This National Insurance Wholesaler Tripled Its Written Premium in Under 4 Years

Worldwide Facilities tripled in size in the past three years through acquisitions, organic growth and recruitment.
By: | November 14, 2018 • 8 min read

In October, the national wholesaler MGA and programs manager Worldwide Facilities announced an organizational restructuring. The company is now organized into three divisions: Worldwide Brokerage, Worldwide MGA and Worldwide Programs.

Advertisement




As part of the restructure, Eric Stuckman was promoted to president — Worldwide Brokerage and Hank Haldeman takes over as president — Worldwide Programs. Risk & Insurance® caught up with Mr. Haldeman recently to get his views on his new position and the company’s prospects overall.

R&I: For starters, Hank, how about giving us an overview of the company and recent developments?

Hank Haldeman: Maybe I’ll start with discussing that Worldwide Facilities over the past three or four years has undergone a significant expansion from being about a $500 million company in premium to something that is over triple that. It has done that through a combination of organic growth and recruitment and of course acquisitions.

And in that process the company has also diversified from being predominantly a wholesale broker; the business is still wholesale in that all of our business goes through retail insurance brokers, but we are now diversified into the MGA space as well as the specialty programs space.

Having done so, we have announced a structural reorganization that divided the company into three segments, reflecting those three aspects of the wholesale channel. Those being individual risk wholesale brokerage, secondly the contract underwriting that characterizes the MGA business and then thirdly specialty program. By that I mean national or larger regional exclusive programs with a real specialty focus. And with that reorganization, the company has asked me to take charge of the program side of the business.

Hank Haldeman, president — Worldwide Programs, Worldwide Facilities

I came over to Worldwide via the acquisition of the Sullivan Group this April. A large part of the activity within the Sullivan Group was in the program side of the business. But we also had MGA activity and meaningful wholesale activity. With the addition of the Sullivan programs Worldwide Facilities now has up to six separate program manager operations with about 30 distinct programs within those operations. It’s now something with more than $300 million in program premium, so it has become a meaningful practice.

R&I: We see a lot of data about growth in the program sector. Why do you think programs are doing so well these days?

HH: I think there is a growing recognition of the power that a program manager can bring to a homogeneous segment of the business. That homogeneity may be a deep and specialized knowledge of a particular industry or it could be some deep and specialized knowledge of a coverage; sometimes it is the intersection of the two.

But it’s the ability to focus distribution and underwriting on a segment of the business that is distinct and separate, and that allows an insurer to target that business in a much more competitive fashion. In that sense, the program manager will align with the retail agents and brokers who specialize in that kind of business and establish a rapport and understanding of what the appetites are and what the drivers are.

It leads to an enhancement of loss control and other risk management within that particular industry segment, and you end up with higher quote to bind ratios as well as generally improved loss experiences.

So, it is proving itself a channel of distribution for the insurers and meanwhile creates an opportunity for entrepreneurs in the program management space to take advantage of the expertise that they have developed and the underwriting knowledge that they have developed. It is a real fortunate confluence of things allowing an individual or a team to be entrepreneurs and run their own business as a program manager and reap the financial benefits of that and, at the same time, delivering greater efficiency and profitability for the insurers so everybody benefits from it.

R&I: Can you give us an idea of the types of program business Worldwide Facilities underwrites?

HH: Our programs are fairly widespread throughout the industry in terms of the opportunities and our involvement in them.

If you look at Worldwide Facilities, the programs tend to clump around a few industries or coverages. We have a couple of very significant management liability programs. They are different from each other but both are in the management liability space. We are very active in the transportation space but with very specialized niches within it,  as opposed to generalized commercial auto or generalized trucking.

Then we have a couple of programs focused on a niche in the onshore energy industry. We also have an interesting niche, which is focused on auto dismantlers and scrap metal dealers which are a couple of players in the vertical of what happens to old autos that are no longer on the road. That’s a pretty interesting space for us. So, you can specialize in each of those industries and they are really in many ways dissimilar from each other. But each is an operational niche within a larger segment of our economy.

Advertisement




Out of our Savannah office, which is branded Trinity Underwriting Managers, or TUMI, we have several key programs. One is for tow truck operators. One is for intermodal trucking. One is for gravel haulers, (dump trucks that haul gravel) and another is for auto repossesors. Those are four distinct segments, and if you look at each of those segments, when you look at how the insurance industry performs in those segments, it has been challenged. But they have generally been handled by larger or more diversified transportation underwriting operations. When you focus on a particular industry segment and understand that risk management can drive profitability in those industries, you can put together an underwriting portfolio that is profitable in a space that is generally unprofitable.

R&I: We see that you are involved in underwriting nutraceuticals, cannabis included.  Can you tell us what your appetite is for that industry, what you will underwrite and what you don’t have an appetite for at this point?

HH: To some degree, certainly, the underwriting appetite is reflective of the insurers as much as it is the intermediaries.

The fact is that we are all just learning about this industry. I think the odds are that the concerns about risks come from the unknowns and from the fact that this is essentially an industry that has moved from illegitimacy to legitimacy. That probably means the underwriting appetites and pricing will bear toward the conservative.

I think it is a matter for us of partnering with markets willing to take a look at an emerging industry — one that does not have true data and experience relevant to the industry itself.

To engage in insuring the industry, finding out what the drivers are and remaining alert to developments that would indicate a hot point in the business, we must otherwise recognize that there is a substantial economy growing up around cannabis and that it is and should be insurable. It’s the pioneers that are going to be in a position to enjoy growth and hopefully profitability while this industry expands.

R&I: What’s exciting about this restructuring, Hank? Where do you see the upside for the company?

HH: Worldwide Facilities has a fairly unique opportunity, given the size we are and the way we are organized now, to really do something different in the program and product development space than you generally see in the business. We are wholesalers, not retailers, which puts us in a different position with our insurance partners in terms of developing products or coalescing books of business.

Now we have enough scale as a program manager to establish broader-based relationships with the insurers that write program business, which allows us a bit of freedom to develop new programs because they are part of the overall relationships and not having to stand truly on their own in terms of profitability.

That has been one of the barriers to the development of new programs. You see some of the larger diversified program managers being able to bring new programs to market, substantially more so than some of the smaller and single industry program managers. We now have that kind of a position.

On top of that, we have a very large national wholesale broker operation and an MGA operation with access to a lot of different blocks of business. That gives us the ability to analyze those blocks of business and see if there are opportunities to coalesce some of those books of business in programs, allowing us to deliver more focused or responsive coverage or better priced coverage for our retail customers.

Advertisement




You don’t see many operations that have the same scale in program management and in wholesale brokerage and MGA. When you do, they often are totally separate independent silos. The new president of Worldwide Brokerage, Eric Stuckman, is in an office about five feet from mine. We can sit and talk about how programs can serve to provide products to the retail base and ultimately the customers of the brokerage side of our business. And we can collaborate on that kind of business and find ways not just to grow premium and revenue for Worldwide but also to grow product and capabilities that we can offer our retail client base.

R&I: When you look at your career and where you are now, what’s exciting about this personally?

HH: I have to say I am really excited to be a part of Worldwide Facilities. I know the senior management here and have known them my entire career. We have always seen the business similarly, always been driven by similar outlooks. It is just a unique opportunity in my mind to combine something that is still small enough to have entrepreneurialism within it but has scale to be relevant and competitive in today’s industry. &

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

Advertisement




That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

Advertisement




Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]