Healthcare Workers’ Comp Provides Opportunity for Independent Insurance Agents to Grow
By: John Wildfire, Healthcare Practice Leader, PMC Insurance Group
The PMC Healthcare practice is here to support our agent partners in a variety of ways. Whether we’re consulting on Workers’ Compensation in the Healthcare space or delivering customized solutions to help agents win business, we are talking together every day. Throughout our conversations we have heard recurring questions about important topics, so we compiled them along with some answers and insights that can help you grow your business:
Q: Given that carriers have shied away from nursing homes since the COVID pandemic began and vaccinations are being widely distributed, is now a good time to prospect these businesses?
A: The short answer is ABSOLUTELY! And the reason is two-fold. Firstly, carriers are getting off the sidelines and starting to consider skilled care facilities again. While some are deciding on a trigger event to finalize their decision (most commonly a national vaccination rate percentage or a pattern of reduced positive COVID cases in these facilities) others are already writing them again. Therefore, there are more options in the marketplace than most agents think. Most carriers are not overtly advertising this re-engagement as they are still cautious about the exposure. However, the opportunities with carriers are growing so familiarizing yourself with who is and who isn’t a current player in the space will only ease your sales process and strengthen your opportunity to win.
Secondly, I can tell you that if you are not talking to your nursing home clients or prospects about Workers’ Comp right now, other agents are. For those with familiarity in the space, you know that there is expected expertise for insurance agents who pursue these risks. Given the significant average size of the premiums they pay, these insureds get multitudes of calls from prospective insurance brokers. Because of that, they have high expectations that these agents know about the full array of topics that are plaguing their businesses. Clearly, how to protect, train and retain staff are at the forefront of their minds and that is right behind how to continuously provide safe patient care to their residents. What differentiates the successful brokers in this space from those who are not, is the ability to acknowledge the hottest topics and to have innovative solutions to help handle them while also driving down the total cost. It is infrequent in this space for an agent to win an account only by offering a lower premium option – you need to offer more, and we at PMC Healthcare can help you do that.
Q: How has the frequency of COVID claims recently changed and what do you expect going forward?
A: I would summarize the impact of COVID in the healthcare space as CONTROLLED. What I mean by that is we have essentially eliminated the spikes in outbreaks within healthcare risks that we saw one year ago. Knowledge of how to protect against the virus coupled with the implementation of strong preventative plans to protect employees and patients has contributed to this reduction. That is not to say that we no longer see claims related to the Coronavirus; it does mean that the number of cases proven to be attributable to on-the-job activities has come down significantly. To expand upon that, even in presumptive states, the frequency of claims are tempered and the number of COVID-related claims paid out is fewer than originally expected. Additionally, the severity of claims is still lower than was first anticipated. In many circumstances, incurred expense includes only the cost of a test and potentially some lost time for quarantine. Saying all of this by no means reduces the seriousness of the virus or is meant to demean the threat of spread. However, the more data we continue to gather allows us and the carriers to gain a better understanding of the impact COVID may have on the healthcare business. And what this current data has resulted in is an increased comfort level of many carriers to reenter the space.
Q: Will the COVID pandemic stunt the growth we have seen in the home healthcare space?
A: We do not think so. In fact, early indications tell us quite the opposite. Several data points within our own book lead us to believe the home healthcare industry will thrive beyond COVID. Since the virus spread rapidly in senior care facilities (most notably in nursing homes), more seniors are seeking in-home care than ever before. The number of no-prior, new venture home care agency submissions has increased since one year ago. We see payrolls at the agencies within our book increasing and the number of agencies expanding into additional states is up, as well. At the end of the day, home healthcare is still poised for significant future growth. According to the US Bureau of Labor Statistics employment of home health and personal care aides is projected to grow 34 percent from 2019 to 2029, and more of our carriers are getting back to writing in the space – some very aggressively.
Q: With experts noting a likely shift from care facilities to in-home care, do you anticipate M&A activity to increase?
A: M&A has always been significant in the senior care arena. In general, the costs associated with operating a nursing home (for example) are likely to be significantly greater than running a home health agency. And to that end, increased costs for PPE, employee turnover, and reduced occupancy rates, have led to financial unsurety. That is an opportunity for acquirers who have been through full market cycles before, and it is also an opportunity for insurance agents. If you can position yourself as a business consultant who can provide resources during times of sales, you potentially can gain a new client in the acquirer or seller. Having connections with experts familiar in the space for legal advice, aggregators looking to buy, knowing which of your clients are considering the sale of one or more locations, corporate restructuring experts (to name a few) can open up significant doors within this business. You don’t have to do it for them; an introduction to these experts can lead to terrific referrals.
For those of you who currently entrust your clients’ policies to PMC Healthcare, we thank you for your partnership. If we have not had the opportunity to work together before, I hope we can earn your healthcare business soon. For more information contact me or a member of our Healthcare team at [email protected]
