BrickStreet Mutual Loses Exclusivity to Workers’ Compensation
By Wayne Sheets, Contributing Business WriterThe president and chief executive officer of BrickStreet Mutual Insurance Co. Gregory A. Burton officially acknowledged Monday that his company would no longer have exclusivity to the West Virginia workers' compensation market starting today, when the market opens to other companies.
BrickStreet has held such exclusivity since February 2003, when the West Virginia Legislature chartered the company.
According to Burton, the company is pleased to see competition come into the workers' compensation market. "BrickStreet has experienced some tremendous successes over the past two and one-half years. The reason for these successes were because we restructured our entire organization, which we think will allow us to be poised and ready for the competition as it enters the marketplace. We also think this has put us in a position to know the worker's compensation market better than anyone coming into the West Virginia marketplace," he said.
In his announcement, Burton said that 162 companies have filed applications for and been approved by the Office of the Insurance Commissioner to provide workers' compensation insurance in West Virginia. "This speaks volumes for the job the insurance commissioner, the Governor, the legislature and BrickStreet employees have done to get the market read for competition," Burton said. "I think it shows that companies outside looking in see the state as an attractive market for offering worker's compensation insurance."
According Burton, workers' compensation insurance rates have decreased by 30 percent over the past 2 years, which are now some of the lowest in the nation. "In 2003, West Virginia was ranked in the top five states for having the highest workers' compensation rates. A study conducted by the state of Oregon in 2007 showed that West Virginia was rated in the mid-30s out of the 50 states," he said. "I think once that poll is updated for 2008, it will show West Virginia in the low- to mid-40s, meaning that our rates have improved dramatically. The higher the number of our ranking in this poll, the better. This is one poll where we'd like to be number 50."
Burton also credited the company's "BrickStreet 360" program which focuses on better customer service, efficiency and, above all, the best possible claims management available, as a big factor in its successes. "This new approach has driven down the number of days it takes us to rule on a claim. Now we're right around five days. In other words, from the day we receive that claim to the day we rule whether it is compensable or not, now takes us about five days, or a little less. It has also helped drive down claims,' he said. "In 2003 there were 52,000 claims filed. In 2007 there were 40,500, and it appears that in 2008 we are going to be around that same number."
When the Legislature created the new workers' compensation system, the state approved a $200 million surplus loan for operating costs and the payment of claims. Burton said that they will make a $40 million payment on that loan on July 1 and are negotiating with the Office of the Insurance Commissioner on when it would be best to make an additional $60 million payment. "We have the money available and are waiting for the commissioner to decide when it would be most advantageous for us to make the payment," Burton said.
According to Burton, BrickStreet is trying to pay the loan off prior to Jan. 1, 2009, because at that time the interest rate jumps from its present rate of 1.5 percent to prime.
Burton also noted that BrickStreet has and continues to aggressively combat fraud and abuse. He noted that the fraud unit has saved policyholders $2.3 million since 2006, turning 174 cases over to the insurance commission for possible civil and/or criminal action.
Another point of particular interest, according to Burton, is the return to work program that BrickStreet developed which has cut down the average time of those on temporary total disability by about half. "That means the (injured) employees are getting the care they need quicker and are getting back to work faster than they ever have, which is beneficial to both the worker and the employer," he said.
"We also want everyone to know that BrickStreet has about $1.4 billion in assets invested in West Virginia banks. We have also invested in the communities of Charleston, Wheeling and Martinsburg by establishing offices there," Burton said. "We employ over 450 West Virginians in those communities. We think it's important to be a part of the community, and we've given back substantially in terms of contributions both monetarily and in employee's time to state and local charitable organizations. We think we've been a great partner for West Virginia employers and we hope to continue to do that in the future.
Burton emphasized the large network of agents in West Virginia that are important to BrickStreet as the market opens to the competitive market. "They play a very important role in helping employers determine where they want to put their coverage," he said. "They are there to help employers determine how much insurance they should have and where best to put their coverage."
For information on BrickStreet programs and a listing of appointed agencies and agents, visit www.BrickStreet.com.
