Commercial Markets

Commercial Markets offers a wide array of property and casualty (P&C) and group benefits insurance coverage through independent agents, brokers and benefit consultants throughout the United States.

Commercial Markets P&C provides commercial lines products and services to midsized and large businesses. Group Benefits furnishes midsized and large businesses with group life and short- and long-term disability insurance products and administrative services. Summit sells workers compensation coverage in the Southeast, primarily to small businesses. Liberty Mutual Reinsurance provides reinsurance programs for domestic and foreign insurance and reinsurance companies. Commercial Markets is also a servicing carrier for state-based workers compensation involuntary market pools.

Catastrophes and severe weather-related events were “the story” in 2011, and Commercial Markets’ catastrophe losses, and those for the U.S. commercial lines industry as a whole, were substantially higher than anticipated. Despite this challenging environment, Commercial Markets made significant strides toward realizing its goal of long-term, profitable growth.

Topping the list is Commercial Markets’ workers compensation claims next-generation predictive model, the latest addition to the Liberty Mutual Insurance VantageCompTM integrated approach to claims management. This predictive model helps to more quickly and accurately identify claims with the potential to escalate well beyond the norm, and apply the proper resources to deliver the best possible outcomes for injured employees and their employers.

To further enhance its partnership with brokers and agents, Commercial Markets combined three former service functions into a single, easier-to-access organization, and expanded its underwriting footprint on the East and West Coasts to better align with key distribution partners.

Commercial Markets P&C also continued its push for product diversification in 2011. Primarily a workers compensation insurer just a few years ago, its product mix is much more diverse today, thanks in large part to a focused effort to expand its underwriting appetite across all lines. Additionally, Commercial Markets developed and implemented more sophisticated pricing tools to ensure the proper focus on profitability as it expands its book across lines. Commercial Markets’ other businesses—Group Benefits, Liberty Mutual Reinsurance and Summit—continued to invest in building expertise and relationships, while maintaining a strong presence in challenging markets.

Today, with an exclusive focus on agent and broker distribution, and reorganized in a cohesive, functional structure, Commercial Markets, together with its committed and engaged employees, is in a solid position for future profitable growth.

Response

“And Then We Got Hit”

Rich Ingram, facilities maintenance manager for Mikron, which manufactures window and door components and systems at its Richmond, Kentucky, plant, was in a meeting room overlooking a parking lot when he noticed the change.

“First the wind was blowing hard right to left, and then it abruptly switched direction. Next thing I knew, the roof blew off the firehouse across the street, and then we got hit,” he said. It was Friday evening of the Mother’s Day weekend, and without warning, a tornado had struck.

Onsite the next day were Liberty Mutual Insurance property adjusters Mel Jeffers and Will Prebil. “Mikron runs a 24/7 operation,” Jeffers said, “and once they knew their employees were safe and unhurt, their top concern was getting three major shipments out the door.”

Jeffers and Prebil brought in specialists to help with the cleanup, and by Monday afternoon, even though its facility would undergo repairs for months, Mikron had returned to full manufacturing.

“After an event like this, it’s difficult to prioritize what needs to be done,” said Jeff York, vice president, Process Innovation for Mikron. “Mel’s expertise and calming influence made all the difference.”

Ability

Predictive Modeling Results
in Superior Claims Outcomes

With a small number of workers compensation claims driving the vast majority of total claim costs, it’s crucial that Liberty Mutual Insurance identify and act on those needle-in-a-haystack claims early on, before their costs escalate. That’s the thinking behind VantageCompTM—the company’s integrated approach to workers compensation claims management.

“VantageComp is really the end result of a vision and a continuous journey in the innovation of workers compensation claims management,” said George Neale, executive vice president and general claims manager.

A key VantageComp component is its next- generation predictive model, winner of a 2012 Business Insurance Innovation Award. This series of models runs over the life of a claim and uses case file data, billing details and non-medical factors to identify cases likely to escalate.

Earlier identification of at-risk claims lets Liberty Mutual Insurance claims handlers intervene sooner with more sophisticated claims management strategies. Applying the right resources—at the right time—changes the trajectory of these claims, helps control costs and produces the best possible medical outcomes for injured workers.