Situation

After 25 years in business, a large state self insurance fund found itself with three major obstacles to overcome— a membership roster with many under-performing risks, less than favorable member equity, and accounting operations that needed an updated review.

The fund offers workers’ compensation and property/casualty self insurance programs for school districts, city parks, playgrounds, municipalities, hospital districts, counties, junior colleges, cities, housing authorities, appraisal districts, port authorities and other political subdivisions.

Action

The fund’s management team selected Avizent to begin revamping the fund. Avizent reviewed the current programs and recommended solutions for improving each area. They worked with Avizent to build welldesigned programs that would be beneficial for them and their members. Avizent also developed a plan for transitioning all of the data from the fund’s previous third party administrator to Avizent. Through the underwriting process, Avizent worked with them to select the profitable policies that would remain in the fund, as well as the risks that would have a negative impact and would need removed.

Avizent’s program for the 110-member group includes claims administration, medical managed care services, accounting, marketing, underwriting and loss control consulting. Avizent also completes premium calculations and oversees payroll auditing. To manage all accounting functions for the fund, Avizent hired a dedicated accountant whose background included several years of experience working with self-insured groups. Avizent also carefully selected a reinsurance firm and an actuary to assist them. In addition, Avizent secured a fully equipped office location in 30 days to accommodate a newly formed service team for the fund.

Results

Avizent’s responsive, knowledgeable staff helped the fund enhance their program, and reduce and control member costs. With Avizent, the cost of lost time and medical only claims for the fund’s members is about 28% less than the industry average published by the Workers’ Compensation Research Institute. In addition, during a one-year period, Avizent’s managed care network services saved the fund’s members an average of more than 60% on medical bills, and produced an average return on investment of 30-to-1.

In three years, Avizent’s proactive approach has also helped them boost member equity to $5.2 million— an increase of more than 400%. As a result, the fund will be able to issue dividends to members for the first time in its history. By taking ownership of the obstacles, the Avizent team was able to steer the fund in a positive direction, strengthen their finances and position them for continued growth.