Accident and Health Insurance: What Schools, Colleges and Universities Looking to Bolster Their Coverage Need to Know
When it comes to choosing the right accident and health coverage for a school or higher education facility, there are several components to review. That’s because accident and health can refer to a number of different things.
“It can include employee benefits, health insurance, disability, dental and vision. It can include accident insurance for a whole host of different types of groups that are not employee/employer related,” said Michael Flood, Vice President, Accident & Health Division, Philadelphia Insurance Companies.
Within that non-employee/employer related bubble, accident and health can be broken down further into three major categories: participant accident, student accident and intercollegiate sports accident.
Participant accident pertains to coverage offered to nonprofit organizations that employ volunteers who don’t fall under a traditional workers’ compensation policy as well as a host of other non-school based organizations that sponsor activities such as camps & clinics, childcare facilities and special events. Student and intercollegiate sports accident both provide a level of coverage for students injured while participating in school-sponsored activities and sports.
“That first category, the participant accident category, is a highly profitable niche. The loss ratios tend to be quite low.” Flood explained. “For the K-12 and college and university student accident segments, claim frequency is higher. The seriousness of claims, especially for high school and college sports, also tends to be more serious. Due to the higher frequency and severity, the margins are tighter.”
The intercollegiate sport accident exposure is the most difficult to underwrite. Claim activity is the most volatile and loss ratios can be exceedingly high.
For schools and higher education facilities looking for accident and health products, here’s an overview of where the market stands and how organizations, especially schools, can benefit.
An Overview of the Accident & Health Insurance Market
Looking at the accident and health market, Flood said capacity tends to fluctuate every five years.
“Carriers get in and out of the business,” he explained. “There are a few hardcore mainstays that have been in the business for many, many years, and then there are new entrants and a few exits every four to five years.”
Philadelphia Insurance Companies (PHLY) has been in the accident and health business for seven years, with plans on staying for the long-term.
“New entrants and carriers that exit within that five-year bracket tend to leave the market because they don’t understand the business well,” said Flood. What has helped PHLY stand strong is its deep roots in property/casualty and general liability insurance.
“The basis for the purchase of this product is linked to property and casualty and, specifically, general liability,” Flood said. “Within our property and casualty company, we insure private schools on the K-12 level and then small- to mid-size colleges and universities. Along with that property and casualty offering, we can incorporate the accident and health business as well, as well as a very robust risk management process.”
“We can rely on and take pride in our suite of risk management services. PHLY’s strong property and casualty background complements our A&H offerings,” Flood said.
The Risk Areas Where Accident and Health Come into Play
As mentioned, team sports are one of the biggest claims drivers for accident and health in schools.
Flood said this can be even more pronounced for grades K-12: “although we see very serious injuries in the college sports segment, we tend to see an even greater frequency of very serious accidents on the high school sports level, because the athletes’ size and weight can vary more.”
For example, a high school footballer who is a senior could easily outweigh a high school freshman by as much as 100 pounds. In college, there tends to be more uniformity, because the athletes are all past the age of maturity.
“That size differential in high school can really create situations where you have serious injuries,” Flood explained.
Off the field, students can fall victim to other risks. While less frequent, non-sport extracurricular activities are an important exposure to consider. Regrettably, fighting amongst students can lead to physical altercations and school shootings are also terrible events impacting the overall school safety environment. Accident and health insurance can aid in the costs associated with medical treatment and accidental death benefits that might be necessary.
“Parents often look at the school as the responsible party when a child is injured,” said Flood. “And because of this, it’s all the more important for these organizations to have not only adequate liability insurance but also accident insurance coverage.
Why Partnering with Educated Agents Is a Must
One key aspect schools and other educational institutions should be on the lookout for when it comes to their accident and health needs is partnerships with agents who know exactly what they require.
“For a cover like this, it’s all well and good to have agents who can talk about and sell accident insurance,” Flood said, “but there is a need that I’ve seen, in the last 10 to 20 years, for more education on this type of insurance.”
It’s key to find agents not only willing to discuss the product, but also ones who are willing to dive in and understand the ins and outs of the product and how they align with their clients’ needs.
At PHLY, “our underwriting team has worked hard to be available and can spend extensive periods of time on the phone with agents in order to make sure they can relay the most accurate and helpful information to their client about our coverage,” Flood said.
It is in this practice that Flood and the PHLY team are able to not only underwrite accident and health for clients but also ensure what they are providing is the best fit as well.
Once an educational institution decides on procuring accident and health coverage, the next question should be which insurer is the right fit.
“PHLY does not go through the wholesaler distribution channel. We work directly with the retail agent, and I think it brings some unique benefits,” Flood explained. “First and foremost, it delivers a less expensive cost structure.”
The insurer’s team of underwriters is also a huge asset for partners. A team of seven, the PHLY underwriters are knowledgeable in accident and health coverage and know the business inside and out.
“This is an important facet of the business, because, in many cases, agents are very focused on placing the property and casualty business. Accident insurance can become a last-minute thought. We come in and fill the gap and turn that quote around many times the same day or next day.”
The team has worked hard to round out its book of business and strives to be as knowledgeable in the three areas of accident and health for its clients.
At the end of the day, Flood said, “when an organization is equipped with an accident policy and is able to cover all its members or participants and is in the position to help pay medical bills incurred as a result of activities sponsored by that organization, it reduces the chances of litigation and instills confidence in the organization.
To learn more, visit: https://www.phly.com/products/AccidentandHealth.aspx.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Philadelphia Insurance Companies. The editorial staff of Risk & Insurance had no role in its preparation.