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Friday, January 09, 2009

Software That Helps PEOs Manage Their Risk

Posted: 12/4/2001

Posted By:	NetWise Technology		Contact:	Roger Boutin
Phone:	727.895.5100		Email:	rboutin@netwisetech.com

St Petersburg, FL [December, 2001] -
Two St. Petersburg-based companies have formed a partnership to market software they have developed to help employee leasing companies keep their workers’ compensation coverage in place in what is becoming a very tough insurance market. NetWise Technology and Risk Map inked the agreement on November 29th.

Before September 11, 2001, many workers’ compensation carriers were pulling out of the PEO market. One of their principal complaints was that a PEO is a moving target. In other words, what the carrier underwrote today may be very different next year, making it difficult for reinsurers to back up an insurer’s decision to provide to a PEO.

The events of September 11 presented the insurance industry with the worst single loss in its history. Insurance carriers and their reinsurers will meet their obligations but the cost of coverage will increase, adding more pressure to PEOs, 75% of which have their headquarters in Florida.

In addition, several carriers that have strongly supported the PEO industry this month issued across the board notices of cancellation to their clients in Florida, not because they want to cancel coverage, but because if they simply renewed the coverage, under Florida law they would be limited to a 15% increase.

“A fifteen percent increase will not cover the increased cost of reinsurance these carriers are facing since September 11th," said Diane Perkins, who with Tampa labor attorney Michael Miller own Risk Map L.L.C. Reinsurance is the insurance that carriers buy to help them pay their own losses. “The carriers want to continue to work with PEOs but must cover their own costs. To stay insured a PEO must show them loss and operational data in a very organized fashion,” said Perkins.

Perkins, formerly the Vice President for Insurance and Risk Management for Clearwater’s TeamStaff PEO Division, contends “This year at renewal it will not be enough to have an average program. Many businesses in and outside of the PEO community are contending for reinsurance dollars. PEOs will have to be strong data partners with the carriers who are still offering workers’ compensation coverage to PEOs: C N A, Cedar Hill, and some captives.”

The Risk Map It! software application enables PEOs to match workers' comp losses against billings and isolate the net profit by client and client location, provides a system for managing claims and doing loss runs and automated OSHA 200 and the coming 300 format logs, and provides the loss development patterns that carriers need to see in order to provide coverage.

According to Perkins, “I know of no other software that can show a PEO by client and client location what their losses in a given year were worth every month until they closed, and match that information right beside their billings. Even a carrier has to work with actuaries to sort this out. If a PEO can do this themselves, without assigning a crew of folks to crunch the numbers for a couple of months, they will stand out among their competition.”

Risk Map It! is available beginning at a cost of under $10,000 and can be installed on the PEO’s server.

NetWise President Randy Wadle noted that he was approached by Perkins to find a practical solution to matching the billings to losses. “PEOs have great pay to bill systems that accurately handles large payroll volumes, but they were never set up to allow the PEO to match their developing insurance losses against their controllable revenue and gross billings. This system does that and it can import payroll and loss data from all the major pay to bill software and carrier databases. That’s one of the reasons it’s so cost effective,” Wadle said. “It does what it has to do---map the data---and uses existing data sources available within and to the PEO rather than re-keying the data.”

With Perkins’ industry experience as a guide, NetWise, a St. Petersburg-based IT solutions provider, developed the Risk Map It! software. It is currently in use at one of the Bay area’s largest PEOs. Risk Map and NetWise are now actively marketing this solution at a time when PEOs need it the most.

“We could not believe how difficult this data is to isolate and combine,” commented NetWise’s Randy Wadle. “With Diane’s expertise, we were able to isolate the data that PEO risk managers really need in order to do their job well. From there, we created an application that not only captured the data, but allowed it to be manipulated and viewed from various angles to allow risk managers to help their PEOs run more profitably.”

NetWise Technology is a provider of software development and systems integration services as well as software products. Utilizing a strong business consulting background, NetWise builds web-based solutions that enable its clients to gain competitive advantages through the application of emerging technologies. Information on NetWise Technology can be viewed at www.netwisetech.com.

RiskMap provides consulting and software that improves the efficiency and effectiveness of claims reporting and administration. Information on the Risk Map It! product or on RiskMap can be viewed at www.riskmapit.com. Perkins can be reached at dperkins@riskmapllc.com.

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