LCTA Workers’ Comp recently announced its expansion into Mississippi and Arkansas – the move follows the company’s conversion to a casualty insurance company after 25 years as a group self-insurance fund. Louisiana Comp Blog talked to Troy Prevot, Executive Vice President of LCTA, who also guided the company through the transition at the beginning of the year, about the insurer’s new markets and growth strategy.
When LCTA converted, Prevot and the company were transparent about their plans to expand to other states, and possibly other lines of business – much like other Louisiana funds that converted, like LUBA Workers’ Comp – but specifics were unknown until recently.
Business in Mississippi, a popular expansion choice for workers’ comp insurers domiciled in Louisiana, is “rolling along,” according to Prevot. As for the other states? “Arkansas was always in the works as well,” he explained. “We have the license and we expect to start writing business there after the first of the year. We also have plans to add another state [with a market composition] similar to Louisiana in the relatively near future.”
Asked whether the company is also considering our neighboring states with much bigger markets, like Texas and Florida, Prevot was firm, saying that Texas is not on its radar at the moment and that he “wouldn’t touch Florida with a 10 foot pole – even Texas is more stable.”
Both the conversion and the expansion of LCTA is taking place in an incredibly soft market for workers’ comp, which has squeezed companies of all sizes in recent years with no end in sight. Growth (and even stability) in this environment is understandably difficult, however, Prevot feels confident that LCTA can weather the storm and progress at the same time.
“We’re working on something moving into next year that we feel will position us for good growth in the face of this soft market, and our strategic growth plan is solid and reflects the current market conditions,” Prevot said.
As part of this strategy, LCTA decided to forego an A.M. Best rating, which most mutual insurance companies pursue to display their financial strength, which translates to consumer confidence. Prevot explains that decision to go unrated simply: “We didn’t want somebody else telling us how to do business,” he said. “We want a rating [eventually], but not at this time.”
As such, instead of using a Best rating, LCTA has turned to its agent partners for new business in its current expansion states. “I’m glad you asked about [the agency relationships],” Prevot said. “Right now we want to leverage our existing relationships here in Louisiana to those new states, and then we’ll make new friends down the road.”
Indeed, existing relationships will likely be a key part of LCTA’s success in this time of dynamic change for the company, both with agencies and with policyholders that were LCTA insureds before the conversion and expansion.
“Our current policyholders will get the same level of service they expect from us for sure,” Prevot explained. “What this move really does is provide an even further benefit to our employers that are multi-state. It also makes us more stable because we’re diversifying […] and not just dependant on the ebb and flow of one market.”
Learn more about LCTA Workers’ Comp on their website here.