BrickStreet Mutual Insurance Co. spent $1.4 million on advertising last year according to the company's financial report, filed Thursday with the state Insurance Commission.

Some have questioned why BrickStreet spends money on advertising when it has a monopoly on the workers' compensation insurance business in West Virginia until July 1.

Also, some eyebrows were raised when a BrickStreet advertisement appeared in a recent issue of Sports Illustrated.

Greg Burton, BrickStreet's president and chief executive officer, said the company is trying to build a brand as it prepares for competition. West Virginia's workers' comp insurance market opens to competition on July 1.

Burton noted that many large insurance companies who are potential competitors, including Liberty, AIG, Chubb, State Farm and Nationwide, advertise nationwide every day.

Also, he said BrickStreet uses its advertising as an educational tool. "To this day there are people out there who don't realize the system has been privatized and don't know what BrickStreet is or what we do," he said.

BrickStreet spokesman Andy Wessels said the Sports Illustrated advertisement appeared in a regional issue of the magazine. He said the company also made regional ad placements in Time, Newsweek and U.S. News & World Report.

The company relies on the Charleston-based advertising and public-relations firm Charles Ryan Associates for most of its advertising placements.

BrickStreet spent just over $1 million on advertising in its first year, ramped that up to $1.4 million in 2007, and will likely spend a couple hundred thousand dollars more this year, Burton said.

Some have questioned why BrickStreet spends money on advertising when it has a monopoly on the workers' compensation insurance business in West Virginia until July 1.

Also, some eyebrows were raised when a BrickStreet advertisement appeared in a recent issue of Sports Illustrated.

Greg Burton, BrickStreet's president and chief executive officer, said the company is trying to build a brand as it prepares for competition. West Virginia's workers' comp insurance market opens to competition on July 1.

Burton noted that many large insurance companies who are potential competitors, including Liberty, AIG, Chubb, State Farm and Nationwide, advertise nationwide every day.

Also, he said BrickStreet uses its advertising as an educational tool. "To this day there are people out there who don't realize the system has been privatized and don't know what BrickStreet is or what we do," he said.

BrickStreet spokesman Andy Wessels said the Sports Illustrated advertisement appeared in a regional issue of the magazine. He said the company also made regional ad placements in Time, Newsweek and U.S. News & World Report.

The company relies on the Charleston-based advertising and public-relations firm Charles Ryan Associates for most of its advertising placements.

BrickStreet spent just over $1 million on advertising in its first year, ramped that up to $1.4 million in 2007, and will likely spend a couple hundred thousand dollars more this year, Burton said.

"Competition will also help dictate the amount we spend," he said. If a competitor decides to go after a market segment and advertises heavily, "we'll have to decide if we want to compete for that segment."

BrickStreet writes about $500 million in premiums a year. The company has to offer insurance to all employers until January 2009, when it can start picking and choosing which companies it wants to insure.

The coal industry represents about $100 million in annual premiums. Retaining that business is "very critical" to BrickStreet's long-term success, Burton said in January.

Government accounts for about $50 million in premiums and also is critical, Burton has said. That sector doesn't open to competition until 2012.

A conference for companies interested in entering West Virginia's workers' compensation insurance market will be held April 8 in Charleston. A similar conference hosted by state Insurance Commissioner Jane Cline in September attracted about 200 insurance executives.

So far, 23 companies have obtained a certificate of authorization or made other workers' compensation filings with Cline's office.

Burton said BrickStreet uses Ward Group to compare its advertising, payroll and other expenses with workers' compensation insurance companies around the country. Ward Group is a Cincinnati-based consulting firm that claims to be the leading provider of insurance industry benchmarking and best-practices services.

"Our advertising expenditure as a percentage of budget is below the average," Burton said.

To contact George Hohmann, e-mail busin...@dailymail.com or call 348-4836.