About

Stuart Cytron

Principal, Cytron Group LLC

The Beginning

Everyone, or someone close to them, has had a horrible personal experience with an insurance company; either through one’s personal insurance or professionally through her business (Even if you think you’ve been unscathed, it could be happening right under your nose).

It was through such an experience more than 25 years ago that I was educated about the needlessly complicated (and frequently error prone) pricing system of workers’ compensation insurance.

A large, well-known insurance company tried to take my employer for several hundred thousand dollars. That’s where the story of my career and business begins.

I had a position with a large contractor doing finance-related work. Work comp was a major expense for us, and it was an important piece of the pricing structure for our new business proposals. I thought I knew a lot about work comp premium determination. I tracked our Experience Mod and went through renewals, payroll audits, etc. from the client side a few times.

Surprise Audit Results

Our CFO informed me one day that our work comp carrier had completed the annual payroll audit, reclassified our entire operation into a higher-rated (more expensive) class code, reopened the prior year's audit to do the same, and sent us an additional premium bill for a lot of money; hundreds of thousands.

That didn't make sense to me at all. This company had been in business for a long time (2 generations of family ownership) and had never "told" anybody how the business should be classified. We were always assigned classifications.

We had a broker from a large, reputable firm as a trusted advisor and a long-term insurance carrier relationship whose auditors visited annually. Wasn't it the insurance carrier and/or our broker who determined this? Why was it our responsibility to pay the insurance carrier after policy expiration for something it got wrong?

This Couldn't Happen Anywhere Else

Seemed to me like a car dealer calling you 12 months after you purchased a vehicle, asking if you're happy with it, and then adding "oh, by the way, we mispriced your car and you should have paid more, so, we are sending you a bill." Of course, that would never fly. The thought of writing the insurance company a huge check in these circumstances was infuriating.

At this point we called our broker only to find out quickly that a broker isn’t an auditor or premium expert. Where can you turn for assistance? Who could I call?

We told the insurance company to go "pound sand" and they, in turn, filed a lawsuit.

Entirely Preventable

Regardless of whether or not the insurance company was right (they weren't), they could have prevented the entire mess by doing the due diligence they should have undertaken before writing the policies.

They could have and should have (I know now) done a preliminary test audit to make sure they understood our operations and classified them properly before writing the business. If we didn't like their conclusions, we could have spoke to other insurance companies, requested an NCCI inspection, etc. We would have had options.

So, instead, this insurance company's standard operating procedure seemed to be "just write the business and we'll correct anything we need to at audit."

Cascading Problems

During legal proceedings, it was possible that the result would be that the reclassification was right, properly endorsed, and we would lose our case. So, had we for years underpriced all of our jobs?

How should we price our ongoing jobs and bids? Could playing it safe by increasing our estimate of Workers Compensation Insurance reduce our competitiveness and cost us new jobs?

Additionally, now there was an expensive, full-blown legal battle with no certainty about the outcome. What a mess! And, as we know, all preventable.

Jimmy "Numbers"

Our attorney hired an expert witness who fought the reclassification and, in the process, discovered numerous other errors unrelated to the lawsuit that increased our premiums!

(Our expert was/is a fan of Mafia movies and we decided he could play a mob accountant who we'd call Jimmy Numbers)

Guess what?! The insurance carrier's attorneys dropped the lawsuit and never refiled after reading our expert's deposition.

Errors the insurance carrier made in their own favor:

· Clerical errors

· Data errors

· Audit errors

· Credit programs that were not disclosed

It was at this time that I really started to think “What a mess!” Remember our fear that maybe we had underpriced our work for two years? Heck, we overpriced ourselves! We could have structured less work comp expense in our proposals. Maybe we would have won some additional work. Lost sales!

And, none of these errors were "hiding in plain sight." They were errors that only an expert would be able to look for and uncover. What started out as a dispute over proper classification revealed numerous errors we would have never known about; such as our insurance carrier charging rates they hadn't filed with the state!

The problems with insurance, in my opinion, are most pronounced with workers’ compensation insurance:

· Very Expensive

· Lack Of Transparency

· Needlessly Complex Pricing System

· Hidden Charges

· Undisclosed Credit Programs

Cytron Group LLC Is Born

The whole experience was such an eye-opener for me that I "wanted in." I wanted to know what this expert, Jimmy Numbers, knew. I wanted to help hard working business owners save money. I wanted to educate business professionals so that insurance companies couldn't charge improper premiums. In a nutshell, I wanted to deliver some transparency to this system.

So, the Jimmy and I worked side-by-side and he became a mentor and friend to me. We worked together for a long time prospecting for new business, conducting audits, representing clients in hearings, and recovering a lot of money.

Errors were so common that I structured my business as a contingency-fee business which allows anyone to have the benefit of expert review for no out-of-pocket fee. I only invoice customers upon their receipt of insurance company refunds or credits. It just didn’t seem fair to me that the only way for my old employer to dispute the insurance carriers actions (incorrect actions!) was to hire expensive attorneys and consultants.

I wanted to deliver transparency and return control back to businesses. And, I want to do this for you so you don't have to learn about these problems the way I did! Work comp insurance problems reduce our ability to make proper pricing decisions, minimize and/or reduce our overhead, and properly control our businesses.

Going back to the lawsuit, none of us would have thought of the insurance company as doing us a favor of course. But, we would have never known about numerous overcharges made on our work comp program were it not for the carrier aggressively trying to overcharge us even more!

A Quarter Century Later

Cytron Group LLC has more than 2 decades worth of experience and has saved clients millions of dollars in the form of returned overpayments. That doesn't even consider the future savings clients have benefited from in terms of reduced rates, reduced experience modification rates, etc.

Although we've worked with mostly with small and medium sized business, our customers do include large risks with hundreds of millions of dollars in payroll, full-time risk managers, and representation by the largest brokerage houses in the world.

While we can’t promise to deliver transparency and control in all aspects of your business, we can give you this peace of mind with respect to your workers’ compensation insurance costs if you just reach out.

Stuart Cytron ● stuart@cytrongroup.com ● (314) 757-8079