BrickStreet Insurance is still the dominant workers’ compensation insurer in West Virginia, despite competition from more than 200 other companies.
The Legislature created BrickStreet in 2005 to replace what had been a state-run system. It spun off as a private company the following year and had no competition until the state opened the market in 2008.
As of the end of 2011, BrickStreet handled 50 percent of the workers’ comp premiums in the state, according to the state Insurance Commission.
BrickStreet collected $250.6 million in premiums and its net income was $47.1 million. The Charleston-based company incurred $102.3 million in losses, according to its annual statement filed on Dec. 31, 2011. In 2010, BrickStreet reported $263.8 million in premiums, $52.8 million in net income and $171.1 million in losses.
“The primary thing BrickStreet has done is to reduce the cost of workers’ compensation. It has done that in three ways. They reduced premiums, improved workplace safety and improved claims outcomes” Mountain State Insurance owner Ross Johnson told The Charleston Gazette.
Johnson, whose Charleston company has been in business since 1917, said BrickStreet’s “adjusters are focused on minimizing the cost of claims and expediting medical care. They also work to create safe workplace environments.”
Charleston lawyer James Humphreys said workers’ compensation should be about protecting and supporting injured workers, not about profits for a corporation.
“BrickStreet has made an ungodly amount of money,” said Humphreys, who opposed privatizing workers’ compensation when he served in the state Senate.
BrickStreet has expanded into other states as competitors have moved into the West Virginia market. It has a regional office in Chicago and plans to open another one in Charlotte, N.C.
The company is licensed, or has applied to be licensed, in Illinois, Indiana, Pennsylvania, Maryland, Virginia, North Carolina, South Carolina, Tennessee, Georgia and Alabama, said T.J. Obrokta Jr., BrickStreet’s senior vice president and general counsel.
Obrokta said BrickStreet has fared better than many thought it would when the company began operations in 2006.
“The state gave us a $200 million loan and 10 years to pay it back. We paid it off in 3 1/2 years,” he said.