By Lenny Giteck

Joe Carter is Vice President, Business Development & Marketing for United Educators (UE), a large RRG that insures approximately 1,600 colleges, universities, and other educational institutions around the country. We recently asked Carter how UE has been coping with COVID-19, as well as what he thinks the pandemic’s ramifications for the RRG industry will be. Here is what he told us:

How has United Educators adjusted to the new reality we all face?
As soon as it became clear that the spread of the disease was coming and coming fast, we held a drill to prepare ourselves. We all took our laptops home, and for one day we did a trial run to operate our business virtually. We learned a lot from that day: We saw what was working operationally and what was breaking down. We debriefed on these issues and prepared ourselves before our state issued the shutdown order.

How soon after that did UE decide to go virtual?
Just a few days later— within a week, I’d say. We wanted to be able to focus on the schools we serve rather than worrying about operating in our office. Many of the schools were already beginning to have a rough time, and going virtual enabled us to stabilize our own operations to be able to focus on our business with them.

When you think about everything that’s involved in shutting down a college or university campus, and for an entire educational institution to forge ahead virtually, it’s daunting. It actually feels easier for United Educators to do that than for many of our 1,600 members.

What have the schools been concerned about?
They’ve had a lot of questions about avoiding liability from suspending classes, closing their campuses, about bringing back students who were abroad, keeping them from becoming infected while they’re coming back — those are just a few matters they have been concerned about.

What else?
Many would worry about financial problems that may arise as enrollments may suffer from this.  That could lead to any number of problems, including accreditation.  And of course, there is the whole question about the return of athletics programs which, for many colleges, is quite a revenue generator. The spring and fall are usually very active sports seasons, and when your athletics program is completely disrupted, how do you deal with planning, recruiting, and physical training given the virtual environment? It’s very difficult.

How has UE helped the schools?
UE continues to research issues, think about possible solutions, and produce materials to help members navigate these uncertain times. We have produced a number of guidance materials to give insight as schools address issues and make decisions.

Earlier today, we held a webinar that drew more than 1,000 attendees. A good portion of the program included insights from three public health physicians on a variety of medical topics, including how to minimize and possibly avoid contagion on campus. Also, two attorneys addressed legal issues around these decisions.

The fact that you insure 1,600 schools must make UE’s job much more complicated and difficult.
I think so. We’ve had to accept that we can’t serve every one of them in the customized ways of the past. Our staff has grown with our membership; however it is important to offer as much risk management using technology as possible as we manage to a solid expense ratio.  We’re continuing to invest in service and constituent experience, and I think we’ve done quite well so far, all things considered.

What impact will the current crisis have on how RRGs do business?
Risk retention groups will need to recognize that many of the businesses they serve are going to struggle financially. Certain personal lines carriers are responding to that by lowering premiums. If that’s possible it ought to be considered.

In a business like ours, however, where we’re insuring liabilities for businesses, educational institutions, it’s difficult to anticipate what liabilities will arise.

That means it’s hard to do much with premiums in the short run. It’s not a good idea to lower premiums before a huge number of claims may come in. With the operations around educational institutions, the possibilities for claims could be significant.

And for a member-owned RRG like UE, if claims experience is better than expected, you obviously could address excess profit by returning some of that to insureds down the road, but that remains to be seen.

What else can RRGs do to help their insureds under these circumstances?
Every risk retention group ought to be working as hard as possible to serve the immediate needs of the businesses they insure. That means talking those businesses through the challenges they face in the here and now.

We need to help insureds understand the potential liability issues around any moves they either need to make or are thinking of making. The process should be a partnership, with the RRGs showing they can be relied upon to provide good judgement.

That’s how RRGs can strengthen their long-term relationships with insureds. The insureds will remember it down the line.