Agenda

– Collective Liability – The Rate Setting Process – The Experience Rating Program – Reducing Premium Rates – Q&A

Collective Liability

Historical Compromise

Employers agreed to accept collective

liability

Workers gave up their right to sue

Why do you pay WCB premiums?

Your premium assessments fund the compensation system

Industry Classification

• 10 industry classes, 33 industry groups, 50 rate codes • Classification system is based on industrial undertaking • Rates are set at the rate code level according to injury and cost experience

Rate Code

Industry Group

Class T

Transportation

T4

T42 Transportation,

Courier, Commercial Bus

T5

T51 Operation of

Railways

T6

T61 Commercial Air Transportation

The Rate Setting Process

Key Premium Rate Drivers

Premium Rates

Injury Rates Durations

Claims Costs

Payroll

2010 2011 2012 2013 2014Total Injury Rate 8.70% 8.73% 8.65% 7.80% 6.99%TL Injury Rate 3.12% 3.05% 2.79% 2.54% 2.41%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%Claims per 100 Workers

2015 Total Injury Rate Target: 6.80%

2015 TL Injury Rate Target: 2.20%

Injury Rates

Claims Duration

2015 Target: 34 days

2010 2011 2012 2013 2014Duration 34.67 34.44 38.89 34.88 37.01

32.0

33.0

34.0

35.0

36.0

37.0

38.0

39.0

40.0Average # of compensation days, 12-month window

2010 2011 2012 2013 2014Time Loss 11,574 11,516 10,774 10,116 9,715Total 20,672 21,378 22,607 20,996 18,441

0

5,000

10,000

15,000

20,000

25,000

Claims Accepted

2010 2011 2012 2013 2014Health Care 66,568 72,973 70,534 73,049 71,727Compensation 63,080 64,752 65,347 61,808 59,095Earnings Replacement 47,188 43,670 43,944 43,164 42,789Survivor Benefits 10,803 10,268 10,365 10,246 10,622Vocational Rehab 4,290 4,127 3,371 4,026 3,697

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

($000)

Annual Claims Costs

2010 2011 2012 2013 2014* 2015*All Class $15.63 $16.98 $18.13 $18.85 $20.07 $21.21

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00($ billions)

Payroll: All Industry Classes

* Projected

Industry premium rates are set based on the collective claims experience of all employers within a rate code

Rate setting process ensures today’s employers pay for the cost of today’s claims

2015 premiums pay for the lifetime costs of all claims that occur in 2015

The Experience Rating Program adjusts industry premium rates based on individual employer’s claims experience

Setting Premium Rates

Uses historical costs and spending patterns: ‾ 5 years for wage loss ‾ 3 years for health care and vocational rehabilitation costs

Projects the number of claims expected next year

Calculates future costs for expected claims (50 years)

Industry premium rate = revenue required / payroll

The Rate Model

$1.63 $1.61 $1.60

$1.58

$1.51

$1.46

$1.35

$1.40

$1.45

$1.50

$1.55

$1.60

$1.65

2010 2011 2012 2013 2014 2015

Effective Rate per $100 Assessable Payroll

Premium Rate History

The Experience Rating Program

Provides financial incentive to positively influence injury prevention and workplace safety

Adjusts industry premium rates to reflect individual employers claims history

Employers who cost the system more, pay more

Program is evaluated by an external review committee every 3-4 years. Review completed in 2014 and recommendation under review.

Experience Rating Program

• Uses a 3-year window for premiums, costs and claim counts

• 3 most recent complete years at the time of the experience rating run

Experience Rating Program

2011 2012 2013 2014 2015

2013 Include 2012 Include Include 2011 Include Include Include 2010 Include Include Include 2009 Include Include Include 2008 Include Include 2007 Include

• For employers with base premiums less than $15,000 • Maximum Discount = 25% • Maximum Surcharge = 75% • Frequency Based

Standard Program

# of Time Loss Claims Discount Surcharge

0 -25%

1 or 2 No Discount or Surcharge

3 +25%

4 +50%

5 or more +75%

• For employers with base premiums of at least $15,000 • Maximum Discount = 30% • Maximum Surcharge = 200% • Cost Based – comparison to industry weighted loss ratio

(WLR)

Advanced Program

Firm WLR

Industry WLR Discount

Firm WLR

Industry WLR Surcharge

An employer will not be eligible for a discount if: 1. A fatality occurs and is accepted in either the current or

previous year

2. The firm’s Employer Payroll Statement was not submitted by February 28 of the current year

3. There has been a conviction under Section 217.1 of the

Criminal Code of Canada within the current or previous year. This law defines criminal charges for employers who fail to provide safe workplaces

Special Provisions

Experience Rating Distribution

56%

3%

41%

Discount Surcharge Industry Rate

Premiums = Payroll ÷ 100 x Net Premium Rate

Calculating Your Premiums

Rate Code: B11 – Construction Trades Industry Premium Rate: $1.63 Payroll: $5,000,000 Experience Rating: 30% discount (-$0.49) Net Premium Rate: $1.14 Premiums = $5,000,000 ÷ 100 x $1.14 = $57,000

Rate Code: D32 – Operation of Oilwells Industry Premium Rate: $0.81 Payroll: $5,000,000 Experience Rating: 75% surcharge (+$0.61) Net Premium Rate: $1.42 Premiums = $5,000,000 ÷ 100 x $1.42 = $71,000

Reducing Premium Rates

An employer in the Standard Program, with $2.00 industry premium rate:

Reducing Premium Rates

Payroll = $200,000 4 Time Loss Claims

3 Time Loss Claims

2 Time Loss Claims

0 Time Loss Claims

Experience Rating 50% surcharge 25% surchargeNo discount, no surcharge 25% discount

Firm Premium Rate $3.00 $2.50 $2.00 $1.50 Base Premiums $4,000 $4,000 $4,000 $4,000 Discount/surcharge $2,000 $1,000 n/a ($1,000)Net Premiums $6,000 $5,000 $4,000 $3,000

An employer in the Advanced Program, with $1.00 industry premium rate and $4M payroll per year.

Reducing Premium Rates

Payroll = $4 Million Example 1 Example 2 Example 3 Costs per year $40,000 $10,000 $4,000 Firm WLR 100 25 10 Industry WLR 50 50 50 Experience Rating 67% surcharge 15% discount 24% discount Firm Premium Rate 1.67 0.85 0.76 Base Premiums $40,000 $40,000 $40,000 Discount/Surcharge $26,800 -$6,000 -$9,600 Net Premiums $66,800 $34,000 $30,400

Awareness Campaigns

Education & Training

Targeting Strategies Partnerships

Prevention & Safety

Q&A