Cost effective workers' compensation coverage program for high hazard companies based in California and that are plagued with high experienced modifiers.

1. High Hazard High X-Mod Solution
Program Technical Specs
A viable workers’ compensation
i bl k ’ ti
protection program for your impossible
to place i
l insured's
d'
Superior Support
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Higher Commissions © 2012 Alternative Risk Marketing – All Rights Reserved
Meaningful Rewards

2. Our Specific Niche
• Thi program was specifically
This ifi ll
designed for high hazard insured’s,
with operations in California, that are
plagued with high X mods and which
X-mods
have no coverage choices other than
State Compensation Insurance Fund.
• Ideal insured’s are open to cost saving
insured s
“Alternatives” and are willing to
review such coverage options in order
to reduce operational expenses and
increase cash flow. If your client has
an option or two aside from SCIF, then
this solution may not be for you and
y y
or your insured.
© 2012 Alternative Risk Marketing – All Rights Reserved

3. Agenda
• P
Program Attributes Overview
A ib O i
– Benefit #1: Hard Dollar Savings
– Benefit #2: Ease on Cash Flow
– Benefit #3: A- Rated Protection
• Client Attributes Overview
– Industries
– Manual Rate Attributes
– Preferred Experience Modifiers
– Payroll and Employee Size
• How Savings is Accomplished
• Submissions & Quotes
• Customizable
• Contact Us
© 2012 Alternative Risk Marketing – All Rights Reserved

4. Detailed Overview
PROGRAM BENEFITS
This program is subject to change without notice

5. *Actual savings will vary based on actual gross wages; most recently published X-mod, and the actual arbitrage in rates between the this program and competitor rates.
Benefit #1: Hard Dollar Savings
SAVINGS LOW END MEDIAN HIGH END
Annual Payroll $1,000,000 $1,000,000 $1,000,000
Wages
Savings 2% 5% 10%
Percentage
Cost Savings* $20,000 $50,000 $100,000
*Actual savings will vary based on actual gross wages; most recently published X-mod,
and the actual arbitrage in rates between the this program and competitor rates.
© 2012 Alternative Risk Marketing – All Rights Reserved

6. Benefit #2: Ease on Cash Flow
• D it C i
Deposit Comparison
– TRADITIONAL WAY (SCIF): $75,000
premium x 10-20% deposit =
$7,500 to $15,000 start up cost
– VERSUS
– OUR WAY: Program start up costs:
$500 1x Policy Fee, and 3% of
$75,000 in premiums broker fee =
$2,250 start up for a total of $2,750
to get covered
• Coverage Start Up: $15,000 versus
$2 750 … a N b i
$2,750 No brainer
• Pay as You Go
– Pay for what you use
• N Annual P
No A l Premium A dit
i Audit
– No surprises
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7. Benefit 3: A Rated Coverage
A-
• Rating: A- (Excellent)
– Financial Size: X ($500-750M)
– Outlook: Positive
A.M. Best #: 013055 NAIC #:
17205 FEIN #: 161189206
© 2012 Alternative Risk Marketing – All Rights Reserved

8. Detailed Review (What we’re looking for)
we re
CLIENT ATTRIBUTES
This program is subject to change without notice

9. Typical Risk Participating in Program
• This is the median size
client:
– Gross Payroll:
$1,200,000
– Annual Workers’ Comp
Median Comp Rate:
$12/$1000 or
$144,000 in Annual
WCP
– 30 Worksite Employees
or greater

10. Target Industries
• Transportation
• Furniture M i
F i Moving
• Towing Operations
• Garage Keepers
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• Heavy Construction
• Artisan Contractors
• Manufacturing
M f t i
• Agriculture
• Landscaping
• Janitorial
• Food Processing
• Wholesalers
• HVAC
• Sheet Metal
• Agriculture
© 2012 Alternative Risk Marketing – All Rights Reserved

11. Manual Rate Attributes
• Governing Class Codes
with Minimum Manual
Rates of $9.00 per
$100 in Payroll before
applying X-Mods and
any applicable
surcharges (debits) or
credits (discounts)
© 2012 Alternative Risk Marketing – All Rights Reserved

12. Preferred Experience Modifiers
• Lowest X-Mod
– 120
• Highest X-Mod
– 300
• Preferred X-Mod Range
– 150 to 250
© 2012 Alternative Risk Marketing – All Rights Reserved

13. Payroll and Employee Size
• G
Gross Payroll Range
ll
– Minimum: $350,000
– H h $20 000 000
High: $20,000,000
– Ideal: $750k- $5M
• E l
Employee Size R
Si Range
– Minumum:10
– Hi h 500
High:
– Ideal 25-175
• U d 10% Seasonal or
Under S l
Part-Time Labor
© 2012 Alternative Risk Marketing – All Rights Reserved

14. Current Coverage Issues
• We will consider
– Recently cancelled
insured’s
– Gaps in coverage
– Non-renewed insured’s
– New Ventures
• Owner Resume
• Business Plan Required
© 2012 Alternative Risk Marketing – All Rights Reserved

15. Reduced Operational Expenses for California Businesses
HOW SAVINGS IS ACCOMPLISHED
This program is subject to change without notice

16. Group Based Purchasing Power
• Economies of Scale
• Savings is accomplished as
follows:
– Purchasing power of 3,500
client members i
li b insuring
i
over 60,000 employees
• Group profile:
– Gross Payroll
• $1,500,000,000
– Approx WCP in Force:
• $250,000,000
© 2012 Alternative Risk Marketing – All Rights Reserved

17. Service Distribution Model
T S
h e
e r
v Workers’ Comp Coverage
D i Service Provider Claims Management T
Cl i M t Team
a c
y e
t R
o e
l Exclusive MGU for California Approved Wholesaler
Alternative Risk Marketing
g
D a
a t
y i
o
n Retail Broker
s The Insured
h
i
p
© 2012 Alternative Risk Marketing – All Rights Reserved

18. Group Administrator
• F d d in 1986
Founded i
• Employer Services Group
– 3,500 Business Client Members
– 60,000 Insured Employees
• Top 25 out of 750 Employer
Services Groups Nationally
(based on Revenue and Total
Employees Covered)
• Services included:
– Workers’ Comp Coverage
– Risk, HR & Claims Management
Services More info on Employer Services Groups
– P
Payroll & Tax Administration
ll T Ad i i i May be found at www.napeo.org
• Does not work with Insured’s or
Retail Brokers on a direct basis
in
i CALIFORNIA
© 2012 Alternative Risk Marketing – All Rights Reserved

19. Managing General Underwriter
• I business since 2001
In b i i
• Over 1,500 members added to
group programs nationally
• E l i MGU f S th East
Exclusive for South E t
Personnel in California
• Delivers Underwriting, Broker
Commissions Processing and
Technology capabilities to
Wholesalers and their Retail
Brokers
• Allows the Service Provider to
Focus on Servicing Group
Members
• D
Does not work with R il
k i h Retail
Brokers or Insured’s on a direct
basis IN CALIFORNIA
© 2012 Alternative Risk Marketing – All Rights Reserved

20. About Alternative Risk Marketing
• Role: Responsible for Retail Superior Support
Higher Commissions
Broker Relationship Meaningful Rewards
Management and
M d
Marketing Awareness
• E
Entering i S b i i
i in Submission
Information for Underwriting
and Quote process
• Local support
• Liaison between retail Your wholesaler of choice!
brokers & their clients; and
service group support team
i tt
© 2012 Alternative Risk Marketing – All Rights Reserved

21. About Alternative Risk Marketing
• How we’re different than other
we re Superior Support
wholesalers: Higher Commissions
– We focus 100% on supporting Meaningful Rewards
this program
– We pay brokers typically 1-2%
more commission
commission.
– Your Broker Commissions are paid
directly by the MGU which means
faster and more reliable payment
f d li bl
of compensation (i.e. 1 month in
arrears versus 2 months)
– SPIF rewards for new business Your wholesaler of choice!
paid directly to selling producers:
• Airfare & Hotel
• American Express Cards
© 2012 Alternative Risk Marketing – All Rights Reserved

22. How to Do Business With Us
UNDERWRITING AND
QUOTATIONS
This program is subject to change without notice

23. Submissions: See How We Compare
A Completed Submission Underwriting: Quick No No’s
• Submit 30 Days Prior to Policy • NO
Effective Date
– NO Asbestos Abatement
• Completed Acord 130
– Acord 125 preferred but not required – NO Blasting Operations
– Most have prior years premiums and – NO Seasonal or Part time
Part-time
carrier information employment in excess of 10%
• 4 Years of Fully Valued Loss Runs of gross wages or employee
• Industry Specific Supplemental (most count
versions will do) – NO Roofing
• Explanations of gap in coverage,
losses in excess of $25,000 – NO Risks under $50,000 in
• Ideal lead time: 4 Weeks before WCP
effective date – NO Risks under $350,000 in
• Minimum lead time: 2 Weeks before Payroll Wages
effective date
– submissions@altrisk.net
© 2012 Alternative Risk Marketing – All Rights Reserved

24. Sales Process Overview
1) Completed
Submission to 6) Alternati e Risk Mkg
Alternative 7) Service Agreement
Alternative Risk Mkg coordinates conference Review w/ PEO Pro’s,
call between PEO Pro’s, Broker, Insured
(2-4 Weeks before Broker, Insured
effective date)
2) Non-Binding 5) Alternative Risk Mkg 8) Signed Agreement,
Rate Indication Released coordinates conference Employee Apps, W-4, I-
to Retail Broker call between PEO Pro’s, 9s, Policy Fee Remitted
Broker (review program (7-10 business days
(1-2 Business Days)
( y) and pricing) before effective date)
3) Underwriting 9) Letter of Coverage
4) Binding Quote Certificates of Ins Issued
Approval/Decline Released to Retail to Contractors Board
(4-7 Business Days) Broker
Run First Payroll
© 2012 Alternative Risk Marketing – All Rights Reserved

25. Service Start Up at a Glance
SETTING UP A NEW CLIENT PROCESS:
1. Agreement Signed / Employee
Documents Remitted / Policy and
Broker Fee Paid
2. Welcome Call by South East to Insured
to review documentation and
reporting process
3. If applicable certificates of insurance
issued to state contractors licensing
board (ask for details about
additional certs required prior to
reporting the first payroll)
4. Letter of Assumption – Coverage in
Force
5. Report and fund first payroll
6. Declaration of coverage with policy
number released
7.
7 Clients may terminate service at
anytime with a 30 days written notice

26. Quotations & Broker Commissions
Quote Turn Around Time Commission Information
• Allow 1 to 2 business days for • Licensed Brokers will earn:
a non-binding rate indication – 8% Commission based on
• Allow 3-6 business days for a billed WCP (new/renewals)
binding quote
gq • T producing agencies may
Top d i i
• Sales Support earn up to 9-10%
– The Employer Service Group – Rewards for new business
will directly provide sales paid directly to selling
presentation and on-boarding
producer:
support.
– We will provide on site on
on-site on- • Airfare & Hotel
boarding support for larger • American Express Cards
clients upon request and when
applicable.
© 2012 Alternative Risk Marketing – All Rights Reserved

27. Flexible Solutions
CUSTOMIZABLE

28. Customizable
• Fl ibl O i
Flexible Options f
for
Qualified Risks:
– Clients with $1M + is gross
payroll wages have the option
to run their own payroll using
their own in-house system
y
– Large Deductible Options
Available for large insured’s
with (6) figure premiums
g p
– Loss Sensitive Premium
Incentive (annual premium
refund based on loss history)
– Nominal Deductibles help
reduce out of pocket expenses
and reward clients for
maintaining low losses.

29. Frequently Asked Questions
• Q) Will my client lose their X M d?
li t l th i X-Mod?
– A) No. They will maintain their X-
Mod.
• Q) If my client wants t l
li t t to leave th
the
group can they?
– A) Yes. They only need to remit a 30
days written notice to the provider
provider.
• Q) Is this a Self Insured Program
(SIP)?
– A) N Thi a guaranteed cost
No. This t d t
program with coverage provided by
an A- Rated insurance carrier.
• Q) Is this an employer services group
program?
– A) Yes. For information on what an
employer service group is please visit
p y g p p
www.napeo.org.

30. Contact Us
Alternative Risk Marketing
• Darren Amerson, Vice President -
Relationship Manager
– darren@altrisk.net
– 877-264-8786
• Submissions
– submissions@altrisk.net
b i i @ l ik
• Website
– www Altrisk net
www.Altrisk.net
This program is subject to change without notice
p g j g
© 2012 Alternative Risk Marketing – All Rights Reserved