SOURCE: Insurance Solutions Group

August 03, 2006 17:34 ET

ABC Sierra Members Receive $200,000 From Builders Insurance Company

One of Nevada's Largest Workers' Comp Insurers Implements "Retro" Plan to Reward Excellent Safety Records

LAS VEGAS, NV -- (MARKET WIRE) -- August 3, 2006 -- Members of Associated Builders & Contractors Sierra Chapter got more than lunch at the association's July meeting -- 19 Northern Nevada construction company members walked away with fat checks from Builders Insurance Company as part of the workers' comp insurer's "retro" plan. A retrospective rating plan is one in which the employers' actual losses are used to calculate the ultimate premium, according to Ron Landram, ABC's special guest at the luncheon. Landram is Vice President of Risk Services-Nevada, which serves as administrator for Builders Insurance Company, one of the two largest workers' comp providers in Nevada.

"The usual practice in the insurance industry is that the policyholder is given the price at the beginning of the policy's coverage period," Landram said. "In a retro, the final premium price is determined by policyholders' results. No insurance companies are required to offer retro premium programs," Landram pointed out, "but Builders Insurance finds that this is an excellent way of motivating -- and rewarding -- on-the-job safety efforts by employers."

Landram noted that Builders Insurance distinguishes itself by providing workers' comp coverage -- as well as comprehensive safety and fraud-reduction measures -- specifically designed to help participating companies reduce on-the-job injuries, and in doing so, dramatically reduce both workers' comp claims, and the cost of those claims. In doing so, Builders Insurance achieved a loss ratio of just 37% in fiscal year 2005 -- down from 42% a year ago and less than half the national average of 85% for construction industry workers comp claims. Because of this commitment to safety, Builders Insurance is able to offer retro premium programs and other discounts and benefits to policyholders.

By industry standards, the Builders Insurance retro program is very generous. The total return of premiums under this retro program -- in the Reno/Northern Nevada area alone -- was just over $200,000. Half of this total was handed out at the ABC meeting last week -- with the remainder paid of the Reno/Northern Nevada area retro return of premium to be paid out over the next twelve months.

Among the 19 recipient companies honored at the ABC luncheon last week, several Reno-area employers earned substantial returns for keeping their on-the-job injury rates low. Moana Nursery, one of northern Nevada's largest suppliers of landscaping products, left the meeting $32,684 richer; Precision Plumbing & Heating received $23,064, and Artistic Fence got $20,422. In each case, these retro-program rebates rewarded exceptional and effective on-the-job safety programs operated by these companies, and supported through classroom and on-the-job safety training programs by Builders Insurance Company and its administrator, Risk Services-Nevada.

The plan was first put together in 2003 by Wes Ingram of Insurance Solutions Group and Clara Andirola, executive director of ABC Sierra Chapter. Members of the association who signed up for workers' comp with Builders Insurance were invited to join the program, and the disbursements on July 26 reflected results from the 2004-2005 policy year.

Ingram said that ABC Sierra members worked hard to control losses so the program would return as much as it did. "Builders Insurance already offers insurance discounts of 10 to 15 percent for most policies, so it's already extremely competitive," Ingram said. "Now, added to those savings, is the substantial return ABC Sierra members just received. It's amazing."

The Builders Insurance retro program includes all ABC Sierra Chapter members who are also BIC policyholders, as a whole, so losses were tabulated as a group instead of doing so on an individual basis.

"This was one of the reasons the employers saw hefty returns," Landram said. "Normally retro programs like this are reserved for employers who pay more than $100,000 a year," Landram said. "This program gives smaller companies a chance to participate because their premium is added together as if they were one big company."

Some retrospective rating programs offered by carriers set the maximum premium 110 or 120 percent or more, according to Landram, so if the group participant should sustain high losses they could actually pay more than normal modified premium.

"With Builders Insurance, however, under no conditions can you pay more than normal modified premium, based on actual results," Landram said. "This year, the retro return was at 20 percent. Within a couple of years, those who stay in the program long-term could start seeing multiple checks each year."

About Builders Insurance Company

Builders Insurance Company -- BIC -- offers post accident drug testing, back-to-work programs and created a drug-free workplace program to save Nevada's construction companies millions in workers comp costs. More than 1,100 Nevada construction companies look to Builders Insurance to provide comprehensive workers' comp protection to their employees.

Builders Insurance distinguishes itself by providing workers' comp coverage -- as well as comprehensive safety and fraud-reduction measures -- designed to help participating companies reduce on-the-job injuries and reduce workers' comp claims -- and costs. In doing so, Builders Insurance achieved a loss ratio of just 37% in fiscal year 2005 -- down from 42% a year ago and less than half the national average of 85% for construction industry workers comp claims.

Builders Insurance Company is a Nevada domestic insurer wholly owned by Nevada Contractors Insurance Company, Inc., a Nevada captive insurer; in turn, Builders Insurance is the sole owner of Risk Services-Nevada, which provides safety training and claims support for Builders Insurance's more than 1,100 policyholder companies. For more information, please visit the web site at http://www.nevada-comp.com.

Contact Information

  • Contact:
    Tom Wheeler
    Vice-President of Marketing
    Builders Insurance Company, Inc.
    (702) 631-0878