WRIS & CompPartners Buck CA Comp Trend; Small/Midsize Employers See Loss Ratio Improvement Through HCO Options.

Business Editors

IRVINE, Calif.--(BUSINESS WIRE)--May 23, 2000

Western Regional Insurance Services (WRIS), a fast-growing regional workers' compensation program manager serving California's small to mid-size employer market, and CompPartners, a leading workers' compensation health-care organization (HCO), made a joint announcement Tuesday regarding impressive 1999 underwriting results.

Seven months into its third year of operation, WRIS reported a loss ratio of 50% on $9 million in earned premium. The loss ratio is more than 50% lower than the state's 1999 loss ratio of 102%.

According to Darwin Hall, WRIS' chief executive officer, the company's workers' comp experience has been improving steadily over the last three years. During that time, no underwriting changes were made and program classes remained constant. Hall commented: "I attribute the improved performance to employer adoption of our state-certified HCO program with CompPartners. We now have an employer HCO acceptance rate of 85%."

WRIS takes a proactive role in helping brokers to understand and demonstrate the merits of an HCO approach to workers' compensation cost containment. The company regularly holds CEU-accredited training programs and has recruited a statewide network of brokers who are well-prepared to help employers analyze past experience and evaluate the potential value of HCO implementation.

While state legislation introduced the HCO concept in 1993-94 legislation, employer interest did not begin to catch hold until three years ago.

"Workers' compensation was a soft market in the '90s," commented Bruce Carlin, CompPartners' chief executive officer, "and that meant intense competition and low prices, a combination that clouded HCO value. We are proud to partner with WRIS, and we hope to continue to improve industry benchmarks in workers' compensation performance."

In addition to loss ratio improvement, Hall anticipates positive long term impact on such industry barometers as severity experience and reserving. WRIS reported a 1999 severity cost average of $7,000 per open/incurred indemnity claim. According to the WCIRB (California state rating bureau), the most recent estimates for California put 1999 average indemnity claim cost at $30,813.

"Now, our `worst' best case scenario for reserving is a cure-out figure of $14,000 to $15,000 as opposed to twice that amount for overall state experience," Hall commented. "The impact of writing business in an HCO model is extraordinarily encouraging given our results to date.

"We are hopeful that a fully integrated system with near 100% HCO penetration, peer review, medical bill review, case management and a proactive claims approach will deliver sustainable value to the employers we serve."

Western Regional Insurance Services, a regional workers' compensation program manager established in 1997, has headquarters in Camarillo, Calif. The company serves nearly 1,000 California employers, representing 13,000 employees, through a growing network of brokers.

The company will end its third year of operation with $9 million in workers' compensation premium written. This represents an increase of nearly 80% since the company's first year in business. For more information visit the Web site at www.wrisllc.com or call 805/383-5744.

CompPartners, with headquarters in Irvine, was founded in 1998 by Bruce A. Carlin, chief executive officer, Steven W. Rosen, M.D. and president/chief medical officer, Steven M. Huntington, senior vice president/marketing & account management and John Swan, senior vice president/sales & strategic planning.

The company's provider network is state certified, offers two HCO plan options and includes more than 20,000 medical providers and 400 hospitals. The company's service and product line includes both state-specific workers' compensation solutions and nationally applicable managed care interventions. For more information, contact Bruce Carlin or John Swan at 877/968-7426, or visit www.comppartners.com.