Henrico County-based Elephant Insurance Services has returned $49,632 in incentive payments to the state government after the company over-reported how many people it has hired in the Richmond area.
The company said a “clerical error” caused it to report jobs that it created outside of Virginia. As a result, the company was given incentive payments for 62 non-Virginia jobs as part of a three-year incentives package awarded by the state in 2015, when Elephant Insurance announced it planned to hire about 1,173 new employees in the Richmond region over three years. The news was first reported by Richmond BizSense.
Under the incentives program, the company received about $800 for each new job it created from the Virginia Jobs Investment Program, or VJIP, which is designed to help companies cover the costs of recruiting and training employees. As of March 27, when the three-year window for Elephant to receive the incentives closed, the company had received $244,962 in VJIP funding.
Since the 2015 announcement, Elephant Insurance has added 244 jobs in Virginia, not including the 62 that were over-reported, according to the Virginia Economic Development Partnership, which oversees state incentive programs designed to attract business expansions.
The VEDP said Elephant Insurance returned the overpayment on July 31, and the money went back into the VJIP fund.
“As soon as we noticed the error of including non-Virginia headcount, we contacted the VEDP to make an immediate repayment of the funds,” said Logan Buyalos, a spokeswoman for Elephant Insurance.
The overpayment to Elephant Insurance occurred before the VEDP started implementing new practices aimed at strengthening how it verifies hiring by companies that receive VJIP incentives, said Suzanne Clark, communications director for the VEDP. The new verification practices will be fully implemented by October, Clark said.
Elephant Insurance was founded in 2009 in Henrico as the first U.S. subsidiary of the United Kingdom-based insurance company Admiral Group Plc. The company sells automobile insurance directly to customers online and by phone.
As of March of this year, Elephant reported to the VEDP that its full-time headcount in Virginia was 587. Had the company created all of the 1,173 jobs it projected in 2015, it would have received nearly $1 million in incentives from the state. Payments from the VJIP are given to a company 90 days after a full-time employee is hired.
“As with many predictions, the forecast at the time was an estimate of where we thought we would be,” Buyalos said of the company’s 2015 jobs announcement.
“It evolved over the last three years based on many factors that we felt necessary to make Elephant better positioned for the future,” she said. “While we did not create 1,173 new jobs, we did increase our overall full-time workforce by nearly 90 percent and grow our Virginia staff by more than 70 percent in just three years.”
Elephant started operations in a 32,000-square-foot office on Eastshore Drive in the Innsbrook Corporate Center. In January 2015, as the company added jobs, it moved to a 54,000-square-foot site in the Deep Run I office building at 9950 Mayland Drive in western Henrico. Early in 2017, the company also opened an office in Texas, one of the largest U.S. car insurance markets.
Admiral Group, the U.K.-based parent company, said in an Aug. 15 report to shareholders that its U.S. business continues to see growth in customers and reached 200,000 vehicles insured in the first half of 2018, but the U.S. business has not turned a profit. The company has been focusing on building its customer base in the U.S. rather than profitability.