[ INSIDE HAWAII INC. ]
RICHARD WALKER / RWALKER@STARBULLETIN.COM
Chuck Murray is the new chief financial officer of local insurer UHA, formerly known as University Health Alliance. He joined UHA in 2001 as an underwriter.
New CFO pursues 'slow, intelligent growth'
The former University Health Alliance is growing again after a painful retrenchment
Question: How did you turn things around?
Answer: We had been also in the self-funded business, and we got out of that business and we started solely on selling group insurance by focusing on only one product line. We were able to become profitable and at the same time, even though it was a painful time -- we had to make a lot of administrative cuts and we had to learn how to run lean and mean.
» New Job: Murray has been promoted to chief financial officer of UHA, formerly known as University Health Alliance, one of Hawaii's smaller health insurers. He will oversee risk management services, financial services and employer services departments.
>> Background: He joined UHA in January 2001 as an underwriter and rose through the company. He previously worked for Benefit Plan Consultants (Hawaii) Inc.
>> History: In 2001, UHA was placed under state supervision for falling below minimum reserves. At the time it had around 32,000 members. In 2004, the state set it loose, saying UHA was financially healthy. It had declined to around 27,000 members. Now it has 37,000 members and is growing.
How much staff did you cut?
A: We probably laid off 15 percent of our staff.
Q: Have you rehired since then?
A: Yes, we've actually gotten back to the same capacity that we were prior to going into rehab, staffwise. I think we have about 80 employees now.
Q: Are you growing?
A: Our goal at that time was to reach 50,000 members by 2009. We want to have slow, intelligent growth. We want to have a pace where we can maintain customer service. When you call UHA, you get to talk to somebody. Really, our goal is add about 5,000 members a year. We exceeded our goal last year by over 1,000. We're on track this year to reach our goal as well.
Q: How are you doing it?
A: We're getting a lot of referrals from our current clients as well. We do use brokers, so brokers bring us business, and we have sales staff that go out and try to find direct business as well.
When we were in rehabilitation we weren't doing much advertising, and since we've exited from rehab we've been able to do a bit more advertising and marketing, and we're going through a branding campaign where we changed our logo recently. (The company shortened its name to UHA from University Health Alliance.)
Part of the problem is we used to get confused with the University of Hawaii, so when we would try to sell, people would say, "I thought you used to sell only to the University of Hawaii."
Q: What's your response to the Legislature's sudden move to end state oversight of health insurance rates?
A: We were actually very disappointed to see that rate regulation had ended. We very much favored having the insurance division review our rating methodologies. We think it's very important for the public to know that a third party has looked at these methods and the rates we've developed are based on sound actuarial principles, and (that) these rates are not discriminatory.
UHA did support that and was in support of that for the consumers in Hawaii.
Q: Will the end of oversight hurt UHA?
A: No. I think the competitive forces will prevail. We were successful prior to rate regulation in generating business. I think the impact is more towards, unfortunately, for the consumer to know there's not a third party reviewing these, and now that insurers can set rates arbitrarily how they like.
Q: Is the market competitive?
A: I believe the market's very competitive right now. Health care is rising considerably. Employers are looking for relief. A lot of business is going to be rate driven. Really, it's going to come down to price and customer service.
Q: What is UHA's outlook for the next year? Revenue growth?
A: We're projecting to be just under $100 million this year. That's going to be up from $82 million the prior year. We're projecting a profit ratio of 3.4 percent, or $3.4 million.
Q: What's the general outlook for health costs in the state in next few years, compared to the generally large increases we have seen?
A: There seems to be a leveling off, actually, in the market. We're seeing that the market is probably tightening a little right now and I would say in the 4-8 percent range. The last 3 years, that's another thing we've tried to do, we've raised our rates consistently between the 6.7 and 7.3 percent range and I think consumers don't like to see their rates go up 14 percent one year and 4 percent the next year. We've been real cognizant about keeping our increases predictable in the long run.
Q: Do you think you can sustain that range?
A: Yes, I do. And part of the reason for that is as we grow, we're able to reduce our administrative expenses and absorb more of our fixed costs.
Q: What brought you to Hawaii?
A: My wife wanted to attend college here. We weren't married at the time and we came here and visited. We were dating at the time and after visiting with her, I said, "Can I please go with you?" And subsequently, we got married here, three years after being here.
Q: Final word?
A: We really try to hire from within and promote from within whenever possible. If we have candidates who are qualified in the organization, then we try to take them first before looking outside the organization.
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