As I look at our extraordinary results over the past 12 months, I’m struck with gratitude for the unwavering belief our partners have shown in SFM. Through the whirlwinds of a global pandemic and continued economic uncertainty, policyholders are consistently choosing to stay with SFM, and independent agents are bringing more and more new accounts into the fold.

Ever since the opening chords of the pandemic, we’ve heard the refrain: “When will things get back to normal?” Well, after three years and countless bewildering developments, I’m convinced that pre-pandemic “normalcy” isn’t on its way back anytime soon. In its place, we’re discovering new realities that present us with new challenges. I’m confident that facing these challenges together will bring out our collective best. As new realities emerge, let me assure you that SFM will be a steadfast, positive partner.

We work hard every day to live up to our reputation for providing the best customer service in the business. Our commitment to service excellence is the foundation for the success we share, and I believe the results will bear that out every time.

Reflecting on the positives of the past year

As we work to finalize year-end numbers for 2022, some remarkable highlights have emerged:

• SFM’s policyholder retention level of over 96% demonstrates industry-leading customer loyalty
• New business continues to come in at a record pace
• Audit additional and endorsement premium revenue continues to track ahead of our projections
• Impact from medical inflation has been mild
• Paid losses on older claims have come in better than expected, signaling prior year loss reserve releases
• Policyholder surplus generation has exceeded expectations, furthering our commitment to growing surplus faster than premium
• Our 2021 combined ratio of 90% made it 11 consecutive years below 100, and 2022 is on track to make it 12 in a row 

New mission statement, renewed dedication to our continuing mission

As we build on our foundation of exemplary service, we’ve taken some time to reflect on the words we use to describe this commitment. We saw an opportunity to develop language that expresses the “why” that motivates each of us to make a positive impact through our work. After careful consideration, we’ve updated our mission statement to:

While the language itself is new, the sentiment that it conveys has been central to our company culture all along. We’ve always believed in taking care of employers and their employees, and through these words, we reaffirm the principles we’ve held since the very beginning.

I would like to thank our valued agency partners for sharing our dedication to service, safety and positive results for our customers. We look forward to succeeding together for many years to come.

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SFM’s territory expansion hits a new high as we broaden our appetite in Kansas and continue efforts to grow in Tennessee in 2023.

Agents asked, we answered

SFM is expanding our appetite in Kansas to include policies over $25,000 in premium starting in 2023.

We’ve had tremendous success with small business since we entered the state in 2020 and our team has built terrific relationships with Kansas-based agency partners. Over the past two years we’ve written approximately 500 policies across 142 governing class codes, totaling $2 million in in-force premium.

The feedback from agency partners about our service model and ease of doing business has been overwhelmingly positive, with several agencies telling us we’re their go-to work comp carrier and requesting we write some of their larger accounts. We are excited to provide this increased appetite to our partners so that they can offer our top-notch services to more Kansas employers.

A new year, a new state

SFM will start writing business in Tennessee in the first half of 2023 and we’ve already begun appointing new agency partners.

SFM’s territory expansion team continues to meet with key industry contacts in the state to develop relationships with regulators, agencies and agency associations. The company recently joined the “Big I” Insurors of Tennessee.

SFM is now licensed in 34 states. You can view a complete state coverage list on the account types and territory page of the SFM website.

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Employers don’t always know how important it is to report work injuries immediately.

As an agent, you can provide vital information on how timely reporting can impact the trajectory of a workers’ compensation claim.

The following are just a few of the benefits of reporting injuries right away:

• Start the claim off on the right foot.
  Reporting injuries immediately lets workers know their employer wants to see that they’re taken care of. It also gives their claims representatives time to gather all the necessary information to determine whether a claim is compensable.
• Avoid state penalties.
  States limit the amount of time between when an employer learns of an injury, and when the claim is accepted or denied. If the claim isn’t reported to SFM in time to meet the deadline, the employer could face fines.
• Get more out of accident investigations.
  Reporting right away gives employers and claims representatives the best chance of finding out exactly what happened while it’s still fresh in the minds of the employee and witnesses. This helps employers take steps to ensure that a similar injury doesn’t happen again. It also helps claims representatives learn whether the employee’s account of what happened is accurate and identify any third parties that might have been at fault.
• Take full advantage of the nurse option.
  Injured workers can get a treatment recommendation from a registered nurse when employers report immediately through the SFM Work Injury Hotline. This can prevent unnecessary hassles and costs and get the injured worker the best care for the injury — whatever that may be.

Encourage employers to report injuries to SFM first

To reap the benefits of reporting right away, it’s important to have employers report injuries directly to SFM first, rather than your agency. If you would like to be notified immediately anytime a claim is reported, you can set up alerts in SFM Agency Manager (SAM). Click on “manage alerts,” and then select the “FROI received” alert option.

For your clients, our Work injury claim packet is a handy resource that employers can reference to help them report and manage workplace injuries.

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You can now set up AutoPay and one-time payments for your customers while binding new business in SAM.

Quick tips:

• To set up payments, you’ll need to have your customers’ financial account information on hand when you bind.
• We accept credit cards for accounts under $10,000 in premium.
• For AutoPay, we require that you keep a consent form signed by the policyholder on file at your agency. You do not need to return this form to SFM.
• Your customer will be able to manage AutoPay after binding by creating an account at sfmic.com/pay.
• Adding payments is optional. You’ll still be able to continue through the binding process without adding payment information.

To change or cancel AutoPay, you will still need to contact SFM’s billing department, or have your policyholder create an account at sfmic.com/pay. We plan to add this ability to SAM in the future.

We’re adding this new feature in response to agent feedback. We hope it will streamline the process of setting up AutoPay for new customers for you and your agency.

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Since SFM was named a servicing carrier for the Wisconsin Worker’s Compensation Insurance Pool in late 2021, new pool business has been coming in steadily and is currently ahead of plan.

SFM is one of five servicing carriers who are each handling 20% of the Wisconsin residual market as part of a five-year contract with the Wisconsin Compensation Rating Bureau (WCRB). SFM anticipates hitting the full 20% in Wisconsin assigned risk pool premium – approximately $12 million – by the end of the first quarter of 2023.

Staff expansion

To service this continued growth, SFM is expanding its Wisconsin-based assigned risk pool operations. As part of the WCRB contract, SFM initially only onboarded new business, and renewal business was kept with existing servicing carriers. As we get close to the one-year mark and in anticipation of the first round of renewals in January 2023, we added a premium auditor to our Wisconsin-based staff. We also recently hired a local claims representative. We plan to hire a second Wisconsin auditor who also has safety experience to provide both premium audit and loss prevention services to Badger State residual market employers.

Directing your clients

Agents and employers in the Wisconsin Worker’s Compensation Insurance Pool can find resources and contact information in the “State programs” section of sfmic.com.

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We know your days are busy, and we continue working to streamline processes and offer time-saving tools to our agency partners.

Over the past few years, we’ve added the following tools for agency partners:

• IVANS Download
• Electronic funds transfer (EFT) commissions
• Credit card payments for small business customers
• Quick class code checker tool in SFM Agency Manager (SAM)
• Ability to change effective dates after quoting in SAM

More enhancements underway

Our work toward adding efficiency for agents continues.

SFM has entered into agreements with both IVANS and Vertafore to better understand how we can integrate with their distribution platforms.

Through these partnerships, we intend to explore opportunities to allow agents to quote and submit risks to us within their agency management systems. We expect this to be a multi-year effort, and SAM will continue to be available for agents to easily submit business to SFM online.

We continue to work on SAM enhancements as well. Work is currently underway to allow agents to set up AutoPay or make the first payment while binding in SAM.

We value agent feedback

Many of our enhancements start with feedback from agents via surveys and suggestions made to SFM underwriters and employees.

Thank you to the many agency partners who completed our recent survey. We read every response and consider all suggestions.

If you have a suggestion, please don’t hesitate to share it with your underwriter, or contact us using another method.

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By John Hollick, JD, SFM Chief Defense Counsel

Nationally, many states have been enacting laws regarding medical marijuana, recreational marijuana and hemp-derived substances. Given the prevalence of THC-infused products, employers are asking about the impact of these potentially intoxicating substances on the workers’ compensation system.

For example, in Minnesota consumers can now purchase THC-infused food and beverages. The THC must be hemp-derived, and there are no restrictions on who can sell these products or where they can be sold. Hemp, which is legal on the federal side, has less THC (the substance in marijuana that produces the “high”) than the typical marijuana plant. The THC edibles in Minnesota could be consumed as gummies, milk chocolate, snacks or beverages.

This has left employers wondering whether they need to be more concerned about the potential for THC-intoxicated employees to become injured on the job, and if these intoxicated employees would then get workers’ compensation benefits.

Look to state laws

Many states, including Minnesota, have several exceptions to the typical workers’ compensation no-fault system. One exception is the so-called “intoxication defense.” Minnesota’s law, which was first enacted in 1953, states that if the intoxication of the employee is the proximate cause of the injury, then the employer is not liable for workers’ compensation benefits. The burden of proof, however, is on the employer.

Iowa law states that if an injured employee fails the post-injury alcohol and drug tests, they will then carry the burden of proof to show that they were either not intoxicated, or that the intoxication was not the substantial factor in causing the injury.

In Wisconsin, the law states that if the employee is in violation of an employer’s policy regarding alcohol or drug use and that violation causes a work injury, the employee would lose all their rights to workers’ compensation benefits, except medical.

Colorado, which has had medical and recreational marijuana legalization in effect for several years, has one of the tougher laws. It states that if a drug test indicates the presence of a controlled substance, including marijuana, in the employee’s system during working hours, then it is presumed that the employee was intoxicated, and the injury was caused by the intoxication. The employee would then have to rebut this presumption by presenting clear and convincing evidence. Indemnity benefits would be reduced by 50% if the employer prevailed on this defense, but medical benefits would not be affected.

What can employers do?

The best way employers can control work comp costs is to prevent injuries and have solid safety programs. A clear and communicated handbook policy on intoxication is important.

It is also important to report workers’ compensation injuries in a timely manner to your work comp insurer or administrator, and if intoxication could be an issue in causing the work injury, early investigation and identification of witnesses is important. An employer should also consult an attorney if they are considering a drug testing program as some states, including Minnesota, have complex drug testing laws.

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

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