there are as many definitions of “mod audit” or “premium audit” as there are suppliers of the service. So – how do you know who to hire to determine if your workers’ compensation premiums are correct? Answers to the following questions and application of the following suggestions will help.

Are you considering a company that has ties to the insurance industry?

Are kick-backs involved? That is, is the consultant paying finder’s fees? Is there some other exchange of dollars between the consultant and the agent/agency? If so, conflicts of interest are likely. In my opinion, if an audit isn’t objective – it isn’t an audit. Are you relying on your agent/agency to assure that your premiums are correct? If so, your premiums are probably not correct. I say this for three reasons.

1. I have yet to meet an agent who is also an auditor.
2. I have yet to meet an agent who is knowledgeable in the rules and regulations throughout the country. If you believe they are knowledgeable, give them the very basic test that is provided in my letter titled “Test Question.”
3. In most cases, the agent is paid a commission. Where is his/her incentive?

Does your auditing firm have expertise outside of the insurance industry?

If not, you are probably not getting an objective audit. When I co-founded Synergetic Solutions in 1996, we employed people who were from the insurance industry. Many were long-time underwriters. They were good honest people but I learned that they were so entrenched in the insurance industry’s way of doing business that they were blind to obvious overcharges. We now have thirty employees and plan to expand to between 50 and 75. However, I do not plan on hiring people from the insurance industry for the reasons mentioned above. Instead, we hire bright people with the capacity to audit. Then we teach them how to audit.

Are you hiring an auditing firm or a consultant?

If you need advice on risk management, classifications or claims management a consultant may suffice. However, if you want to know if your premium is correct, if your experience modification factor is correct, or if you’ve overpaid premiums, you need an auditing firm. Expecting a company other than an auditing firm to provide an audit will not result in success – but – would you ever know?

How do I know if a company is an auditing firm or a consultant?

Anyone can claim to provide an audit but an auditing firm will adequately answer all of the following questions.

• Do they have an audit procedure?
• Do they use an audit checklist in combination with their procedures?
• Do they have a quality control process? What percentage of completed audits do they sample?

What about price?

As with most products and services, you get what you pay for. There are companies who offer 30% or 40% contingent fees. Would you rather recover 70% of $5,000 or 50% of $100,000? If all things were equal, the lower contingency fee should decide who you hire. Clearly, all things are not equal.

How do I know who will recover the most money for me?

A reputable auditing firm that has been in business for a reasonable amount of time should be able to provide you with:

• Overall success rates.
• Success rates broken down by category of client. An explanation of the category should be understandable.
• Probability of recovery for accounts similar to yours based on their experience.
• Average recoveries for the profile of accounts similar to yours.
• Largest recovery in each category of clients.
• Number of recoveries exceeding some number – say $100,000.

If such information is not readily available, I question the company’s expertise.

How do I know if the company has a reasonable amount of experience?

Any company can claim to provide a premium audit regardless of their expertise or experience. The following questions will help you to know if the company has a reasonable amount of experience.

• How long has the company been in business?
• How many employees do they have?
• How many clients have they served?
• How many audits have they completed?
• How many audits have they completed in states where you do business?

What are other considerations?

• Does the company utilize its own sales force or does it outsource?
• Check references but remember this is a “happy customer” list.
• Ask the reference about communication. Were they satisfied?
• How long did the audit take?
• Did they assure that the refund was received prior to billing or did they bill prior to the company receiving the benefit?
• Have complaints been registered with the local Better Business Bureau?
• What is the principal’s background?
• What is their experience with state departments of insurance?
• How do they support you if a complaint to a state department of insurance is required?
• How does the company support you if you wish to attend a hearing or pursue legal action?

If a company cannot adequately answer the questions posed in this letter, you are probably not speaking with a professional auditing firm. Our in house sales staff would be happy to answer any of the questions listed above. I think you will like what we have to say.

Please feel free to contact us with any questions or concerns you may have at savings@synergeticsolutions.com or toll free at 800-758-2941.

Test question for those who claim to understand the experience modification factor.

I am absolutely amazed by the number of business people, insurance agents, and insurance brokers that claim to understand the workers’ compensation experience modification factor when they have basic knowledge at best. As a business person, how do you know who to believe? If the supposed “expert” doesn’t really understand the experience modification factor to the degree that they believe they do, can you trust them to assure that your experience modification factor is correct?

Here is one way to check basic knowledge. Consider asking, “What impact would changing payroll from a given classification code to a classification having a lower rate have on future premiums?”

Recently, I spoke at a seminar and asked this question. I even provided multiple choice answers.

1. It would be a good financial decision
2. It would be a bad financial decision
3. I don’t know
4. There isn’t sufficient information given to make the decision

Only one person in the audience had the correct answer even though many of the attendees were claims managers and insurance agents.

It is true that moving payroll from an existing classification to a lower risk classification will reduce current year premiums but it will also put upward pressure on (typically) three future modification factors. The upward pressure on the mods will in turn (typically) put upward pressure on three future premium years. The total cost impact can only be determined by performing an analysis that considers present and future impact of the change. This analysis will require assumptions concerning payroll and incurred losses for future years. Therefore, the answer is, “There isn’t sufficient information given to make the decision.”

The bottom line is – when you have a choice between classifications – don’t limit your analysis to the impact on the current year premium as most companies and agents do. Instead, include the impact on future premiums in your analysis. If your agent, broker, or employee doesn’t understand future impact of the change – you must get qualified help. If you don’t get qualified help, you risk making a costly financial decision.

Please feel free to contact us with any questions or concerns you may have at savings@synergeticsolutions.com or toll free at 800-758-2941.

You can do everything correctly and still be overpaying your workers’ compensation insurance premium.

It is a sad fact, but it is painfully true.

• You can have the best risk management program in your industry and still overpay your insurance premium.
• You can have the most aggressive and effective claims management program in your industry and still overpay your insurance premium.
• You can select the best insurance program for your situation and still overpay your insurance premium.
• You can select the most knowledgeable insurance agent/broker available and still overpay your insurance premium.

How can this happen? It happens all of the time for several reasons.

• Insurance carriers report the payroll and incurred losses directly to the rating association. No entity other than the carrier reviews the reports for accuracy. Who would know if there is an error that is costing you money?
• It is common for individual states to have rules and laws that are not consistent with the national rules. In such cases, carriers may not be aware of the rule and therefore may overcharge you. Who would know the difference?
• Underwriters are not expert on every rule and exception that exists in every state. Carriers make a great number of errors that go undetected.
• Carriers are typically required to file plans with the departments of insurance in the states where they do business. However, carriers do not always comply with their filed and approved plans. How would you know if they didn’t comply?
• The civil servants in your State Departments of Insurance that are given responsibility for assuring that insurance carriers comply with state rules are typically understaffed. State Departments of Insurance, in my experience, are ineffective in enforcing the national and state rules. In our experience, they are also ineffective in assuring that the carriers comply with their filed plans.

The bottom line is: An audit of your workers’ compensation insurance premiums by an independent auditing firm must be an integral component of your workers’ compensation program if you wish to control your costs. Such an audit can provide you with the tools that you need to identify and recover overpaid premiums.

Our experience says that – in most cases – if you pay more than $100,000 for workers’ compensation insurance, have experience modification factors that exceed 1.00, and are on a fully guaranteed cost plan, the probability that you have overpaid your insurance premiums approaches 70%.

If this angers you, contact us. You need not be held hostage. We can help.

Please feel free to contact us with any questions or concerns you may have at savings@synergeticsolutions.com or toll free at 800-758-2941.

Are your employees and/or insurance agents assuring the accuracy of your premiums?

Many companies believe that their employees are assuring that their premiums are correct. I must warn you that if you expect your employees to assure that you aren’t overpaying your premiums- you are expecting too much.

Your staff is likely doing everything in their power to assure that you aren’t overpaying – but trying isn’t enough. Your employees who are responsible for monitoring your workers’ compensation costs aren’t trained auditors anymore than they are trained attorneys or CPAs. If employees were capable of getting the job done, we wouldn’t have recovered millions of dollars for our clients and our probability of recovery wouldn’t be over 70% in many categories. In addition to exceptional recovery rates, our recoveries are significant. It is not uncommon for our identified recoveries to exceed $100,000.

Many companies understand that their employees can’t be expected to assure that they aren’t overpaying premiums but they do expect their insurance agent or broker to be the watchdog. Again, I must warn you that if you expect your insurance agent to recover overpaid premiums – you are expecting too much.

Your insurance agent is also likely doing everything in his or her power to assure that you aren’t overpaying – but agents aren’t trained auditors anymore than your employees are. If agents did what we do, would some of the best agencies and brokerage houses introduce us to their clients? Would our recovery rates be as high as they are regardless of agent involvement?

In some cases, employees or agents don’t want us to do the audit. Is it because they truly believe that they are able to do what we do? Is it because they are concerned that we will recover money and by doing so make them look bad?

I must leave the answers to the questions posed in the previous paragraph to you. However, I can tell you that if you pay more than $100,000 in workers’ compensation insurance premium, have experience modification factors above 1.00, and are on a fully guaranteed cost plan, the probability that we will recover money for you exceeds 70%. This fact is true regardless of the involvement of your employees or your insurance agent. If you have credit mod factors, the probability of recovery is also very high.

If you still believe that your staff and/or agent is assuring that you aren’t overpaying your premiums, please give us a call we’ll explain why it is next to impossible for anyone other than a trained auditor – who is expert in the national rules and who is current in state exceptions – to effectively audit premiums.

Please feel free to contact us with any questions or concerns you may have at savings@synergeticsolutions.com or toll free at 800-758-2941.