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TYLER, Texas-A new third-party claims administrator is hoping a down-home approach will appeal to some of the country's largest self-insurers.
Platinum Safety & Claims Services L.L.C. this month began offering claims administration and safety services to Fortune 1,000 companies from its base in Tyler, Texas, about 90 miles east of Dallas.
The new TPA is a joint venture of brokers Lowndes Lambert U.S. Holdings Inc. and Tyler-based Hibbs-Hallmark & Co. Lowndes Lambert U.S. is a Dallas-based unit of Lowndes Lambert Group Holdings P.L.C. of London.
The creation of Platinum Safety & Claims is the first formation of a TPA of any significant size that industry experts can recall in recent years.
It was the personal touch at Hibbs-Hallmark and its sister TPA company, Claims Administrative Services Inc., that drew Lowndes Lambert U.S. to the venture, explained Richard Kerr, chairman and chief executive officer of Lowndes Lambert U.S.
CAS had carved a niche to provide TPA services to independent school districts in Texas, all of which are self-insured, he explained.
After hearing numerous complaints from employers about the quality of TPA services, Lowndes Lambert U.S. began searching for a way to provide a more personalized service, Mr. Kerr said.
The personalized style of CAS and Hibbs-Hallmark was appealing enough to inspire the formation of a new company that would use such a philosophy to service large U.S. employers.
"They have established a service culture that we couldn't find anywhere else," Mr. Kerr said of the Tyler-based companies.
Platinum is targeting employers that self-insure through captive insurance companies, assume large self-insured retentions or have in place large-deductible workers compensation insurance programs.
Apart from claims administration, the TPA will provide such services as ergonomic studies, loss control engineering and classes that will teach workers how to maintain safe workplaces.
In a highly competitive marketplace, Platinum hopes the down-home touch can give it an edge.
"We've been able to take rural America and instill it into corporate America," Mr. Kerr noted. "It may sound a little bit cliche," he added, but the work ethic outside large metropolitan areas "is a little different. . .It's more of a family-type atmosphere."
The Tyler operation, staffed by about 65 employees, already has snagged a handful of clients, he said. "The Fortune 1,000 companies are eating it up."
The idea of offering a more personalized service has appeal, said Richard S. Betterley, president of Betterley Risk Consultants Inc. of Sterling, Mass.
"That's perfect," he said. "If you think about what frustrates the customer, it's the service level, the lack of that personal touch. That's a very appealing message."
"It's a very competitive field right now," said a spokesman for the Self-Insurance Institute of America Inc. "You are finding that employers are expecting more from TPAs. They want them to be proactive," providing an array of services that result in lower claims costs, he added.
There haven't been a lot of new competitors in the TPA market in recent years, Mr. Kerr pointed out. "I can't find a new TPA of any significance that's been formed in the last seven or eight years."
The SIIA spokesman pointed out that mergers and acquisitions, rather than new formations, have marked the TPA market in the past five years.
The number of TPAs over that period has dwindled to about 900 from about 1,500, he said. "There are becoming very few mid-sized TPAs. They are either very big or very small."
It makes sense for Platinum to narrow its focus to self-insured employers like those with high-deductible workers comp plans, said a spokesman for Atlanta-based competitor Crawford & Co. Otherwise, it would be tough to compete with companies like Crawford & Co. that have been around for many years and have established a broad range of services and clients, he added.
"Competition makes the whole thing work," the spokesman said. "One more won't hurt us, and maybe we can learn something from them."