Chesapeake Employers Rewards PolicyHolders
Maryland’s Largest Work Comp Insurer Will Award Millions to Employers
Chesapeake Employers’ Insurance Company (CEIWC) will distribute $15 million in surplus profits to policy-holding employers, announced the firm’s board of directors in a media release earlier this year. According to the media statement, CEIWC amassed the surplus due to its healthy financial performance. (Healthy financial performance can also be defined as bringing in a lot more in premiums than the company is forced to pay out to injured workers.) The company is the largest workers’ compensation insurer in Maryland, with more than 20,000 policyholders by recent published account.
The surplus will be distributed in the form of corporate dividends to qualifying policyholders beginning May 2023. Only “safety conscious” employers who meet specific performance standards will receive dividends. In the statement, company CEO Tom Phelan described the dividends as a reward for “Maryland employers that…share in our mission of championing workplace safety and strive to keep their employees safe on the job.”
2023 will mark the sixth consecutive calendar year that CEIWC has disbursed millions in dividends to policy-holding employers. The company announced $15 million in dividends for 2022 and distributed $10 million in dividends from 2018 through 2021 – a total of $70 million in bonus funds to employers. (Chesapeake, as a company, has been around quite a long time. It changed it’s name, partially, to Chesapeake about ten years ago.)
CEIWC’s recent overall surplus holdings dwarf its policyholder dividends. According to the most current available balance sheet included in its 2020 annual report, the company amassed a total surplus of $1.03 billion that year alone. This amount includes over $187 million in earned premiums, more than $57 million in net investment income, and nearly $2 million in underwriting gains. The report outlined several factors contributing to CEIWC’s massive surplus, such as reduced prescription costs, a subrogation unit dedicated to third party claim offset, and a broad company policy of pursuing settlement as a “sound business decision to mitigate the long-term cost of the claim.” (See p.5 of the annual report.)
At the end of the day, what it means is that the company has done a good job not paying injured workers. Sure, that can mean less on the job injuries. However, it also means less money paid to the individual injured worker. By definition, if it’s a “sound business decision to mitigate the long-term cost of the claim,” that means paying less. In all, Chesapeake made about $87 million in 2020.
If you are an injured worker trying to file a claim with Chesapeake Employers, trying to negotiate with Chesapeake, trying to get medical care from Chesapeake, or any other dealings … we strongly urge you to get a workers’ compensation lawyer who knows what they’re doing. (We certainly do, but we’re not the only ones.) Chesapeake, and every other workers’ compensation insurer in Maryland, is designed to minimize workers compensation payouts. That’s their business. It’s not personal, it just is.