Admiral to go by Elephant Auto Insurance

Admiral Americas, the U.S. arm of Welsh-based Admiral Insurance, has picked a new name. Read more

Guest Opinion: Why did my business’s premiums go up 19%?

 

As with many of you, as a small-business owner, I have any number of operating expenses each month.  One significant expense is health insurance. On the first of each month, I write a check to my health insurance provider for about $10,000. Other than the costs of parts and payroll, I have no larger expense than health insurance. Midas of Richmond employs 29 people on a full-time basis, and that is the cost of providing a reasonably good health insurance package for them.

Now the crazy part: When I went through my annual renewal this year, my premium increased 19 percent. To the best of my knowledge I had no hospitalizations, no new babies joined the Midas of Richmond clan, nothing of import seemed to happen with respect to the health of my company, and our premiums went up 19 percent. That is crazy!

President Obama has a plan to fix our national health care program, so do the Republicans, even my Golden Retriever, Gumbo, has an outline he started sharing with me before he got distracted by a squirrel.  I don’t have a plan – creating a health care plan is above my pay grade. 

I do have two sharp perspectives though. Although I do not think people have a blanket right to health care, I do feel people have a right to have access to reasonably affordable health care.  I also want you to understand that anyone who chooses to have Midas of Richmond take care of their vehicles has some aspect of these health care costs reflected in the prices they pay.  

That is the simple set of economics behind how we set up our pricing matrix. This applies to any business you choose to have a relationship with. So we have a health-care system that is a runaway train. Who is responsible? 

Each of the parties involved – from drug companies to hospitals to insurance companies – points the finger at someone else. In my experience, no solution can be found in a dynamic like that.  

How about letting the government take over? The thought of the government managing any service industry is a serious concern to me. I have yet to see any government program that has efficiencies and competencies comparable to those found in the private sector. 

Where are we then? For as long as I am a small-business owner, I will provide my employees with a significant health-care subsidy.  

We need a menu of private sector programs that foster competition, innovation and market-based pricing. And, foremost, we need cooperation among insurance carriers and medical care providers, health care and wellness, private sector and public sector, and bottom line affordability.

If we set bottom-line focus aside and reverse-engineer a program offering those who are involved in it a return consistent with the risks they take, it seems to me there would be a solution to be found. If you are so compelled, search online for Harvard Professor Michael Porter’s recent comments, and book, on health care – there is a great template there.  

There is a quote that I do not know whom to attribute to that states the thought process that got us to the point we are at will not be sufficient to offer a solution – in short, what got us where we are will not get us out of it. As I said earlier, Gumbo has some unique ideas, and if you watch the Sunday morning talk shows, there are a lot of Gumbos out there. This is a community issue, and we are the community – get involved, be heard and help create the solution.  

Mark Smith owns the local Midas franchise. 

Local biz owner hits Capitol Hill

Local small business owner Tammy Rostov made an appearance at the U.S. Capitol yesterday to support a healthcare reform drafted by House Democrats. Read more

Welsh firm close to offering car insurance in Va.

Admiral Americas will offer auto insurance to Virginia motorists late this year or in early 2010, according to a story in WalesOnline.

The insurance company, with headquarters recently established in Richmond, is the U.S. arm of Wales-based Admiral Insurance. The company is the third largest auto insurer in the United Kingdom.

WalesOnline reports the Richmond office has 19 employees  under the command of 35-year-old Andrew Rose, a graduate of the University of Virginia Darden School of Business who worked for Capital One and Countrywide before landing the job with Admiral.

The company said in a news release in March that they planned to hire as many as 50 employees through the third quarter.

According to the article, the company will roll out its insurance products in Virginia before expanding to other states.

Although Richmond is the latest home for the insurance carrier, the company’s Welsh roots are not played down at their 26,000-square-foot Innsbrook office.

From the article:

And for a Welsh company to be investing in the US and creating jobs, instead of a US company announcing inward investment into Wales, is unusual, admitted Mr Rose.

“We have the Welsh flag hanging in our lobby, all the staff ID cards are having the Welsh flag on them. Wales is part of our heritage and we are proud of that.”

Admiral Americas is in the process of branding itself with a new name, Rose told WalesOnline. They have narrowed it to a couple of choices from a list of more than 1,000 possibilities. The company held a naming contest to generate idea and has used focus groups to pare down the selection.

Admiral is apparently a fun place to work as well, as described in a companion article in WalesOnline:

Admiral is famous for the emphasis it places on staff having fun in the workplace; its ministry of fun, with a different department taking control each month, directing frivolities in the office.

In Virginia, it was a shock for some new staff members to find themselves being fired at with a foam gun by their boss. But the fun element is all about striking a balance with hard work, said Mr Rose.

Another fun tidbit about Admiral: To keep paper waste at a minimum, Rose instituted a policy that each employee must do one push up for each piece of paper that he or she prints in the office.

BizSense interviewed Rose in March; you can read that interview here.

King of Pop’s death ripples to Mondial insurance

Travel insurer Mondial Assistance, which has a large Richmond office, got a bit of a thriller on news of Michael Jackson’s death.

The King of Pop was preparing for a sold-out concert series in London. With about a quarter-million tickets sold, a handful of companies are preparing to deal with perhaps the largest mass refund in history.

Mondial, with its global headquarters based in Paris but with a major office in Richmond, is expected to pay out $3 million to $4 million on behalf of ticket agency Seatwave, according to Forbes.

A spokesman from the Richmond office said that their unit is not involved with cancellation insurance polices related to Jackson’s concerts.

From the article:

Secondary ticket agency Seatwave, which facilitated the sale of around 3% of all tickets for the concert, said it was paying $3-4 million refunds for tickets bought for the concert on its Web site. The company acts as an online intermediary between fans who want to buy and sell tickets and takes a 25% commission on ticket sales. Most sellers bought their Jackson tickets from Ticketmaster, and buyers came from 40 different countries around the world. But Seatwave’s refunds won’t cost a penny as it is covered for concert cancellations by Mondial Assistance, a subsidiary of Germany insurance giant Allianz.

“This is the biggest cancellation I’ve ever seen,” said Seatwave Chief Executive Joe Cohen.

The big payout is just part of doing business for an insurance giant like Mondial, which had a profit of $87.4 million in 2008, more than 9 percent over the previous year.

The Richmond office has more than 700 employees.

More than $1 billion from AIG flows into Virginia

The AIG plot is thickening here in Virginia. According to the company’s announcement on March 15, public entities in Virginia were on the receiving end of more than $1 billion in payouts. That’s the second most of any state behind California. You can see a graph here.

According to the press secretary for Tim Kaine, that money did not flow to the state itself, bur rather to local $600 million went to an entity called the Capital Beltway Funding Corporation of Virginia created to build the 495 HOT lanes in Northern Virginia. Another $400 million is for funds earmarked for military housing improvements on bases in Virginia.

Purchasing Insurance Over Internet Risky

Independent insurance agents are finding that consumers are making significant and costly mistakes when they are purchasing insurance over the internet. In a recent survey of Virginia independent insurance agents, 31 percent indicated that they have had to correct costly mistakes that consumers have made when they have purchased insurance on-line. Read more