BrickStreet Insurance said it is looking to shed 50 employees in a move to cut costs following the loss of its monopoly in writing workers’ compensation insurance policies to West Virginia businesses.
The action is expected to save $2 million to $3 million, said Greg Burton, BrickStreet’s president and chief executive officer. He said the cuts result from increased competition, not the nation’s economy.
The Legislature created BrickStreet in 2005 in a move to get the state out of the business of providing health and disability insurance to workers injured on the job. BrickStreet started operation in January 2006 and by law had a monopoly until June 30. It still has the monopoly for state and local government coverage until 2012.
“Obviously on June 30 we had all the market share,” Burton said. “We only had one way to go and that was down in relation to market share.”
Since July 1, BrickStreet has lost 3,000 to 4,000 policy holders. The company’s annual premiums fell from $474 million to $350 million, Burton said.
As of last week, BrickStreet was one of 125 companies writing workers’ compensation policies in the state, according to the state Insurance Commission.
Burton said BrickStreet expects to lose additional business next year when it stops writing $15 million to $20 million worth of policies to companies deemed too risky to insure. They range from mining and timbering operations to small companies that don’t have worker safety programs.
“It won’t be until the end of 2009 until we know where the market bottoms out,” Burton said.
Burton said by Dec. 31 BrickStreet would like to cut its 465-employee work force by 50. The number could be as low as 20 or as high as 60, depending on who applies and their position.
Employees could be eligible for up to one year’s salary, or nine months worth of salary and six months of paid health insurance.
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