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PROPERTY AND CASUALTY INSURANCE EXPECTATIONS FOR 2012 BY SKIP HOWEY HOWEY & ASSOCIATES, INC. Would you be surprised to hear that you can expect your insurance rates for your Commercial Auto, Cargo, General Liability, Property, Workers’ Compensation, and Umbrella Liability coverages to increase in 2012? Unlike premium reductions you could have seen in the past 8 years of the insurance industry’s “soft” market, this year’s message is the same message you are hearing from other suppliers — prices are increasing, typically at least 3%-8%. In 2011, the insurance industry finished at 110%, which means that for every dollar of premium collected, insurance companies spent $1.10 in expenses. Consider the cost of property repairs from natural disasters throughout the country, costly awards we hear about from auto accidents or work-related injuries, and the price of vehicle repairs from collision losses. Ultimately, those claims and their costs affect all of us. Reinsurance carriers increase their premium to your insurance companies, and State programs, such as the Michigan Catastrophic Claims Association, raise their fees to cover their claim reserves. In addition, while the insurance companies’ costs are rising, their investment income is down, so policyholders feel the pain. The good news is that while everyone’s costs will be affected, you can do something to control your own costs. Now, more than ever, focus should be placed on loss control within your operation. Be pro-active in maintaining a well-trained, informed staff, an engaged work attitude, a consistent, enforced safety program, and involve your insurance company’s loss control specialists. It is estimated that the largest majority of all claims involve human error, which means that proper training is important and should be ongoing, that claims, whether yours, a co-worker’s, or competitor’s, should be profitable learning experiences, and that all employees understand that the effectiveness of your safety program ultimately affects your bottom line and their future as well. You can be on the low end of the premium increase or you can be at the other end of the spectrum; that determination is made by an underwriter who evaluates your company’s claim history and the quality of your safety program. First, the underwriter will determine your company’s basic eligibility, then whether your company is entitled to their best rate, an average rate, or a rate for below-average performance. For example, if a Workers’ Compensation manual rate is $10.00 per $100 of payroll, an excellent experience modification of .75 and discretionary crediting from an underwriter could bring it down to a rate of about $5.60. On the other hand, a poor experience modification, such as 1.40, could result in loss of crediting and a rate of $14.00 or more. A $5.00 rate or a $14.00 rate per $100 of payroll could make a significant difference between your delivery costs and that of your competitors, would you not agree? This is only one example for one of your policies; there are more opportunities available. Apart from an effective loss control and risk management program to help you control your insurance premiums, another important factor is the agent who provides your program. The moving industry has special exposures that merit a specifically designed program by insurance companies who can meet the coverage requirements of the affiliates and deliver it competitively. What that means to you is that your agent needs to know your industry and have the markets that can meet the demands. His/her inexperience in the moving business and/or the lack of insurance markets with whom to place your coverage will work against you. Just as we would recommend a professional mover rather than a neighbor who owns a pickup truck to do a 10-room household move, we would recommend that you entrust your commercial insurance to a professional agent who has the experience, expertise, and markets to handle your needs and your customers’ demands. for more information about howey & associates, inc., SEE AD ON PAGE 10. 6 THE CARRIER
HEALTH INSURANCE INDUSTRY IN TURMOIL BY CHUCK POMERLEAU INDUSTRIAL INSURANCE SERVICES, INC. Group medical insurance coverage is nothing like it used to be. The multitude of healthcare insurance companies, providers and arrangements that employers use to have has vanished, perhaps never to return. The few carriers and providers still offering employer sponsored coverage has dwindled to just a few to say the least. Will the presumed healthcare exchanges, if enacted, save premiums dollars and deliver the quality of healthcare that we all are accustomed to? Doesn’t it seem that all the meddling the government has done over the past few years in healthcare has just cost us more than we ever expected? Is there a future for employer sponsored group medical coverage on a private basis? Our mainstream medical insurance providers can be counted on one hand in today’s Michigan marketplace. Providers such as Blue Cross Blue Shield of Michigan and Blue Care Network, Health Alliance Plan and Alliance Health and Life, Priority Healthcare, McLaren Health Plan and Total Healthcare make up most of all of Michigan’s “managed care” providers. The commercial insurance companies left like United Health Care and Humana and a few others still use “medical underwriting” to qualify applicants with good health in order to issue coverage. A healthcare agent can help employers determine the best arrangement possible for their employees. through all the changes in order to effectively advise their clients. Finding an agent that is qualified and well informed is getting more difficult. There are less agents out there specializing in group health as the market continues to dismantle and escalate in cost. Other employer sponsored benefits continue without regulatory issues. Benefits such as group Term Life, Disability, Dental, Vision and various other medical ancillary products are still being sold on a competitive basis. A good agent is who you can lean on for the best advice and direction when it comes to these benefits for your employees. The future for the group insurance agent has become broader. Whether or not an agent can afford to continue to specialize in group medical care is yet to be seen. My opinions are self observant and reflective on the pasty twenty years of specializing in group medical care. I suspect that there will always be a need for a well informed health insurance agent who has the desire to help their clients and the employees that work for them obtain quality benefits at affordable prices. for more information about industrial insurance services, inc., please SEE AD ON PAGE 12. Will the state’s future “healthcare exchange” offer employees and employers a substantial premium dollar savings and deliver a quality healthcare arrangement? Only time will tell, but history shows us an escalating healthcare cost pushed by governmental regulations. Why would anyone suspect that the newly developed exchange plans be any less costly? I believe that cost will increase for medical care in one form or another. Any premium savings will be short lived as plans mature and claims are incurred. The healthcare exchanges are developed for Michigan and if enacted go into effect on January 1, 2014. The role of the group healthcare agent has changed. Today’s agent takes on the role of a consultant who informs employers and individuals of their options. The agent needs to be able to navigate SECOND Quarter 2012 7
Page 1 and 2: Michigan Movers Association SECOND
Page 3: PRESIDENT’S MESSAGE Dave Morse Mo
Page 8 and 9: WAREHOUSE LIEN FAQ QMust the items
Page 10 and 11: BECOME A MICHIGAN PROMOVER! By now
Page 12 and 13: TARIFF resources The current Tariff
Page 14 and 15: LEGISLATIVE UPDATE MICHIGAN SENATE
Page 16: DISCOUNT ENERGY PROGRAM If your com

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