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As workers' compensation premium remains in a five-year downturn, Safety National Group is getting traction in the segment's self-insured excess market space.
While some carriers braced slightly on results from the third quarter's renewal season, Safety National's Chief Executive Mark Wilhelm found a welcome surprise. Net premiums earned for Safety National's excess workers' compensation line increased 8% to $74 million and were boosted by a 23% increase in production. Wilhelm credited the recession-resistant performance in three sectors that comprise the bulk of Safety National's excess book: public sector employment, health care and schools.
He said many of these self-insured accounts renew in the third quarter, either on July 1 or Sept. 1.
"Frankly, we expected a slight decline and what we got was a slight increase," he said. "The payrolls for those three classes are up year-over-year. And I'm talking on an apples-to-apples basis."
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Expecting only a slight decline may be considered an optimistic outlook, given the deterioration of premium in the overall workers' compensation segment.
In 2009, 15 of the top 25 writers reported double-digit decreases in net premium, according to an A.M. Best Special Report on workers' compensation issued Oct. 4, 2010. The Travelers Cos. was the only insurer in that group to record an increase; its net premium climbed 1.2% to $2.51 billion.
A relatively consistent lineup of competitors in the excess segment has contributed to an atmosphere of stability. That hasn't made it any less challenging to grow under soft market conditions in a segment laden with long-tail exposures.
"We're probably the only excess writer that has a singular focus on the serf-insured, large-deductible buyer," Wilhelm said. "We try to have a full array of products for them."
He said 2010's third quarter results were also bolstered by …
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