Case Study

The Client

A large well-established staffing company operating nationally with over $700M in wages.

The Challenge

The staffing company had grown rapidly in preceding years and was struggling with the installation of best practices as well as the workers’ compensation collateral “catch up” associated with rapid growth. They were anticipating an upcoming $300M one-year growth jump and wanted to be scalable to accommodate the increase in volume.

The Solutions

Staffing Company Analytics and Correction

• The risk management, workers’ compensation and underwriting departments, procedures and practices were re-engineered
• The incumbent carrier and history were finitely analyzed to determine the appropriate loss picks and collateral placement
• A third-party actuarial study was conducted to verify the findings
• A strategic exit from the incumbent carrier was designed in order to contain the previously unrecognized collateral effect while also obtaining increased underwriting abilities under the new carrier (allowing a wider array of prospective clients)
• Internal underwriting policies and industry code limitations were put in place to control the risk acceptance during the rapid onset of business
• Risk analytics were designed in order to monitor the risk capacity of the program as new business was being added
• Underwriting metrics were designed to gauge the risk metrics of accepted prospects, acceptance percentages, underwriting assessment ratings, etc. which were coordinated with the sales efforts
• Ultimate cost estimates were monitored and adjusted on an ongoing basis which allowed for pricing arbitrage to be maximized in the sales process (carrier costs vs ultimate costs vs claim cash demand for near future vs billed rates, etc.)
• A company-wide staffing model was created to calibrate major functional areas of responsibility of each department and representative type allowing the objective calculation of needed personnel during rapid growth periods

The Results

• The staffing company did achieve its scalable growth of $300M in one year

• The transition to the new carrier was successful due in part to the carrier’s newly found confidence level associated with the new analytics and controls achieved
• The historical ultimate cost and collateral placements were adjusted appropriately
• The risk and underwriting analytics allowed for measurable and scalable incremental adjustments to be made to company-wide staffing models