Thinking locally pays off for company

By DON SHILLING
VINDICATOR BUSINESS EDITOR
BBOARDMAN COMPANY NEARLY doubled its client base last year with a simple sales pitch -- Mahoning Valley companies should be doing business with other local companies.
"Why should our money be going to Columbus?" asked Joseph Barak, vice president of sales and marketing for Professional Risk Management.
The 21-year-old company has a rapidly growing division that administers workers' compensation claims for employers. It's a business whose main competitors operate out of Columbus so they can be close to government offices.
PRM has a different strategy -- it's best to be close to customers.
"If a company has a problem, we can be there in five minutes," Barak said.
The marketing strategy worked. PRM added 430 new clients during a sign-up period that ended in January, giving its workers' compensation operation 1,000 clients.
PRM, whose main business is working as a third-party administrator for health benefits, began its workers' compensation business 10 years ago, but it wasn't until a year ago that it began focusing on that side of the business.
Focus: Ronald Blasko, PRM president, said he increased the marketing of the workers' compensation services because there was little growth in its health care business.
"We just beat the bushes and got out there," he said.
In addition to stressing the local connection, the company has succeeded by providing good service and low enrollment fees, Barak said.
Blasko said he expects the same level of growth this year as the company becomes even more visible by advertising on billboards.
PRM has 65 employees and is looking to hire more, compared with 47 in 1992 and 10 in 1987. The business was started by his father-in-law, James White, in 1981. He retired in 1997.
Blasko said the workers compensation division had about $500,000 in sales last year, but he expects it to reach $1 million this year.
Companies such as PRM take employers and place them in groups of similar companies, which allows the employers to pay lower workers' compensation premiums. Blasko said state law changed in 1995 to allow companies to form groups.
Besides handling paperwork, PRM has lawyers to attend workers' compensation hearings on claims and investigates claims that it thinks are fraudulent.
Self-insurance: The main part of the business, however, remains administering health care for companies that are self-insured. This business segment had about $4 million in sales last year from about 100 clients.
Blasko said this segment grew rapidly from 1985 to 1995 as more companies turned to self-insurance and saw the advantage of working with a local company. Self-insurance provides coverage to employees through an account established by the employer but managed by a third-party company, such as PRM.
This growth stopped when the stock market began posting large gains in the late 1990s, Blasko said. Large insurance companies came into the area and scooped up business by offering low premiums, he said.
These insurance companies didn't mind losing money on the health-care coverage because they were investing the premiums and making more than enough on those returns to cover the losses, he said.
With the stock market in retreat the past couple years, premiums are rapidly rising, he said. This should present an opportunity for PRM to grow its health care business in the coming years, he said.
The third part of PRM's business is administering Section 125 benefit programs, which allow employees to choose from an array of benefit options.
Blasko said this segment has only a couple dozen clients now, but he expects it to grow.
He said such plans are better for employees because federal law allows them to have money deducted from their paychecks to pay for such items as day care. Such deductions reduce employees' taxable income.
The plans also help employers because the deductions lower their payroll taxes, he said.
With all three parts of the business expected to grow, PRM just agreed to lease more office space. Blasko said he may eventually decide to build a headquarters for the company, which now operates in several buildings in South Bridge Executive Park and South Bridge West.
shilling@vindy.com