This insightful interview with Troy Reynolds is the second in our series of interviews with influential PEO industry leaders.
What does Stonehenge Insurance do?
We support our PEO and Staffing clients in maximizing value within the insurance components of their service offering. We do this through consistent management of their Workers' Compensation program(s) by providing underwriting support, risk assessment, loss prevention, claims advocacy, audits, experience modifier review and review of data and analytics.
How did you get into this industry 25+ years ago?
Now you're giving insight into my age! I began my career in the PEO space in 1994. I started as a Business Development Manager for a company named Staff Leasing (n/k/a – Trinet). I was fortunate to grow with the company and learn what it takes to grow a PEO from a small regional player to a national publicly traded organization with over 140,000 WSE's.
How does your past PEO experiences, now help your PEO clients?
My clients tell me that their experience with Stonehenge is very different than other agents that “sell" to the PEO market. The simple fact that we have many years of either owning or operating large divisions of a PEO allows us to truly understand the needs of our PEO partners.
When you're accountable for driving growth and profitability within a PEO model, you become intimately aware of every granular details and how it impacts growth and profitability. The fact that we've experienced many of the challenges our PEO partners encounter on a daily basis allows us to deliver a PEO centric solution that supports our clients goals while heading off potential hazards.
What are the keys for long term success in the PEO market for a workers' comp insurance company?
You would think this question would be simple to answer! Although, history indicates this has been a challenge and many carriers are still trying to understand the PEO space and it's needs. There are a couple national A rated carriers such as Zurich and Amtrust that have supported PEOs for many years and continue to be bullish on our industry.
Many carriers tend approach a PEO in the same manner they approach every other business. A PEO is not a typical business that has limited exposures in a small geographic area that can be easily managed. Most PEOs have a very diverse client base with worksites and WSEs throughout the country.
I firmly believe to effectively support PEOs, a carrier must develop and effectively manage multiple program structures that support the profitable growth of their insureds. A one size fits all mentality does not work in our world. It starts with building the appropriate program structure for each PEO based on their internal experience and their ability to effectively manage a Workers' compensation program.
I still have yet to meet two PEOs that are exactly alike. We all use the co-employment model as the vehicle to deliver services to our clients; but that's where the similarities end. As such, each should be managed differently to ensure we maximize the opportunity for every PEO to succeed. We need of increased flexibility as the PEO grows in experience, premium and risk. The challenge is the majority of PEOs have less than 10,000 WSEs and premiums less than five million. These are the PEOs that need the most support from brokers and carriers.
In general, what does one PEO do better than another internally, in managing claims?
It's amazing how different PEOs manage risk and claims. I've seen where a PEO is very involved in every step of the claims process, while others want the carrier to handle the claim from beginning to end. The better performing PEOs are involved in every step of the claim process (intake to claim closure) and keep everyone (carrier, client and injured EE) up-to-date on the progress of the claim. As with anything, constant and consistent communication is key.
Whether the PEO's workers' compensation program structure is a large deductible, or first dollar guaranteed cost program, every claim should be aggressively managed as it will eventually impact the PEO's bottom line. Most PEO centric broker partners employ an internal claims advocate. If the PEO lacks experience with managing the claim process, take advantage of their broker's internal expert and maintain a regimen of claims reviews to ensure nothing slips through the proverbial crack.
What are common traits you see from successful PEOs?
Leadership, vision and people! Success comes in different sizes and configurations. I know very successful PEOs that choose to be the best in their respective geographic area and have no interest in becoming a national player. A recent example of how the owner/leadership makes the difference is a recent conversation I had with a very successful mid-size PEO that reached out to brainstorm ideas on how to reach the next level of their growth plan.
The best PEOs have a plan and know they can always do things better and continually strive to improve every aspect of their business. The owner or executive of the PEO may not heave all the answers, but is willing to tap into resources that can support them through the process.
