Nationwide, Hourly partner on more nimble workers-comp app

When providing workers compensation coverage to contractors with hourly and remote workers, Nationwide found the fluctuations in activity for these businesses challenging.

Dale Hoppe, vice president and head of the E&S/Specialty WC program division at Nationwide.

The unpredictability made pricing coverage particularly difficult, according to Dale Hoppe, vice president and head of the Excess & Surplus / Specialty Workers Compensation program division at Nationwide.

This led the carrier to partner with Hourly, a workers compensation and payroll services provider that will expand its mobile app platform to underwrite workers comp coverage through the Nationwide partnership. Hourly will serve as managing general underwriter to Nationwide. Coverage for clients will begin August 1.

“We decided that we need to become very fast to become a much more relevant force in the market,” said Tom Sagi, co-founder and CEO of Hourly. “We needed to have our own unique workers comp program. And that’s when we started to look for the right partners. There was a lot of excitement in the industry to work with us because we bring them something that they don’t have.”

Tom Sagi, co-founder and CEO of Hourly.

Hourly ties its payroll data to insurance data so that workers’ comp underwriting isn’t based on old data, according to Sagi. “Workers comp is practically a moving target that is based on payroll,” he said. “No one really knows what’s going to be the amount of payroll for the next 12 months. Everything is based on an audit that happens after the policy expires. That means that insurers are making decisions based on data that is sometimes 12, 18, 24 months old.” 

By keeping closer and more timely track of the risks, Nationwide can “rightsize” premiums, according to Hoppe. This can apply for construction contracting but also many other businesses and sectors with fluctuating activity.

“At the product’s core is what we call pay as you go,” Hoppe said. “An employer obviously will get a workers comp policy. They’ll pay a premium for that policy based on an estimated payroll for the year, but as their payroll changes throughout the year, on a monthly basis, you rightsize the policy. As opposed to being hit with a large workers comp premium a year later, we’ll be able to collect it as a carrier, real-time as that payroll comes on. As a job ends, they may have to downsize their workforce. We can rightsize the worker comp premium to make it more aligned with the actual exposure.”

Nationwide and Hourly spent nine months developing the partnership. They are now accepting submissions for workers comp policies effect on or after August 1. The companies are still working to add the ability to submit workers’ comp claims through Hourly’s app, according to Sagi.