Retailers Casualty Insurance Company has announced a significant payout of $2.5 million for its policyholders with coverage that began in 2022. This decision comes from the company’s board of directors and aims to reward businesses that have shown a commitment to employee safety.
The distribution is based on each policyholder’s premium and loss ratio. Those who have maintained a lower loss ratio will receive a higher return. For instance, policyholders with no losses can qualify for a maximum distribution of 21.3% of their normal premium. However, eligibility is subject to certain minimum requirements, and future distributions will be determined at the discretion of the board.
Frank Brame, the chairman of the board, emphasized that this distribution is a way to recognize businesses that prioritize the safety of their employees. The company, established in 1988, specializes in providing workers’ compensation coverage to over 2,200 businesses across several states, including Alabama, Arkansas, Louisiana, Mississippi, Oklahoma, and Texas. It is managed by Summit Consulting LLC, which handles underwriting, policy administration, claims management, and loss prevention services.
Workers’ compensation policyholders can receive dividends based on their premiums and loss ratios. These dividends act as a return of a portion of the premium, depending on the insurer’s financial performance and the policyholder’s loss experience.
There are different ways dividends can be structured. In a flat dividend plan, policyholders receive a set percentage of their premium back, regardless of their claims. For example, if a policyholder has a 4% flat dividend on a $10,000 premium, they would get $400 back, no matter what claims were made.
On the other hand, sliding-scale dividend plans adjust the dividend amount based on the policyholder’s loss ratio. Generally, a lower loss ratio leads to a higher dividend. For example, a policyholder with a $10,000 premium and a loss ratio under 10% might receive a 5% dividend, while a higher loss ratio could reduce that dividend significantly.
This recent announcement reflects the company’s commitment to rewarding safe practices among its policyholders and highlights the importance of maintaining a solid safety record in the workplace.