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Feature: Cluett Commercial Insurance Agency: Providing Agents Access to Workers Comp Markets & Services in a Difficult and Competitive Environment

Posted on 19 Jul 2012 by Annie George

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Cluett Commercial InsuranceToday we're featuring our storefront, Cluett Commercial Insurance Agency, one of the nation's leading wholesalers for Workers Compensation programs. Cluett, based in Kingston, Massachusetts, offers a wide array of 'A' rated Workers Compensation carriers, providing its Producer/Agents with access to well over 400 WC class codes. We spoke with Bruce Cluett, founder and president of Cluett Commercial Insurance Agency, about the company and how it helps agents find a home for its clients in the Workers Comp market - a Market that has become increasingly difficult and competitive.

Bruce began his career in the insurance industry more than 30 years ago when in 1981 he worked for direct writer American Mutual Liability Insurance Company. After his time with American Mutual, he worked with a two well-known insurance agencies in the Boston area.  In 1986, Bruce started a regional property/casualty insurance agency, which experienced rapid growth due to his strong background in the Workers Comp industry and his experience with American Mutual. In the early 1990's, he began doing consulting work for an employee leasing company, Bruce got their approval to offering Workers Comp on a wholesale basis.

Bruce at this time saw a real need for regional agents to access programs that they couldn't do so on a direct basis, and eventually founded Cluett after contracting with various insurance companies to offer Workers Comp on a wholesale basis. Cluett became one of the first and largest producers for Workers Comp, with both sides of the distribution system benefitting: The Carriers realized the advantage of working with a wholesaler that represents thousands of agents rather having to work with each individual agencies; and agents gain access to markets not available to them.

"Over the years, Cluett has grown to be a top producer for Carriers such as Chartis, AM Trust, ACE,  QBE, Guard and others," said Bruce. "We have also partner with Cennairus, a WC Wholesaler in Sarasota, Florida, which provides us with the ability to access other markets such as Travelers, Zurich, Munich Re and a host of others. Our goal is to offer producers markets that they need to successfully place their insureds' Workers Comp coverage, especially key in the complex marketplace we're now approaching."

Bruce explained that agencies are finding it increasingly more difficult to find markets for clients, which is why Cluett is an ideal solution for producers. "Some major carriers are reducing their Wokers Comp book of business while others are aggressively restructuring underwriting guidelines. The Workers Comp Insurance Industry as a whole is running a combined loss ratio of approximately 1.20. The Rates in Massachusetts, for example, if you go back 10 or 12 years ago, were two times what they are today. What's more, although claims are somewhat under control as compared to back then, we have seen medical expenses continue increase. " Insurers can't make the investment income the once did, the lower class rates, and higher medical expenses are now forcing WC Carriers to improve their Underwriting Profit and finding it difficult to make Workers Comp a profitable line of business."

Another issue facing agencies today is competition from payroll companies, such as ADP and Paychecks, that are writing Workers Comp Insurance at an alarming rate and are not agent-friendly. It's effective for insurers to write Workers Comp on a payroll basis  (Pay As You Go, Pay Go) as it minimizes both the Carriers costs as well as the Agents:  with fewer audit issues, cancellations, reinstatements. "To combat this competition, Cluett offers a software program, "Insurelinks" that Cluett's Producer/Agents can use so they can provide "Pay As You Go" and Monthly Reporting without Insureds having to change their Payroll Provider. "Agents need to know how important the Pay As You Go and Monthly Reporting is in the industry, and the need to have access to markets and the tools to provide this to clients."

Workers Comp claims management is another concern today, and Cluett is helping agencies in this area through its partnership with Stevenson & Brook. "18 to 24 months ago, there was a home for most Workers Comp Risks," said Bruce. "Carriers would write accounts with a mod up to 1.79 and wouldn't require loss runs. Today, this has changed and it's tough and getting even tougher to place Workers Comp Insurance on a direct voluntary basis, requiring agents to get much more involved with their Risks that have problems with claims. These Risks will end up in the various State Assigned Risk Pools. The agents will have to understand how their clients' claims are affecting their Experience Rating and what can be done and must be done to turn the situation around. Getting a claim closed and getting employees back to work as soon as possible with a light duty program is needed. Our relationship with Stevenson & Brook, which offers Workers Comp Claims Management can provide assistance to agents in this area on a fee basis.  We can also offer additional services such as Experience Mod Projections and Experience Mod Audits through Stephenson & Brook.

Cluett's relationships with their Carriers and their ability to get accounts underwritten in a difficult marketplace, along with its proactive approach in providing services to help agents gain a competitive edge against competition and to manage skyrocketing Workers Comp claims, allows the wholesaler to deliver a turnkey solution for agencies in an environment that is increasingly complicated.

Agents can use Cluett's on-line portal to submit applications. You will receive a quote or a request for additional information within 24 hours. Cluett's programs are offered on a national basis. For more information, visit: