Agent Alert: Direct Selling Comes to Workers Comp
Agents are well aware of the threat presented by direct sellers of personal line insurance. While we need not grace these pages with the names of these competitors, we are all familiar with the friendly gecko (friendly lizard? yeah, right) and the smiling, improbable Flo. It's now time to prepare for direct sales of workers comp insurance. Berkshire Hathaway Direct Insurance Company expects to be licensed in all 50 states by its launch early in 2016.
Direct sales of workers comp may work well with very small businesses: companies with less than $5,500 in premium, below the threshhold for experience rating. But sales to experience-rated insureds will likely prove much more difficult. While coverages are indeed a state-regulated commodity, the complex issues of compensability, class codes and experience rating have carved out a vital space for insurance agents. Businesses carrying this essential line of insurance have learned the value of a "trusted friend" - an agent who is able to guide them through the experience rating and claims processes.
Workers comp tends to be the most expensive line of insurance for businesses. It's complex and, quite often, frustrating; the relationship of losses to costs is not easily understood. All of which adds up to a perfect opportunity for members of the Renaissance Alliance. By providing support throughout the policy year, by tracking experience rating and anticipating problems, by helping insureds and prospects understand and manage losses, agents become an essential part of business operations. There is little to fear from the latest incarnation of Flo and the lizard.
Let's embrace the comp challenge presented by Berkshire Hathaway Direct. Bring It On!
Senior Workers Compensation Consultant