The majority of small businesses would like to offer health insurance to their employees as it allows them to attract and retain high-caliber talent. But the expense involved can be a major constraint.
The National Small Business Association's (NSBA) found that only 41% of firms with zero to five employees offer health care benefits, down from 46% a year ago. The situation is slightly better when all firms with less than 500 employees are considered with 65% of employers in this category offering insurance benefits.Rising costs and the complexity of the health care system are among the reasons for the reluctance of small business owners to provide this essential benefit.But it is possible for companies to reduce their expenses on insurance. - The age profile of your employees and the pre-existing conditions they have will determine which of the two options is more economical. A group rate may be cheaper as the premium you have to pay is based on the rate applicable to people with the same demographic profile. You will be better off with this option if your employees are more susceptible to chronic diseases.On the other hand, staying with individual plans may cost you less if each of your employees attracts a lower premium.There is no simple formula to determine whether a group plan or a bunch of individual plans will save you more money. The best way to find out is to ascertain the insurance premium payable under each option.If you are of the view that you don't have the number of employees that are necessary to qualify for a group, don't worry. Even two employees are enough. - Many small business owners think that the annual premium figure cannot be lowered. But this is not true. Health insurance premiums can be negotiated, especially by firms that have between 50 to 99 employees.When an insurance company raises rates, they usually refer to the fact that all the employees have become a year older. Employers should point out factors in their favor. They may have implemented an extensive wellness plan in the last 12 months which could have resulted in healthier employees. Some older employees may have retired or resigned.
Sunday, August 31, 2008
How to Save on Health Insurance
The majority of small businesses would like to offer health insurance to their employees as it allows them to attract and retain high-caliber talent. But the expense involved can be a major constraint.
The National Small Business Association's (NSBA) found that only 41% of firms with zero to five employees offer health care benefits, down from 46% a year ago. The situation is slightly better when all firms with less than 500 employees are considered with 65% of employers in this category offering insurance benefits.Rising costs and the complexity of the health care system are among the reasons for the reluctance of small business owners to provide this essential benefit.But it is possible for companies to reduce their expenses on insurance. - The age profile of your employees and the pre-existing conditions they have will determine which of the two options is more economical. A group rate may be cheaper as the premium you have to pay is based on the rate applicable to people with the same demographic profile. You will be better off with this option if your employees are more susceptible to chronic diseases.On the other hand, staying with individual plans may cost you less if each of your employees attracts a lower premium.There is no simple formula to determine whether a group plan or a bunch of individual plans will save you more money. The best way to find out is to ascertain the insurance premium payable under each option.If you are of the view that you don't have the number of employees that are necessary to qualify for a group, don't worry. Even two employees are enough. - Many small business owners think that the annual premium figure cannot be lowered. But this is not true. Health insurance premiums can be negotiated, especially by firms that have between 50 to 99 employees.When an insurance company raises rates, they usually refer to the fact that all the employees have become a year older. Employers should point out factors in their favor. They may have implemented an extensive wellness plan in the last 12 months which could have resulted in healthier employees. Some older employees may have retired or resigned.
The National Small Business Association's (NSBA) found that only 41% of firms with zero to five employees offer health care benefits, down from 46% a year ago. The situation is slightly better when all firms with less than 500 employees are considered with 65% of employers in this category offering insurance benefits.Rising costs and the complexity of the health care system are among the reasons for the reluctance of small business owners to provide this essential benefit.But it is possible for companies to reduce their expenses on insurance. - The age profile of your employees and the pre-existing conditions they have will determine which of the two options is more economical. A group rate may be cheaper as the premium you have to pay is based on the rate applicable to people with the same demographic profile. You will be better off with this option if your employees are more susceptible to chronic diseases.On the other hand, staying with individual plans may cost you less if each of your employees attracts a lower premium.There is no simple formula to determine whether a group plan or a bunch of individual plans will save you more money. The best way to find out is to ascertain the insurance premium payable under each option.If you are of the view that you don't have the number of employees that are necessary to qualify for a group, don't worry. Even two employees are enough. - Many small business owners think that the annual premium figure cannot be lowered. But this is not true. Health insurance premiums can be negotiated, especially by firms that have between 50 to 99 employees.When an insurance company raises rates, they usually refer to the fact that all the employees have become a year older. Employers should point out factors in their favor. They may have implemented an extensive wellness plan in the last 12 months which could have resulted in healthier employees. Some older employees may have retired or resigned.
Monday, August 25, 2008
The Hartford to Acquire Specialty Insurer Navigators in $2.1 Billion Deal
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The Hartford Financial Services Group has agreed to acquire specialty insurer The Navigators Group in a transaction that values Navigators at approximately $2.1 billion.
The Hartford Financial Services Group has agreed to acquire specialty insurer The Navigators Group in a transaction that values Navigators at approximately $2.1 billion.
Under the terms of the agreement, Navigators stockholders will receive $70.00 per share in cash upon the closing of the transaction. The $70.00 per share offer price represents a multiple of 1.78 times Navigators’ fully diluted tangible book value per share as of June 30, 2018 and an 18.6 percent premium to the 90-trading-day average stock price.
The agreement includes a “go-shop” provision designed to afford an opportunity for other potential acquirers to determine whether they are interested in proposing to acquire Navigators. Under this provision, Navigators will have 30 days to solicit competing acquisition proposals. If the board of directors accepts a competing proposal during the “go-shop” period that The Hartford does not match, the successful competing bidder would pay a termination fee to The Hartford.
The Hartford said it has sufficient existing resources to fund the total purchase price of approximately $2.1 billion, but will consider alternative sources of capital prior to the closing. The Hartford said it does not intend to issue common equity in connection with the acquisition.
For 2020, The Hartford said it expects the acquisition to be accretive to net income by $30 million to $75 million and to core earnings by $60 million to $95 million. The estimated accretion is comprised of a contribution by Navigators of $80 million to $125 million to net income and $110 million to $145 million to core earnings, offset by a reduction of approximately $50 million in The Hartford’s net investment income, after tax, due to the cash used to fund the acquisition.
Stamford, Conn.-based Navigators is a global insurance holding company that specializes in maritime, construction, energy, environmental, professional services and life sciences — 22 vertical markets in all — and it has relationships with global retail and wholesale brokers. It has offices in the United States, the United Kingdom, Continental Europe and Asia.
In addition to an established presence at Lloyd’s, the company also has growing underwriting operations in Europe, Asia and Latin America. The company currently operates three business segments: U.S. Insurance (58 percent of 2017 gross written premiums), International Insurance (29 percent) and Global Reinsurance (13 percent).
The Hartford’s Chairman and CEO Christopher Swift said the deal will expand his company’s product offerings and geographic reach, and add “tenured and proven underwriting and industry talent while strengthening our value proposition to agents and customers.”
Navigators has approximately 820 employees globally who will join The Hartford upon closing. Approximately 600 of its employees are based in the U.S. and 150 are located in the U.K. Its U.S. offices include sites in New York, Chicago, Houston, San Francisco, Los Angeles, Atlanta and Seattle.
The Hartford said the Navigators business is “highly complementary” to its current commercial lines portfolio with added specialty and surplus lines capabilities and reduced workers’ compensation concentration. It is also complementary geographically and its Lloyd’s platform will help support future specialty lines growth. Navigators has specialty lines coverages and markets where The Hartford does not currently underwrite or have a significant market presence, including marine, energy, environmental, construction wrap ups, international and the deal increases the scale of The Hartford’s existing positions in construction, professional liability, financial products and life sciences.
Hartford President Doug Elliott said the insurer remains focused on small and middle market commercial lines but going forward this business could have “a bit more of a specialty edge” to it with the Navigators addition.
Combined the two will have more than $8.2 billion in commercial lines net written premiums — which would rank it seventh among U.S. commercial lines insurers.
Swift told analysts he found the deal attractive both financially and strategically. He said it came together fairly quickly over four to five months of talks.
“This transaction will result in the realization of significant value for our stockholders,” said Stanley A. Galanski, Navigators president and CEO. “It is a testament to the caliber and dedication of our people and the strength of our underwriting culture.”
In previous calls with analysts, Swift has said the insurer was prepared to use its excess capital for an acquisition if a suitable opportunity arose, particularly in commercial lines specialties and verticals where it has already recently done “bolt-on” transactions including Maxum excess and surplus, Aetna group and life, and Foremost small business accounts. He said the insurer was interested in targets with up to $2 billion in premium.
Navigators matches that target. For the full year 2017, Navigators reported gross written premiums of $1.7 billion and net written premiums of $1.3 billion. Its combined ratio for the full year 2017 was 103.2, the first time since 2011 it failed to come in under 100. Net income was $40.5 million and net operating earnings were $35.0 million. About 58 percent of its gross written premium is in the U.S. Its global reinsurance business is largely focused on accident and health.
In June, Navigators completed its acquisition of Belgian specialty insurer Bracht, Deckers & Mackelbert NV, a specialty underwriting agency, and its affiliated insurance company, Assurances Continentales – Continentale Verzekeringen NV, and a Luxembourg reinsurance company, a wholly owned subsidiary of ASCO.
The transaction has been approved by the boards of directors of both companies and is subject to approval by Navigators’ shareholders and other customary closing conditions, including regulatory approvals. It is expected to close in the first half of 2019.
Completion of the transaction is not subject to any financing conditions.
Navigators’ founder, and shares controlled by other members of his family, which represent approximately 20 percent of total shares outstanding, have agreed to vote in support of Navigators’ transaction with The Hartford.
In 2013, The Navigators Group moved its corporate headquarters from Rye Brook, N.Y. to Stamford in an agreement under which it received a 10-year, no-interest loan of up to $8 million and a grant of up to $3.5 million from the state of Connecticut contingent on the company reaching certain job milestones.
Goldman Sachs & Co. and Moelis & Co. acted as joint financial advisors and Sidley Austin acted as legal advisor to Navigators in the transaction. Citigroup Global Markets acted as lead financial advisor to The Hartford, with Deutsche Bank Securities Inc. also providing financial advice. Mayer Brown provided legal counsel to The Hartford.
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