SAN FRANCISCO, Dec. 2 /PRNewswire/ -- Tevis Insurance Company today announced that it has filed an application with the California Department of Insurance to become a new workers' compensation insurance carrier. The application will be reviewed and scrutinized by the California Department, but Tevis is optimistic that it will be approved. Once licensed, the California- based company plans to offer creatively designed coverages to mid-sized businesses and associations to help them manage their insurance costs and develop long-term relationships with their carrier. "We think we can be a key part of the solution to help resolve the state's workers' compensation issues," said Jim Ross, the new company's President and CEO. "Our goal is to become a world-class specialty lines writer of workers' compensation insurance in California. We have a very experienced management team and solid financial resources to do this for the long term." "We have a fresh approach to writing business," said Mike Briare, Tevis' Senior Vice President. "Our goal is to become a financial and risk management partner to California businesses and associations, allowing them to assume a portion of the risk themselves using an approach not offered in today's market. We will focus not only on the risk management side of the business but also on helping employers manage claims and claims costs in unique ways."
Employers and brokers are looking for innovative solutions in a market that has seen severe price increases. Good businesses are closing or moving out of the state due to the cost of workers' compensation. "We think that Tevis' solutions to the workers' compensation crisis will help keep good businesses in California," said Briare. The Tevis management team has extensive experience in the insurance and financial services industry and a long successful track record in California.
Workers' Comp Crisis: A Brief Overview
The economic importance of the workers' comp industry is at an all time high. The birth of the California workers' comp open rating system on January 1, 1995, has had a dramatic impact on the state's business climate and overall economy. The change from highly regulated to a competitive pricing system lent itself to coverage being sold for as much as 25 percent below cost. At the same time, the workers' comp industry experienced cost increases due to rising medical expenses and fraudulent claims. While low rates increased some carriers' market share, too little premium was generated to cover claims, causing some carriers to fail and others to leave the state. Carriers were forced to substantially increase rates from an average per $100 of payroll of $2.30 in 1999 to $6.40 in 2003, a 178 percent increase, according to the Workers' Compensation Insurance Rating Bureau. Employers have been severely impacted and many have gone out of business, while others have relocated to other states. The governor, the legislature, business leaders, and regulatory agencies have been working diligently to gain control of the situation. On November 17, 2004, the California insurance commissioner approved a 2.2 percent decrease in advisory pure premium rates applicable to new and renewal policies with anniversary rating dates on or after January 1, 2005. Tevis Insurance Company looks forward to taking on the challenge and plans to be an integral part of the solution to offset the state's Workers' Comp issues and enhance the state's overall business climate and economic prospects.
Tevis Insurance CompanyCONTACT: Michael Briare of Tevis Insurance Company, +1-916-780-3647