Synergy Comp: From TPA to Full-Service Carrier Using RISKMASTER
Client:Synergy Comp Insurance Company
- Support workers’ compensation processing and data management for rapidly growing insurance and claims organization
- CSC's RISKMASTER software
- Supported growth from third-party administrator to carrier
- Reduced clients' average workers' comp claim payouts by 60 percent
Risk Reduction and Claims Management Strategy
Synergy Comp Insurance started out as a two-person department in a northwestern Pennsylvania insurance agency. In 10 years it has grown into a highly competitive third-party administrator (TPA) and a full-service workers’ compensation carrier with approximately $8 million in annual written premium.
Synergy Comp executives credit the company's success to the dramatic reductions in Workers' Compensation payouts it has achieved for dozens of clients through its comprehensive, year-round risk reduction and claims management strategy.
For most of its history, Synergy Comp has relied exclusively on CSC’s RISKMASTER software for claims and risk management. The data in the system proved to be invaluable to the company’s growth.
“We use Business Intelligence to query all of our data out of RISKMASTER, and we use the information heavily,” said Brandy A. Hammerschmidt, assistant vice president of Compliance. “We now have a lot of data. For our clients, we provide weekly check registers, monthly reports and annual requirements. In fact, they rely on us for all of their reporting.”
Within Five Years, a Dramatic Drop in Payouts
In the beginning, the innovative president of Gilbert’s Insurance Agency, a large firm rooted for generations in Sharon, Pennsylvania, set out to help some of his agency’s self-insured clients lower their chronically high workers’ compensation costs.
Gilbert’s president, Lew Kachulis, looked for a preventative, comprehensive approach and hired two former employees of Employee Benefits Insurance Company (EBI). Jim Culligan, a former EBI loss prevention consultant, and Marie Swanson, EBI’s former claims management adjuster, set up a TPA business to provide a formalized, comprehensive safety program for Gilbert’s self-insured clients and to help those companies manage claims.
Chris Lopez, Synergy’s vice president of Claims, said the data from RISKMASTER helps the department stay on top of claims.
“We’re always looking at things like closed claim ratios in RISKMASTER,” Lopez said. “It really helps us identify how well we’re staying ahead of the curve, and it keeps our eye on the ball.”
Lopez also appreciates the search capabilities and the fact that the system identifies litigated files and differentiates between open and closed exposures.
“The system makes it much easier for us to focus on the 20 percent of claims that represent 80 percent of costs,” he added.
$8 Million in Premium, Claim Costs Reduced by Thousands
In 2005, an actuarial study found that the average workers’ compensation payout for Synergy Comp’s self-insured clients had dropped by nearly 60 percent. The success propelled Synergy Comp and Gilbert’s Insurance Agency to create a third entity, a monoline, Pennsylvania-domiciled Workers’ Compensation carrier for fully insured clients called Synergy Comp Insurance Company.
As an insurer, Synergy sought clients among hospitals, nursing homes, light manufacturers and other ‘four-walled’ companies with more than $100,000 in annual premiums. Sticking closely to the strategy that had served the TPA so well, executives relied on RISKMASTER to process claims, keep litigated cases in clear focus, and track the kinds of data that would prove useful in reducing future costs.
By 2008, Synergy had written $8 million in premium and had reduced the average Workers’ Compensation claim cost for its entire book of business from $4,760 to $1,600. Using Business Intelligence to query data from RISKMASTER, Synergy efficiently supplied clients with weekly check registers, monthly reports and all documentation needed for regulatory compliance.
Continually Enhancing the Software
Synergy Comp’s team counts on CSC to work with the RISKMASTER community to continually enhance the software and support new requirements for business and regulatory compliance.
For example, CSC’s Data Analytics component eased the company’s anxiety over Medicare Secondary Payer Mandatory Reporting Provisions (Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007). Synergy Comp and other RISKMASTER clients were ready with an automated in-house solution for the new tracking and reporting requirements many months before the federal government deadline.
Another key benefit of using RISKMASTER is that it gives the company a flexible platform for expanding the business into neighboring states. “We fully expect that we will continue to grow, three to four times over,” Culligan said.