workers compensation alternative for high hazard, high x-mod, distressed risks

I want to let you in on a little secretthat most agents are not aware of.

I want to tell you about an opportunitythat supports retail agents and helps them fromfalling into the… “ME TOO” … predicament faced by most non-incumbent agents when it comes to prospecting for new workers’ comp accounts.

In Just Under 25 Minutesyou will be in the know.

This information may help anyhard working,smart, and creative broker or insurance agent… win more high revenue business while increasing their closing ratios…

Background…with ADP and Paychex… Kurt Salmon Consulting… I worked for Allianz Group…PEO Professionals, Atlas General Insurance… Education wise… MBA, MA etc. Licensed P&C/Life & Health agent.

AND …When I say higher revenue accounts… I mean accounts with a median annual workers’comp premium over $125,000 per year. (range is $50,000 to over $1,000,000)

Resulting in compensation pay outs averagingover $12,000 per new client. (range is $5,000 to over $100,000)

IMAGINEClosing 1 new account per month…And adding over $150,000 in REVENUEto your bottom line…

That’s $1,500,000 in workers’ comp premiums! Not to mention revenue generated from cross-sell opportunities for General Liability, Commercial Auto etc.

Here is what we recommend…

First, we need to show you how toredirect marketing activities in a path with less competition andwith less buying resistance….

Second, we need to inform and train youon a solution that delivers pricing results and that assists in generating more positive buying decisions… We help you get to the “yes.”

In most situations, the market we representis still open.

Enabling YOU … the “hunter”

to have a great shot at winningnew … high revenue … and high commissionaccounts.

SITUATION: Let’s face it… clean risks with low to moderate X-Mods with premiums in the $50,000 to $500,000 range are highly sought-after by insurance agents that operate both within your state on a local or regional basis ANDwith savvy out of state “poachers” thatare proficient at making sales “virtually” overthe phone… taking advantage of technology.

In fact, an insured may be working with multiple agencies, upwards of 4 to 6 in some situations, seeking to secure quotes from several insurance carriers in order to assure access to the lowest rates.

PROBLEM:The chances of winning new business IS (or at the VERY LEAST) FEELS practically impossible.

We all know that the best chance of winning is to be the first to meet with the prospect, and then to blanket the market to reserve all the possible “viable” carriers…

But how often are you the first one in the account?

Usually the incumbent agent controls the account and has first shot at covering most of the

viable comp markets.

IMPLICATION:Most retail agencies boast of a90% retention Or BETTER for their current clients.

And industry figures back up this number.

Plus …most agencies have access through a directappointment and or via a wholesaler to nearly ALL the standard markets under the SUN; placing most brokers in the “Me too” categorypreviously mentioned…

Leaving them with absolutely no differentiation from the rest of the pack.

What this means is…YOU have a 10 percent chance or less …

of securing business away from the incumbent agent.

More specifically, you need ten (10) or moreaccounts in “the hopper” each month in orderto make at least (1) sale. And if your not laserFocused on the types of accounts you target,That (1) sale may not be enough to put bread on the table.

That’s a lot of busy work for nothing.

What you NEED:is a viable market that most agents are not aware of.

Something truly unique.

Some believe chasing more opportunities is the key to generating more revenue.

Research shows there's a smarter way to achieve better win rates.

Target the Right Opportunities

Sales involves thought and action.

Good salespeople like to innovate, coming up with great ideas and strategies for turning those ideas into reality.

Has your agency defined Specific criteria of an acceptable prospect for your company?

What you need is a market

that serves an UNDERSERVED andspecific NICHE of risk or account …

That also pays a sizable commission (say over$12,000 per sale) (range is $5k-$100k per sale)

Thus making it worth your time and effort…

AND because of the risk’s unique attributes …

most agents stay away from approaching such risks if they are aware of all the typical warts…

They believe this due to their inaccurate acceptance that there are NO viable markets that would write these types of accounts.

AND because incumbent agents whorenew these types accounts… year after year… believe they have the only viable market already covered…

they often fall asleep at the wheel leaving our market wide open to “take” their account away!

And we shall discuss how you can take advantage of this environment during this presentation.

PAYOFF:It’s pretty obvious that if you had access to a specific market …that most agents were not aware of … AND if this market can make good on its claims that it could save specific accounts … with specific attributes 10 to 25% …or more from their renewal premiums …

And at the same timeenable insured's to keep their out of pocket renewal costs down by as much as 30 to 60% … helping to preserve capital and free up cash flow…

…that you might have a pretty good chance of …increasing your close ratios … stacking the odds in your favor … and generating MORE… and HIGHER revenue business for both you and your agency.

So by now you might be wondering what theattributes of an account that we recommendthat you target ARE… Am I right?

Agents that adhere to pursuing accounts with the following attributes to be revealed… 1) increase their success rate of placing new business… 2) reduce non-productive meetings with low percentage prospects… and 3) enables them to be in a position to offer the best pricing advantage possible to win the business.

ATTRIBUTE #1

The first attribute is a high X-mod.That’s right I said a “high X-Mod.”

More specifically, an X-Mod between180 and 300. Our program wants accountswith premiums… They want “rate” for therisk.

In contrast, a low x-mod account does notWork as well. Primarily because we do not havethe pricing arbitrage or advantage with lowerX-Mod accounts between 130 and 179 …

There are some exceptions to this rule inAttribute #2 and 3.

ATTRIBUTE #2 When x-mods are 180+The governing class code… the code withthe most payroll MUST be at least $9.00per $100 before applying the x-mod and anyother debits or credits.

We are looking for “bill rates” of at least$12 per $100 at the very minimum … andIdeally bill rates of $16 per $100 in orderto accelerate our pricing advantage.

ATTRIBUTE #2 When x-mods are 130-179

The base rate needs to be $11.00 per $100for the governing class code…

Or in contrast if the base rate is under $7-8before applying the x-mod … we need areally high x-mod in the 200+ range.

ATTRIBUTE #3They are currently insured with, and orfind themselves no other options otherthan the costly State Compensation Fund (SCF)and or one ofthe Assigned Risk Pool carriers.

If the risk is stuck with these programsOf last resort … then we can look at riskswith X-Mods as low as 130 because theyHave no options and the filed rates areusually higher than most markets.

Under these circumstances, we regain some of our pricing advantageWith lower x-mod accounts (130-179).

ATTRIBUTE #4The account must have proper wage distribution.

That means that low rateclass codes (codes with base rates from under$1 up to $5) must not exceed 30 percentof the gross wages…

For example, an account with $1,000,000in annual gross wages should NOT HAVE more than $300,000 in wages assigned to codes such asclerical and sales codes that have very low base rates.

Lopsided accounts lose their pricing advantage once low rate wages exceed 30% in most situations…Caveat… unless the x-mod is between 200-300.Then it is possible to recapture our advantage.

Accounts with base rate codes greater than $20per $100 may also exceed the 30% ratio in someinstances.

This means that 70% of the wages SHOULDBE high rate class codes, and 30% of thewages can be of the lower rate class codes.

ATTRIBUTE #5Accounts must meet specific wage andlabor attributes… More specifically, no more than 30% of the staff may be part-time (including seasonal). And the median wage of the governing class code must be close to $26,000 a year per employee.

Other class codes may be lower. But the governing class code should be close to $26,000.

The only exception related to the part-timeand seasonal labor attribute is for staffingcompanies.

Staffing firms may have a higher rate ofpart-time labor. And they may have a lowerrate of pay than prescribed.

Caveat: The only exception related to the $26,000 median wage for employees in the high rate governing class code is for trucking risks.

The minimum annual wage for truckingAnd transportation is $36,000 per year.

ATTRIBUTE #6The best industries to target are trucking,transportation, heavy construction, foodmanufacturing, landscaping, tree trimming,janitorial, building operations, recycling,framing, concrete, HVAC/sheet metal, pest control, staffing, electrical, furniture movers, parcel delivery, conduit construction, debris removal, refuse, and artisan contractors.

* Partial list

ATTRIBUTE #7The basis for success in this program is beingAble to save clients 10-25% and reducing theirout of pocket expense 30 to 60%.

Hence, the seventh attribute we look for is premium size. An account with a renewal premium of $50,000 is a good starting point; however ideal accounts are in the $75,000 to $500,000 range.

I will note here that accounts with…USL&H, emergency services, race tracks & stables, roofing, armed guards, explosives manufacturing, and hazardous waste… Including asbestos and mold remediation…

ARE excluded risks.

On a high note we CAN review and possibly write…

accounts that have been non-renewed, cancelled, have gaps in coverage, and or are currently uninsured.

So now you know the attributes of therisks you should target…High X-Mod (180-300), SCF or Assigned Risk Pool,High Base Rate, with$50-500k in premiums.

Traditionally… the only way to win such accountsaway from an incumbent agent is to BOR it away… And that’s not always easy. And it’s not a goodlong term marketing strategy.

So now let’s review the “practical” marketthat writes such risks…and is more often than not… able to deliver a meaningful savings and renewal savings advantage.

FACT #1Depending on the state where the insuredis headquartered, the workers comp coverageis provided by an AM Best “A” (VIII) and or AM Best “A-” (VII) Rated carrier. The programhas over 4,000 covered accounts … providingprotection to over 70,000 work-site employees.The combined workers comp premiums exceeds$300,000,000 per year based on over $2B inreported wages.

FACT #2Aside from meaningful savings… and “A” rated Workers comp protection delivered on a pay go basis, the program offers additional benefits such as: aggressive claims management, a return to work program, loss control & risk management support, legal and HR services, and payroll & tax services. Often times thesebenefits help to increase the client savingsbeyond the 10 to 25% claims we make.

WE GET ITWe understand that most brokers are skepticalabout promoting a program that mandates theusage of payroll & tax services under anemployer services arrangement. It’s completelynormal and understandable. But don’t let thatbe the only reason preventing you from taking advantage of this opportunity… because you might be sorry you did.

PROGRAM FACTOIDOver the past 24 months the program hasbrought on over 600 new accounts in Californiaand has exceeded $60,000,000 of in forceworkers comp premiums in the state.

85% of the business ($51M / 510 accounts) was brought to the program by NON-INCUMBENT AGENTS. What’s silly is, many brokers in the state who lost accounts where aware of this very program but decided ON THEIR OWN AND FOR THEIR CLIENT that this program would not be viable due to the requirement for payroll & tax service.

And boy where they wrong!

I am not saying that ALL prospects will turn a blind eye to the component of payroll and tax… because some will still simply refuse to choose our program because of it.

But more than a majority WILL SAY “YES”If they meet the primary attributes of a target account. Business owners seeking a way to be more competitive, grow their business, maintain or increase profit margins, reduce expenditures, etc… WILL SAY “YES.”

Would you agree … if a client is going to say “Yes” to this program… shouldn’t they say “YES” to you?

You bet! Of course they should.

For example, I spoke with an incumbent agent that had a nursery risk with some trucking exposure with an expiring premium of just over $220,000. The X-mod went down 10 points for the renewal but it was still high. The renewal quote was for $330,000 requiring nearly $50,000 in out of pocket costs at renewal. The broker assured his client that no other viable markets came to the table or where out there…

I later found out that the client was in a frenzy… He personally thought since his x-mod went down 10 points that he would pay less at renewal. He could not believe that no other options were available. He was truly … what we call…“distressed.” He was ready and willing to listen to viable options should one present itself…

I told this broker we could help… and save the client money. But the broker rejectedmy offer based on his perception that the client would never say “YES” to a program like this. Because in HIS mind, the client was in love with his payroll serviceprovider. So the broker never submitted the account for us to underwrite and quote.

That was an EPIC mistake!!! A BIG ONEThat cost the agent a client he had for nearly 10 years … worth over $22,000 in workers comp revenue per year!!

The story does not end there…

3 Days prior to the policy effective date Ireceived a submission from a different broker for this very same risk!!!

We ended up writing the account for $110,000 less than the renewal quote.

And the out of pocket renewal cost was under $10,000 improving the clients cash flow by over $40,000 at the policy renewal.

More over…the client was also over joyed to learn that he was going to be able to terminatehis payroll and tax provider that was also doing some light HR and legal for him; thus saving him another $20,000 a year!

He definitely was not IN LOVE with his payroll provider when he learned of the additional “wind fall” savings.

How do you think the incumbent agent felt?

Incumbent Agent

How about the “winning” agent???

$20,000 in revenue happier!

So what are YOU going to do now?

SUGGESTION:If you have a risk that meets our criteriawhether you are the incumbent or not, I suggest that you consider working with us.

Cover your bases if you’re the incumbentand increase your chances of success ifyour not.

Alternative Risk Marketing is 1 of 10 access points to this unique program.

With that said, we are the only access point that dedicates close to 100% of our resources supporting ONLY this program.

• Set the ground work for this program in California back in 2009

• Designed the marketing collateral and pricing calculator for this program (proposals)

• Major contributor that helped define the program over the past few years to help make it a success both here in California and other states…

• Have connections with underwriting and the program manager executives.

• Aggressive compensation.

Ronnie & Rob

Our Commitment

• Support you through the entire process

• Provide training resources throughout our website so you can become proficient at marketing this program

• Fast turn around of rate quotes (3 to 5 business days) on complete submissions.

• Treat you like an adult

• You will never be alone• Work with you to get

the pricing needed to win the deal (as long as it makes sense)

Our objective as a training company is to not only provide products and ideas… we will also be developing “premium training” and resources …

… that will teach you step by step how to generate and approach Qualified leads (on your own) specifically for this program… AND

We are in the process of developing premium training which includes scripts, and marketing samples.

Doesn’t it make sense to work with the best?

Marketing Business Agency Leadership Award – Outstanding Performance

States of Operation

Our office focuses on the following markets: California, Arizona, Illinois, North Carolina, New Jersey, Virginia, Pennsylvania, and New York

Submitting business is simple.

Once you have completed your pre-appointment form at our website you can start submitting immediately.

WHAT WE NEED TO RESERVE AND QOUTE:We will need a completed Acord 130 completeWith FEIN, class codes, wages, and mostImportantly… we need employee counts.

We also need a supplemental application. Any will do.

X-Mod Sheet with newly published X-Mod.

We need 3 years of currently valued loss runs(within 60 days from effective date and 90 days in CA). If years 4 and 5 have good losses(meaning low losses), send those in too.

Please either click the “Get Started”button above that will take you to our website so you can complete The pre-appointment form…

or visit us now at www.AltRisk.net to getstarted.

Thank you for your time and for joining us!