Insurance Business Cycle Drives the Alternative Market
ART programs typically gain market share during hard market cycles of the insurance industry characterized by rising premiums, tougher underwriting practices and more restrictive coverage. Employers who make the move to the alternative market are often reluctant to return to traditional markets once they realize the beneﬁts of the ART market approach. Hence, the ongoing growth and development of the ART market in the past thirty years through several insurance business cycles.
Eﬀectively managed Third Party Administrator (TPA) programs address common complaints employers voice relative to traditional insurance. One of the most signiﬁcant complaints employers point out is lack of control relative to the cost of claims and the fluctuation in premium from year to year.
From the outset, the ART model is more collaborative since the employer essentially becomes an owner of the risk and stakeholder in the processes and methods that are employed to manage claims and associated costs. TPA programs work very closely with employers to ensure that risk management becomes an integral part of a company’s operations. This joint eﬀort also engenders close communications between the employer and TPA.
When an event does occur, the claim is handled with greater transparency, consistent communication and more accountability. This level of involvement can inﬂuence and change the dynamics as to how employers view and manage risk leading to safer work environments, containment of escalating claims costs and overall better outcomes. Employers that are accustomed to this level of interaction in the claims process are typically reluctant to return to traditional insurance practices.
Brentwood Services continues to be a leader in structuring and managing all aspects of alternative market programs.