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Cake, Pinnacol’s offering for small businesses spotlighted in new research

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Cake, Pinnacol's offering for small businesses spotlighted in new research

Awarding-Winning subsidiary cited as surpassing first-year business goals in first two months of operation

DENVER- Pinnacol Assurance announced today that a new case study1 by Forrester Research, one of the most influential research and advisory firms in the world, explores how Colorado workers’ compensation leader Pinnacol beat expectations by creating a new digital platform to offer coverage to small businesses in only nine months, three months before its projected launch.

The study notes that Cake, winner of the 2018 Celent Model Insurer and Digital Edge 50 awards, “has won more customers, increased its profits, and enjoyed higher Net Promoter Scores [a measure of customers’ willingness to recommend a company’s products or services] than expected in the six months since its first policy sale.”

“Pinnacol Assurance had to bear up under the same pressures facing the broad insurance marketplace: growth, new competitors, and emerging tech. It also faced an extra wrinkle: as a political subdivision of Colorado, it faced added regulations,” one passage reads.

“We felt the need to bring to market a workers’ comp solution that incorporated what we know about the needs of Colorado small businesses: it had to be simple, fast and responsive to their individual needs,” said Phil Kalin, CEO of Pinnacol Assurance. “Cake is all of those things and more and more employers are seeing the advantages of using such a low-maintenance, straightforward platform.”

In addition to Kalin, Rob Norris, Cake’s Chief Executive Officer, is noted by Kalin in the case study with possessing ‘the energy and self-direction needed to get the new business launched.’

“We are constantly on the lookout for ways to cut down the friction in meeting customer needs,” Norris is quoted as saying.

In the case study – “Pinnacol Assurance Fights Disruption by Launching A Digital Venture” – Forrester’s Ellen Carney explores how Pinnacol focused on five fundamental considerations while building Cake:

1. Meeting the digital needs of a growing base of small employers,
2. Staying competitive in the small business market,
3. Preserving existing agency relationships,
4. Respecting perceptions of small employers and how their premiums are used, and
5. Ensuring transparency with policymakers and regulators.
Carney concludes that Pinnacol responded to these challenges by:
1. Being fast and simple (weeding out unnecessary steps),
2. Putting the portal in customers’ hands (making Cake mobile-friendly), and
3. Remaining true to Pinnacol’s brand specialty (workers’ compensation).

Carney also highlights the speed with which Pinnacol debuted its new portal.

“While other insurers have stood up new digital businesses aimed at specific markets, these have been multi-year, not multi-month, endeavors,” she writes.
The study reports that in the first two months after its October 2017 launch, Cake exceeded its 2017 revenue projections by 140 percent, and by the end of the first quarter of 2018 surpassed revenue projections by 500 percent. It also notes Cake had above average customer satisfaction and higher profits because 90 percent of Cake’s policies are automated and require no underwriting staff to complete.

Moving forward, Pinnacol is expanding its operating footprint by offering the platform to other carriers.

Access the full research at this link: https://reprints.forrester.com/#/assets/2/1395/RES143411/reports
Read Pinnacol CEO Phil Kalin’s blog about the research.

Media usage guidelines: Media outlets are encouraged to share a direct link to the study in their coverage.

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OPEC, U.S. oil firms expect subdued shale rebound even as crude prices rise

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OPEC, U.S. oil firms expect subdued shale rebound even as crude prices rise 1

By Alex Lawler and Jennifer Hiller

LONDON/HOUSTON (Reuters) – OPEC and U.S. oil companies see a limited rebound in shale oil supply this year as top U.S. producers freeze output despite rising prices, a decision that would help OPEC and its allies.

OPEC this month cut its 2021 forecast for U.S. tight crude, another term for shale, and expects production to decline by 140,000 barrels per day to 7.16 million bpd. The U.S. government expects shale output in March to fall about 78,000 bpd to 7.5 million bpd. [OPEC/M]

The OPEC forecast preceded the freezing weather in Texas, home to 40% of U.S. output, that has shut wells and curbed demand by regional oil refineries. The lack of a shale rebound could make it easier for OPEC and its allies to manage the market, according to OPEC sources.

“This should be the case,” said one of the OPEC sources, who declined to be identified. “But I don’t think this factor will be permanent.”

While some U.S. energy firms have increased drilling, production is expected to remain under pressure as companies cut spending to reduce debt and boost shareholder returns. Shale producers also are wary that increased drilling would quickly be met by OPEC returning more oil to the market.

‘MORE DISCIPLINE’

“In this new era, (shale) requires a different mindset,” Doug Lawler, chief executive of shale pioneer Chesapeake Energy Corp, said in an interview this month. “It requires more discipline and responsibility with respect to generating cash for our stakeholders and shareholders.”

That sentiment would be a welcome development for the Organization of the Petroleum Exporting Countries, for which a 2014-2016 price slide and global glut caused partly by rising shale output was an uncomfortable experience. This led to the creation of OPEC+, which began cutting output in 2017.

OPEC+ is in the process of slowly unwinding record output curbs made last year as prices and demand collapsed due to the pandemic. Alliance members will meet on March 4 to review demand. For now, it is not seeing history repeat itself.

“U.S. shale is the key non-OPEC supply in the past 10 years or more,” said another OPEC delegate. “If such limitation of growth is now expected, I don’t foresee any concerns as producers elsewhere can meet any demand growth.”

Still, OPEC is no rush to open the taps. Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said on Feb. 17 oil producers must remain “extremely cautious.”

$60 OIL HELPS

Shale output usually responds rapidly to price signals and U.S. crude has this month hit its highest level since January 2020, topping $60 a barrel.

While shale companies have added more rigs in recent weeks, a tepid demand recovery and investor pressure to reduce debt has kept them from rushing to complete new wells.

“At this price point, any oil production is profitable, especially the relatively high-cost U.S. shale patch,” said Stephen Brennock of broker PVM Oil Associates.

“Yet despite these positive growth signals, U.S. tight oil production is far from recovering its pre-COVID mojo.”

The chief executive of shale producer Pioneer Natural Resources Co, Scott Sheffield, recently said he expects small companies to increase output but in the aggregate U.S. output will remain flat to 1% higher even at $60 per barrel.

PRODUCTION FREEZE

Last week’s severe cold will wreak havoc on oil and gas production as companies deal with frozen equipment and a lack of power to run operations. The largest U.S. independent producer, ConocoPhillips, on Thursday said the majority of its Texas production remained offline.

But J.P. Morgan analysts said in a Feb. 18 report rising oil prices might prompt a quicker shale revival.

“As long as operators have sufficient drilled but unfracked well inventory to complete, they should be able to easily grow production while keeping capex in check,” the bank said, using a term for drilling spending.

Forecasts for 2022 such as from the U.S. Energy Information Administration are for more U.S. supply growth [EIA/M], although perhaps not enough to cause problems for OPEC+ for now.

“U.S. oil output will not go back to pre-COVID levels any time soon,” said PVM’s Brennock. “But that is not to say that U.S. shale will not one day return as a thorn in OPEC’s side.”

(By Alex Lawler in London and Jennifer Hiller in Houston; Editing by Gary McWilliams and Matthew Lewis)

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Boeing recommends airlines suspend use of some 777s after United incident

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Boeing recommends airlines suspend use of some 777s after United incident 2

By Jamie Freed and David Shepardson

(Reuters) – Boeing Co said it recommended suspending the use of 777 jets with the same type of engine that shed debris over Denver at the weekend after U.S. regulators announced extra inspections and Japan suspended their use while considering further action.

The moves involving Pratt & Whitney 4000 engines came after a United Airlines 777 landed safely at Denver International Airport on Saturday local time after its right engine failed.

United said the next day it would voluntarily and temporarily remove its 24 active planes, hours before Boeing’s announcement.

Boeing said 69 of the planes were in service and 59 were in storage, at a time when airlines have grounded planes due to a plunge in demand associated with the COVID-19 pandemic.

The manufacturer recommended airlines suspend operations until U.S. regulators identified the appropriate inspection protocol.

The 777-200s and 777-300s affected are older and less fuel efficient than newer models and most operators are phasing them out of their fleets.

Images posted by police in Broomfield, Colorado showed significant plane debris on the ground, including an engine cowling scattered outside a home and what appeared to be other parts in a field.

The National Transportation Safety Board (NTSB) said its initial examination of the plane indicated most of the damage was confined to the right engine, with only minor damage to the airplane.

It said the inlet and casing separated from the engine and two fan blades were fractured, while the remainder of the fan blades exhibited damage.

Japan’s transport ministry ordered Japan Airlines Co Ltd (JAL) and ANA Holdings Inc to suspend the use of 777s with P&W4000 engines while it considered whether to take additional measures.

The ministry said that on Dec. 4, 2020, a JAL flight from Naha Airport to Tokyo International Airport returned to the airport due to a malfunction in the left engine about 100 kilometres north of Naha Airport.

That plane was the same age as the 26-year-old United Airlines plane involved in the latest incident.

United is the only U.S. operator of the planes, according to the Federal Aviation Administration (FAA). The other airlines using them are in Japan and South Korea, the U.S. agency said.

“We reviewed all available safety data,” the FAA said in a statement. “Based on the initial information, we concluded that the inspection interval should be stepped up for the hollow fan blades that are unique to this model of engine, used solely on Boeing 777 airplanes.”

Japan said ANA operated 19 of the type and JAL operated 13 of them, though the airlines said their use had been reduced during the pandemic. JAL said its fleet was due for retirement by March 2022.

Pratt & Whitney, owned by Raytheon Technologies Corp, was not available immediately for comment.

A spokeswoman for South Korea’s transport ministry, speaking before Boeing recommended suspending operations, said it was monitoring the situation but had not yet taken any action.

Korean Air Lines Co Ltd said it had 16 of the planes, 10 of them stored, and it would consult with the manufacturer and regulators and stop flying them to Japan for now.

In February 2018, a 777 of the same age operated by United and bound for Honolulu suffered an engine failure when a cowling fell off about 30 minutes before the plane landed safely. The NTSB determined that incident was the result of a full-length fan blade fracture.

Because of that 2018 incident, Pratt & Whitney reviewed inspection records for all previously inspected PW4000 fan blades, the NTSB said. The FAA in March 2019 issued a directive requiring initial and recurring inspections of the fan blades on the PW4000 engines. (This story corrects number of Korean Air 777s in service and stored in paragraph 18)

(Reporting by Jamie Freed in Sydney and David Shepardson in Washington; additional reporting by Eimi Yamamitsu and Maki Shiraki in Tokyo, Joyce Lee in Seoul and Tim Hepher in Paris; Editing by Sam Holmes and Christopher Cushing)

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Oil gains as U.S. production slowly returns after freeze

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Oil gains as U.S. production slowly returns after freeze 3

TOKYO (Reuters) – Oil prices rose on Monday as the slow return of U.S. crude output that was cut by frigid conditions raised concerns about supply just as demand is coming back from the depths of the coronavirus pandemic.

Brent crude was up 76 cents, or 1.2%, at $61.67 a barrel by 0104 GMT, after gaining nearly 1% last week. U.S. oil rose 74 cents, or 1.3%, to $59.98 a barrel, having fallen 0.4% last week.

Abnormally cold weather in Texas and the Plains states forced the shut down of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Oilfield crews will likely take several days to de-ice valves, restart systems and begin oil and gas output. U.S. Gulf Coast refiners are assessing damage to facilities and may take up to three weeks to restore most of their operations, analysts said, with low water pressure, gas and power losses hampering restarts.

“With three quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

“Longer term, the fall in capital expenditure at U.S. shale oil companies this year will keep drilling activity subdued, leading to output remaining below pre-pandemic levels,” ANZ said.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy producing centres. [RIG/U]

(Reporting by Aaron Sheldrick; Editing by Shri Navaratnam)

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