Professional Employer Organizations Save on Workers’ Compensation Premiums

Uncontrolled Workers’ Compensation Costs can have a devastating impact upon the profitability of Professional Employer Organizations.


– The insurance regulatory authorities in each state audit the reserving practices of workers’ compensation carriers to help identify and prevent potential insolvency. Reserves are required to be set on the “conservative” side (somewhat higher than file documents support at any given point in time) to meet insurance department solvency criteria.

– These “conservative” reserving techniques work AGAINST the UNIMFORMED PEOs that do not realize that an opportunity has been given to them relative to their Unit Statistical Plan filing which determines their experience modifier.

– Since the early 1919’s, employers have had the opportunity within 6 months following policy expiration (there are exceptions in certain cases to the 6 month time frame) to audit their open Workers’ Compensation claim files and to ask that reserves AT THAT MOMENT IN TIME track with FILE DOCUMENTATION. The result is a change in reserves SPECIFICIALLY for Unit Statistical Plan filing purposes, which develops a much lower and accurate experience modifier because the regulatory pressures dictating “conservation” reserving practices have been TEMPORARILY eliminated from the calculation.

The good news is that an Information Management System named AcuComp, developed by National Insurance Advisory Services is now available to Professional employer Organizations nationwide.

The innovative AcuComp system addresses and resolves a dilemma facing the insurance industry and PEO’s thereby improving loss ratios 35% and lowering experience modifiers an average of 27 points.


The AcuComp process involves a combination of Workers’ Compensation claim file auditors supported by a proprietary software program capable of tracking both the field audit activity and the PEO’s clients Workers’ Compensation claims from inception to resolution through the experience rating process (the numerator in the experience modifier). This can be done by location, by client company, using one easy-to-read format for ALL Workers’ Compensation carriers.

Experience modification rate calculation experts then detect, correct and obtain refunds for all retroactively correctable reserve reporting discrepancies made as a result of prior Workers’ Compensation claim file audits. The results are dramatic – loss ratios improve an average of 35% and modifiers improve an average of 27 points.


In addition to improving loss ratios and improving experience modifiers, the program is particularly effective in reducing costs for those PEOs involved in loss sensitive programs, such as paid loss and incurred loss retrospective rating plans. The reason is that claim files contain the SOURCE DOCUMENTS used to promulgate retrospective rating adjustments. “We find situations within the claim files themselves that indicate subrogation possibilities, third party recovery potential, as well as simple clerical mistakes such as erroneous payments”, noted James B. Conant, CEO of NIAS, Inc. “Since its introduction in the Northeast in September of 1989, over 6 million dollars of actual premium savings have been released by those employers enrolled in the program. Most employers cannot afford to be without a highly cost effective solution of Workers’ Compensation costs.”

Based in West Palm Beach, Florida, NIAS Inc. was founded in 1979 in Boston as strictly a “fee for service” organization. It does not sell insurance, and it has provided cost effective insurance advice to hundreds of employers during the past 34 years. Conant, who has been a professional in the insurance industry since 1963, suggests a no cost, no obligation feasibility study for any SEO interested in finding out whether or not there could be a meaningful cost/benefit derived by installing the AcuComp service.

“I would like to stress the fact that we do not disturb the existing insurance company/client relationship in any way,” Conant said. “Insurance providers and agents realize the value of programs such as ours which help employers control Workers’ Compensation costs.”

If you are one of the many PEOs who feel that it is time to intelligently manage our Workers’ Compensation program, contact National Insurance Advisory Services at your earliest convenience and ask about our no cost, no obligation feasibility study. Our number is 800-883-5600.

Contact NIAS

National Insurance Application Systems, Inc. has only one mission – to create as many measurable differentiators as possible for our member agents – resulting in higher policy counts, profits, closing ratios and spectacular growth.

AcuComp® improves loss ratios an average of 30 percent and permanently lowers experience modifiers together with premiums an average of 27 percent over time.

National Insurance Application Systems, Inc.

5730 Corporate Way, Suite 230
West Palm Beach, FL 33407

Toll Free: 800-883-5600
Local: 561-697-4500
Fax: 561-689-1009