Snap Poll of WC insurers on handling practices of PEOs

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31 January 2021

Available Only for Members of the NA Celent Insurance Research Panel


Snap poll reflect questions asked by members of the Celent Executive Research Panel, a group of over 500 C level executives in the insurance industry representing approximately 480 insurers. Questions for a snap poll come from one of the other members of the panel. This snap poll was conducted January 26-27, 2021.

The snap poll was fielded only to those members that write WC – a subset of approximately 135 members. 18 Insurers responded to this survey over the course of 48 hours.

The question that was posed was:


This member of the research panel has a question about how other insurers manage PEOs. As background, PEOs are Professional Employment Organizations. Workers are employees of the PEO who provides WC coverage, benefits, and pays their salary - but the worker actually performs work for another business that has contracted with the PEO for their services. They find PEOs to be complex for a few reasons and are wondering how others manage them. Some of the challenges include:

  • Some employees show up as employees of the PEO. But some businesses that have contracted with the PEO need to have a standalone WC policy under their name in order to satisfy the bureau and track ex-mods. They need to have premium, payroll and losses segregated. These businesses then need to be rolled up under the PEO in order for the insurer to see the overall results of the PEO. Managing these relationships can be complex.
  • Tracking the employees by class code as they generally do not pick up the class code of the PEO, but of the employer that has contracted with the PEO. That could be an office but could also be a manufacturer. These employees are also at many locations.
  • Managing and approving new clients. The insurer wants to ensure they aren’t taking on new clients that don’t meet their UW appetite.
  • Managing proof of coverage (e.g. COI, coverage documents) for the client companies - since the insurance is actually in the name of the PEO.


  • Do you provide WC insurance for PEOs?
  • If yes, are you:
  • Using the functionality in your existing policy administration system to manage the PEO? What system is that?
  • Using a different off the shelf vendor solution? What system is that?
  • Using a homegrown solution?
  • Have you been able to solve the problems above with those solutions?
  • How do you manage the different entities between those that are issued on a standalone basis and those that are included within the PEO polic?y
  • How do you manage the class codes for the employees of the PEO?
  • How do you manage the multiple locations for the employees of the PEO?
  • Do you have a process to manage and approve new clients of the PEO to assure you’re not inadvertently adding unacceptable risks?
  • How do you manage proof of coverage for the clients of the PEO?
  • Are there any other issues you face? And have you solved them?

About Celent’s Research Panel

The Celent Research Panel is a free knowledge sharing resource for senior technology and operations executives at insurers in North America.It provides an easy way for executives to share information, obtain quantitative data, and learn from each otherthrough regular ongoing surveys, snap polls, round tables, and webinars.If you are interested in joining the Celent research panel, you can reach out to Karlyn Carnahan kcarnahan@celent.comor Dan McCoach