Poor Insurance Decisions Based on Deception

Recently we have witnessed some very poor insurance decisions by a number of employers who have switched TPA/Carrier for all the wrong reasons, to wit:

– Switched to a carrier because their PPO contract discounts were “proven” to be 37-55% better than the rental networks. The claim re-pricing exercise employed by the group’s consultant was later proven to be flawed. (The consultant was subsequently replaced with another “expert”)

– Switched from a TPA who had the case 5 years, managed claims and opened on-site medical clinic with addition savings to the employer, no increase in funding for the past three years, a pass on renewal, but switched to a new TPA/Carrier because their aggregate attachment factor was lower by over $3 million. The group was advised by their “expert” consultant that they would “save $3 million” by moving to the company offering the lowest aggregate factor.

Those of us in this industry are all at fault for these poor decisions. We have missed opportunities to educate employers as to the truth regarding our industry. Instead, employers have relied on con artists who have been trained to take advantage of their ignorance.

We must begin the process of educating our clients and prospective clients now, so that they are well armed to make good and prudent business decisions in the future. This is accomplished by telling them the secrets we dont want them to know about.

Decisions based on facts are always the right decisions. Decisions based on deception continue to demean our industry.

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