Five Steps to Cashing in on Group Coverage
By John Davenport

Last year, the president of Hotchkiss Insurance Agency Inc. expected that the newly formed Texas Green Industry (TGI) purchasing group might top $1 million in premium in its first year. He estimated it could reach $2.5 million in three years.

Today, Doug Hotchkiss is very pleased to admit he was wrong. In one year, TGI has grown to over 100 members with over $3.3 million in written premium, making it one of Texas Mutual Insurance Company’s fastest-growing purchasing groups.

How can you enjoy similar success? Use these five steps to develop a workers’ compensation purchasing group into a very profitable program.

1. Find a target market.
Some agents begin by becoming involved with an existing industry association. Others start by developing contacts in an area of their own professional expertise. As you develop a list of potential clients, watch for changes in regulatory requirements that affect the industry you are targeting. Insurance coverage is sometimes a sound way to address the uncertainties created by regulatory changes.

2. Contact your Texas Mutual^® agency representative.
We can provide you a purchasing group application and help you set up the group. Remember, the Texas Department of Insurance (TDI) must approve all workers’ compensation purchasing groups, and TDI limits group participation to Texas employees, as defined in the Texas Labor Code.

3. Understand the benefits.
Purchasing group members receive premium discounts based on the premium volume of the entire group. For example, if a group generates $500,000 in (projected) first-year annual premium, we will give each member a premium discount based on the $500,000 premium level, regardless of their individual premium size. Members also have access to expert Texas Mutual^® loss prevention services.

4. Promote the group.
Purchasing groups are not a “build it and they will come” proposition. Be ready to promote your group to potential members. Some of our most successful groups advertise in agent publications and trade journals, and they attend trade shows and conventions specific to the targeted industry. Setting up a booth at these events is a good way to get some exposure for the group. Be sure you have information on the purchasing group to give prospective clients. If possible, publicize the booth in advance to attract industry members.

5. Work with us.
We can help you spread the word about your group to agents and potential members through our press releases and newsletters. Our agency representatives can occasionally serve as keynote speakers during association meetings.

For more information about Texas Mutual^® purchasing groups in general, click here, or call an agency representative at (800) 859-5995.