Applied Underwriters business insurance

Overview

Applied Underwriters is an Omaha, Nebraska, insurance group built on workers' compensation and best known, for better and worse, for its EquityComp program. Its NAIC group, AU Holding Company, was ranked No. 65 among U.S. business insurers by 2025 commercial lines direct premiums written, with $1.25 billion, based on NAIC market share data. It does not rank in the national top 10 in any line. The mix has moved well away from comp: other liability ($611.6 million) and commercial auto ($282.3 million) are now its largest lines, with workers' compensation at $104.9 million and aircraft at $70.6 million.

The insurance companies are known to AM Best as North American Casualty Group. The NAIC group lists California Insurance Company, Continental Indemnity Company, Illinois Insurance Company, Pennsylvania Insurance Company, Texas Insurance Company, Florida Casualty Insurance Company and Constitution Insurance Company. Applied Underwriters Captive Risk Assurance Company (AUCRA), an affiliate, was the counterparty on the side agreements behind EquityComp. Steve Menzies, who founded the company in 1994, is chairman; Jamie Sahara, also a founder, is president.

Applied sells through agents and brokers who are appointed with it, and through wholesalers for some excess and surplus lines business. United Risk, a managing general agent platform formed in 2023 and chaired by Sahara, is described by Applied as independently owned by its practice partners but affiliated with Applied operationally and by brand.

History

Menzies started Applied Underwriters in 1994 as a workers' comp specialist serving small and mid-sized employers. Berkshire Hathaway took an interest in 2005 and came to own 81% of the company. Applied says its insurers became the first monoline workers' comp writer to earn an A+ (Superior) from AM Best, in 2011.

On October 16, 2019, Insurance Journal reported that Menzies, with the Quasha Group led by Quadrant Management, had agreed to buy out Berkshire and the other shareholders in a deal valued at $920 million. Menzies cited growing channel conflict with Berkshire's other insurers. The sale ran straight into California regulators (see below).

EquityComp, sold for years alongside SolutionOne, paired a guaranteed-cost comp policy issued on filed rates with a separate Reinsurance Participation Agreement (RPA) between the employer and AUCRA. Under the RPA, the employer's actual cost moved with its loss experience under a formula, profit distributions came years later, and disputes went to arbitration in the British Virgin Islands. Regulators and courts said that structure needed to be filed and approved:

• June 20, 2016: In Shasta Linen Supply, California's Insurance Commissioner ruled that EquityComp and the RPA misapplied California Insurance Company's filed rates and were an unfiled collateral agreement, void as a matter of law, and designated the decision precedential. The employer owed only the guaranteed-cost premium. Applied disputed the ruling.
• May 3, 2018: In Nielsen Contracting v. Applied Underwriters, a California Court of Appeal refused to enforce the RPA's arbitration and delegation clauses because they had not been filed with the Commissioner.
• July 18, 2019: New York's Department of Financial Services fined Applied $3 million, finding that SolutionOne and EquityComp bundles sold there from as early as January 2010 to late 2016 relied on unfiled RPAs, were misleading about cost and often charged more than the filed policy. Applied agreed to stop the bundles and not enforce arbitration with New York employers, without admitting the findings.
• November 4, 2019: At the California Department of Insurance's request, a San Mateo County court placed California Insurance Company in conservation after the company moved to merge into a New Mexico insurer without the department's prior approval. Applied says New Mexico had approved the redomestication on October 9, 2019, and that the action was a pretext.
• 2021 to 2023: Federal suits by Applied and its New Mexico affiliate failed; the U.S. Supreme Court declined to hear the case in January 2023.
• April 2024: The San Mateo court approved the department's rehabilitation plan: an auction of the company's in-force California policies, reinsurance of expired-policy liabilities, settlement options for employers with RPA claims, and eventual surrender of the company's California certificate of authority.
• 2025: The First District Court of Appeal upheld the conservation and the plan, holding that conservation is not limited to solvency problems, and the California Supreme Court later denied review.

Applied says it has moved all its business to the other carriers in the group.

Business insurance products

Workers' compensation. Applied now leads with guaranteed-cost coverage. SolutionOne combines comp, payroll processing, pay-as-you-go premium and risk services for small and mid-sized employers; JumboGC is a guaranteed-cost program for mid-sized and large employers. EPLI and employers liability are available alongside. Submissions need an ACORD 130, the current experience mod worksheet and five years of loss and payroll history.

Transportation. Auto liability and physical damage for public auto (non-emergency medical transport, limousines, taxis, shuttles, buses), for-hire box trucks, and trucking fleets of five or more power units, plus buffer excess auto for contractors and distributors through appointed wholesalers. This business is written on an E&S basis.

Specialty lines. Aviation and space (limits up to $250 million liability and $50 million hull for U.S. aviation risks), construction project liability, contractors pollution and environmental, directors and officers and professional liability, political violence and war risk, infrastructure liability, entertainment and sports, fine art, surety, real estate property through wholesalers, warranty and contractual liability programs, and reinsurance for insurers, risk retention groups and program administrators.

Who it insures

Comp remains aimed at small and mid-sized employers, with the ability to add states as a business grows. The specialty units go after classes that standard carriers often avoid: livery and medical transport fleets, box truck operators, mid-sized Trucking company insurance, aviation and space, large construction projects for General contractor insurance, and pollution exposures. Much of the newer premium comes through program managers rather than retail agents, which is why "other liability" now dominates its NAIC totals. Expect specialist underwriting and E&S paper on many of these risks rather than standard admitted forms.

How to buy

There is no direct sales channel. Your agent or broker needs an Applied appointment; Applied's sales line, 877-234-4450, will help an employer find one. Comp quotes go through Applied's workers' comp team, transportation accounts through product-specific underwriters and appointed wholesalers, and aerospace through named aviation and space underwriters. Agents and customers log in at appliedunderwriters.com.

Before signing any comp proposal from any carrier, ask whether the premium is set only by the filed policy or whether a side agreement, profit-sharing plan or captive cell will change what you pay. Compare it to a standard retrospective rating plan, and if a dispute arises, your state insurance department is a forum; see how to complain to your state insurance department.

Claims

Report a claim or ask about an open one at 877-234-4420, option 1, or email [email protected]. Loss runs are available from [email protected]. Applied says its comp adjusters carry about half the industry-average caseload. Medical management runs through Promesa Health, Applied's in-house, URAC-accredited utilization review group, with an in-house pharmacy that ships prescriptions overnight to injured workers, a prescription card and a 10-week REVIVE recovery program. Comp policyholders get accident prevention services, including OSHA 300 log help, at 877-234-4420, option 4, then option 2.

Financial strength and ratings

AM Best affirmed the A- (Excellent) Financial Strength Rating of California Insurance Company and its affiliates (North American Casualty Group, including Continental Indemnity, Illinois, Pennsylvania, Texas, Florida Casualty and Oklahoma Property and Casualty) on August 12, 2026, with a stable outlook. AM Best called the balance sheet very strong but lowered its operating performance view to adequate from strong as the group expands into new lines, said comp premium has shrunk with rate declines, upgraded its risk management assessment, and described the conservatorship dispute as ongoing but financially immaterial for now.

The trend is downward from Applied's A+ era: AM Best affirmed the group at A in June 2020, cut it to A- in January 2023 and carried a negative outlook until August 2025. Applied does not publish S&P, Moody's or Fitch ratings.

Strengths and weaknesses

Applied is a well-capitalized, founder-controlled group with real specialist underwriting in comp, public auto and aviation. Its comp programs also produced one of the longest-running regulatory and court fights in the U.S. comp market, and the group is now a much broader and newer specialty book.

• Strengths: Balance sheet AM Best rates very strong. Comp available countrywide with in-house medical management, pharmacy and lower adjuster caseloads. Specialist capacity for hard-to-place transportation, aviation and space risks.
• Weaknesses: Regulators in California and New York found its EquityComp and SolutionOne side agreements unfiled and misleading, and California Insurance Company has been in conservation since November 2019. AM Best cut the group to A- in 2023. Comp premium has fallen to $104.9 million, and AM Best says profitable diversification is still being proven. Much of the specialty business is E&S or program business rather than admitted coverage.

How to contact Applied Underwriters