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Analytics:

Understanding & Benchmarking

Workers' Comp Loss Data to Guide the Safety ProcessJay R. Gnadt, MS, CSP, CRM

Senior Vice President

Data Analytics & Risk Control

Lockton Companies of Texas, LLC

Dallas, Texas

April 26, 2018

Lockton Companies |

About Lockton

Lockton Companies |

What does a Safety Professional do?

Source: American Society of Safety Engineers, 2005. “Management

and the Responsibilities of the Safety Professional,”

http://www.asse.org/professionalaffairs/action/management-and-the-

responsibilities-of-the-safety-professional/, accessed 4/7/17.

http://www.asse.org/professionalaffairs/action/management-and-the-responsibilities-of-the-safety-professional/

Lockton Companies |

Data driven

Speak business

Understand workers’ compensation loss data

Safety Professionals in the 21st Century

Lockton Companies |

How to apply a data-driven safety management approach to optimize

workers’ compensation program results.

Discuss several metrics that should be tracked to measure and target

workers’ compensation pre-loss (safety) and post-loss (case

management) actions.

Review benchmarking techniques to compare processes and outcomes

with other organizations, industries, and geographic areas.

Objectives

Lockton Companies |

Demonstrate to executives that resources should be allocated to

improve safety & health

Quantify financial impact of pre- and post-loss efforts

Measure results

Why Use a Data-Driven Approach?

Source: Weigand, D., & Bennett, S. (2015). There's Gold in Workers Compensation Data.

Safety 2015 Conference Proceedings.

Lockton Companies |

Insurance Carrier

Internal Risk Management Information System

Third Party Administrator

Broker/Agent

Others?

What Data is Out There?

Why Don’t These Numbers Match?

Workers’ Comp Data Analytics

Lockton Companies |

Loss Development

Valuation Date: The cut-off date for adjustments made to paid claims

and reserve estimates in a loss report. For example, a workers

compensation loss report for the 2013 policy year that has a 2015

valuation date includes all claim payments and changes in loss reserves

made prior to the 2015 valuation date.

Source: International Risk Management Institute, https://www.irmi.com/online/insurance-

glossary/terms/v/valuation-date.aspx, accessed April 13, 2017.

2012:

$1,000

2013:

$1,500

2014:

$1,875

2015:

$2,063

“Closed”

Loss Development Factor :

“A general upward trend in . . . workers’

compensation after the initial reporting period

called ‘loss development.’ A loss development

factor is applied to losses before they are fully

matured to account for loss development and

incurred but not reported (IBNR) claims.

https://www.irmi.com/online/insurance-glossary/terms/v/valuation-date.aspx

Lockton Companies |

Loss Development Factor Example

Policy Year Incurred

Loss

Development

Factor

Developed

Incurred

Number of

Claims

2013 $486,515 1.120 $544,896 43

2014 $336,249 1.164 $391,394 24

2015 $2,921,234 1.253 $3,660,306 39

2016 $664,298 1.589 $1,055,569 42

Annual Average $1,102,074 $1,413,042 37

Losses from older years tend

to have more “closed” claims,

and are more “mature.” Thus,

the LDF is lower than newer

years.

Losses in more recent years have

more “unknowns” about the claims,

thus have a higher LDF than older

years.

Lockton Companies |

Current Valuation, policy effective dates 2/1 to

1/31, Valued 3/31/17

Valued as of 3/31/17

“Green-to-Green” Valuation, policy effective dates 2/1 to 1/31, Valued as of

2/1 at end of year policy year

Policy TermClaim Count

Total Incurred Costs

2014 17 $29,696

2015 11 $32,122

2016 17 $98,712

Grand Total 45 $160,529

Policy TermClaim Count

Total Incurred Costs

2014 17 $136,452

2015 11 $37,228

2016 17 $77,268

Grand Total 45 $250,948

Why Is Valuation Important?

Single Point In Time G2G

Lockton Companies |

2014 2015 2016

Total Incurred

Costs$136,452 $37,228 $77,268

Claim Count 17 11 17

0

2

4

6

8

10

12

14

16

18

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

Current Valuation, policy effective

dates 2/1 to 1/31

Valued as of 3/31/17

2014 2015 2016

Total Incurred

Costs$29,696 $32,122 $98,712

Claim Count 17 11 17

0

2

4

6

8

10

12

14

16

18

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

“G2G” Valuation, policy effective

dates 2/1 to 1/31

Valued as of 2/1 at end of year policy

year

Which Story Is Right?

Lockton Companies |

Which Should Set Safety Strategy?

2014 2015 2016Grand

Total

Valued 3/31/17 $136,452 $37,228 $77,268 $250,948

Valued "Green-to-

Green", 2/1 each year$29,696 $32,122 $98,712 $160,530

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Older, more developed losses

may make severe injuries (i.e.

knees, shoulders, backs) a

higher priority for control.

Fresh, “green” losses may over-

emphasize the frequency of

minor incidents that don’t

drive longer term WC costs.

Lockton Companies |

Top 5 Accident Types

Slip/Trip/

Fall

Struck

By/Again

st

Manual

Material

Handling

Contact

with

Object

Powered

Industrial

Truck

Unknown

Total Incurred Cost $92,517 $37,631 $25,682 $2,607 $428 $13

Claim Count 17 2 13 6 3 2

0

2

4

6

8

10

12

14

16

18

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Green-to-Green

Valued 2/1 Each Year

Manual

Material

Handlin

g

Slip/Tri

p/Fall

Struck

By/Agai

nst

Forklift

Contact

with

Object

Total Incurred Cost $129,955 $70,705 $34,895 $12,790 $2,290

Claim Count 15 17 2 3 4

0

2

4

6

8

10

12

14

16

18

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Current Valuation

Valued 3/31/17

Safety strategy may be different based on the valuation choice.

Benchmarking and Trending


Lockton Companies |

Incurred Loss Trends

0.74

1.24

0.80 0.750.87

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

Incurred Losses per $100 Payroll

Incurred losses per $100 of payroll have increased 17%

from 2015 to 2016 and 18% from 2012.

3.43 3.392.86 2.82

2.53

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

$2,146$3,665 $2,788 $2,652 $3,446

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

Actual Benchmark

Frequency per $1 Million Payroll Severity (Average Cost per Claim)

Section 4. Report Criteria

Policy YearTotal Claim

Count

Total Incurred

Amount

Avg. Incurred/

ClaimPayroll Notes

PY 2012 265 $568,780 $2,146 $77,157,693

PY 2013 304 $1,114,044 $3,665 $89,562,417

PY 2014 299 $833,759 $2,788 $104,590,876

PY 2015 292 $774,459 $2,652 $103,713,603

PY 2016 318 $1,095,811 $3,446 $125,678,963

TOTAL 1,478 $4,386,854 $2,968

Policy Year based on 01/01 inception date. The carrier/TPA source of this data is Gallagher Bassett.

Green-to-Green analysis valued at 12 months of development (12/31). NAICS 48 - Transportation and Warehousing benchmark data powered by Lockton's InfoLock P&C Database

G2's full NAICS code is 488119, "Other Airport Operations."

Lockton Companies |

Lockton’s Infolock® P&C Claims Database

Infolock P&C

Database

k By industry

k By geography

k By NCCI/occupation codes

k By type of injury (part/nature/cause)

k By date (accident/report/valuation/closure)

k By type of claim (medical-only/lost-time/litigated)

and many more . . .

Custom Research and

Custom Benchmarking

Automated Monthly Data Feeds

From Lockton Partners

60MTRANSACTIONS

16BINCURRED LOSSES

$

Industry research is powered by Lockton’s

proprietary Infolock P&C database. One of the

largest in the industry, this tool highlights our ability

to perform research and advanced analytics. In

addition to containing a vast inventory of claims

and incurred losses, Infolock goes beyond

traditional loss-run data by also offering payment

data, reserve history, work-status history, and

adjuster notes.

https://www.travelers.com/index.aspx

https://www.travelers.com/index.aspx

Lockton Companies |

Get a complete “data dump”

Decide what metrics are most

important (don’t overwhelm)

Pick “vital few vs. trivial many”

Be able to explain the metrics

and why each is indicative of WC

performance

BLS

Third Party Administrator/Carrier

data bases

Industry

Geographic

Broker/Agent

Other

Benchmarking Techniques

Possible Sources of Data Tips for Effective Benchmarking

Frequency Drivers


Lockton Companies |

Claim Stratification

WORKERS' COMPENSATION - FREQUENCY TREND BY CLAIM INCURRED AMOUNTS

Section 1. Incurred Amount Stratification: Year-over-Year Counts

Stratification Level PY 2012 PY 2013 PY 2014 PY 2015 PY 2016 Total Claims % Claims Total Incurred % IncurredAvg. Incurred/

Claim

$0 to $1,499 187 191 200 173 181 932 $429,358 $461

$1,500 to $9,999 65 94 82 105 115 461 $1,819,131 $3,946

$10,000 to $24,999 10 8 12 8 13 51 $839,227 $16,455

$25,000 to $49,999 3 7 5 6 8 29 $1,024,407 $35,324

$50,000+ 0 4 0 0 1 5 $274,730 $54,946

Section 2. Percent Change in Frequency Rate from PY 2012

Chart Note: Dark grey line represents G2 SECURE STAFF's own baseline (%Δ in overall frequency rate from PY 2012)

G2 is higher than the industry benchmarks on % incurred costs in all claim layers except claims costing $50,000 or more. The frequency rate of cases costing between $25,000 and $49,000 are increasing, even as G2's overall frequency rate is decreasing.

-60%

-10%

40%

90%

$0 to $1,499($429.4 K)

$1,500 to $9,999($1,819.1 K)

$10,000 to $24,999($839.2 K)

$25,000 to $49,999($1,024.4 K)

$50,000+($274.7 K)

%Δ

Fre

q. R

ate

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

63%

31%

3%

2%

0%

10%

41%

19%

23%

6%


Lockton Companies |

Frequency Drivers

WORKERS' COMPENSATION - FREQUENCY DRIVERS: CAUSE OF INJURY

Section 1. Top 5 Causes of Injury by Claim Count

Cause of Injury PY 2012 PY 2013 PY 2014 PY 2015 PY 2016 Total Claims % Claims Total Incurred % IncurredAvg. Incurred/

Claim

Strain 103 132 104 128 119 586 $1,924,254 $3,284

Struck By 41 63 71 60 80 315 $812,719 $2,580

Slip/Trip/Fall 40 65 60 58 66 289 $1,061,659 $3,674

Miscellaneous 63 24 21 13 14 135 $202,644 $1,501

Cut/Puncture 8 3 12 14 8 45 $32,637 $725

All Others 10 17 31 19 31 108 $352,941 $3,268



Section 3a. Top Types of Strain by % of Claims Section 3b. Types of Struck By by % of Claims

Strain, Struck By, & Slip/Trip/Fall are the top three causes of injury by claim count. They account for 81% of claims and 87% of incurred amounts.

-100%

-50%

0%

Strain($1,924.3 K)

Struck By($812.7 K)

Slip/Trip/Fall($1,061.7 K)

Miscellaneous($202.6 K)

Cut/Puncture($32.6 K)

%Δ

Freq

. Rat

e

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

40%

21%

20%

9%

3%

7%

44%

19%

24%

5%

1%

8%

30%

30%

19%

5%

4%

Struck By-Stationary Object

Struck By-Object Handling

Struck By-Falling/Flying Object

Struck By-Struck By Misc.

Struck By-Object Handled By…

37%

25%

13%

10%

10%

Strain-Lifting

Strain-Pushing/Pulling

Strain-Repetitive Motion

Strain-Twisting

Strain-Holding/Carrying


Lockton Companies |

Frequency Drivers

WORKERS' COMPENSATION - FREQUENCY DRIVERS: PART OF BODY

Section 1. Top 5 Part of Body by Claim Count

Part of Body PY 2012 PY 2013 PY 2014 PY 2015 PY 2016 Total Claims % Claims Total Incurred % IncurredAvg. Incurred/

Claim

Multiple 78 33 47 36 54 248 $836,724 $3,374

Back 51 58 44 44 48 245 $693,634 $2,831

Foot/Ankle 22 32 34 38 34 160 $429,112 $2,682

Knee 19 44 22 32 37 154 $612,833 $3,979

Wrist/Hand 16 21 26 28 27 118 $308,640 $2,616

All Others 79 116 126 114 118 553 $1,505,910 $2,723



Section 3. Top 5 Combinations of Part of Body and Nature of Injury by Claim Count

The top five combinations of part and nature account for 33.0% of claims.

Multiple, Back, & Foot/Ankle are the top three parts of body by claim count. They account for 44% of claims and 45% of incurred amounts.

-80%

-30%

20%

70%

Multiple($836.7 K)

Back($693.6 K)

Foot/Ankle($429.1 K)

Knee($612.8 K)

Wrist/Hand($308.6 K)

%Δ

Freq

. Rat

e

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

17%

17%

11%

10%

8%

37%

19%

16%

10%

14%

7%

34%

14%

5%

5%

4%

4%

Back-Strain/Tear

Multiple-Strain/Tear

Knee-Strain/Tear

Multiple-Multiple Physical

Shoulder-Strain/Tear


Lockton Companies |

Frequency DriversWORKERS' COMPENSATION - FREQUENCY DRIVERS: NATURE OF INJURY

Section 1. Top 5 Natures of Injury by Claim Count

Nature of Injury PY 2012 PY 2013 PY 2014 PY 2015 PY 2016 Total Claims % Claims Total Incurred % IncurredAvg. Incurred/

Claim

Strain/Tear 83 144 111 140 160 638 $2,190,317 $3,433

Contusion 22 65 57 55 58 257 $740,948 $2,883

Laceration 10 16 27 20 24 97 $115,132 $1,187

Sprain/Tear 13 26 24 18 14 95 $325,280 $3,424

Specific Other 70 8 6 3 4 91 $120,152 $1,320

All Others 67 45 74 56 58 300 $895,025 $2,983



Section 3. Top 5 Combinations of Part and Nature by Claim Count

Strain/Tear, Contusion, & Laceration are the top three natures of injury by claim count. They account for 67% of claims and 69% of incurred amounts.

The top five combinations of part and nature account for 33.0% of claims.

-100%

-50%

0%

50%

100%

150%

Strain/Tear($2,190.3 K)

Contusion($740.9 K)

Laceration($115.1 K)

Sprain/Tear($325.3 K)

Specific Other($120.2 K)

%Δ

Fre

q. R

ate

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

43%

17%

7%

6%

6%

20%

50%

17%

3%

7%

3%

20%

14%

5%

5%

4%

4%

Back-Strain/Tear

Multiple-Strain/Tear

Knee-Strain/Tear

Multiple-Multiple Physical

Shoulder-Strain/Tear


Lockton Companies |

Frequency Drivers

WORKERS' COMPENSATION - FREQUENCY DRIVERS: CLAIMANT OCCUPATION

Section 1. Top Claimant Occupations by Claim Count

Claimant Occupation PY 2012 PY 2013 PY 2014 PY 2015 PY 2016 Total Claims % Claims Total Incurred % IncurredAvg. Incurred/

Claim

Cabin Service 70 76 41 59 65 311 $772,109 $2,483

Customer Service 22 43 31 34 30 160 $523,751 $3,273

Ramp Service 13 22 19 35 44 133 $367,951 $2,767

All Other 5 2 16 49 19 91 $122,625 $1,348

Wheelchair Service 27 15 15 14 19 90 $256,231 $2,847

Runner 18 25 10 12 20 85 $220,308 $2,592

Baggage Service 22 23 11 10 17 83 $197,039 $2,374

Sorter 0 12 50 7 0 69 $142,478 $2,065

Sky Cap 12 12 8 6 2 40 $135,091 $3,377

Supervisor 7 7 5 7 12 38 $140,480 $3,697

All Others 69 67 93 59 90 378 $1,508,793 $3,992



-80%

120%

320%

520%

Cabin Service($772.1 K)

Customer Service($523.8 K)

Ramp Service($368.0 K)

All Other($122.6 K)

Wheelchair Service($256.2 K)

%Δ

Fre

q. R

ate

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

21%

11%

9%

6%

6%

6%

6%

5%

3%

3%

26%

18%

12%

8%

3%

6%

5%

4%

3%

3%

3%

34%


Lockton Companies |

Frequency DriversWORKERS' COMPENSATION - FREQUENCY DRIVERS: CLAIMANT TENURE

Section 1. Claim Count by Claimant Tenure Groups

Claimant Tenure PY 2012 PY 2013 PY 2014 PY 2015 PY 2016 Total Claims % Claims Total Incurred % IncurredAvg. Incurred/

Claim

Under 1 Year 97 150 182 150 130 709 $2,151,347 $3,034

1-1.9 Years 45 44 33 49 46 217 $690,383 $3,181

2-2.9 Years 19 25 17 15 22 98 $284,733 $2,905

3-3.9 Years 19 18 9 15 12 73 $162,421 $2,225

4-4.9 Years 15 6 2 8 8 39 $232,255 $5,955

5+ Years 70 61 56 55 98 340 $860,717 $2,532

Unknown 0 0 0 0 2 2 $4,998 $2,499



The frequency rate of claims from employees with 5+ years tenure is increasing, as G2's overall frequency declines.

-100%

-50%

0%

Under 1 Year($2,151.3 K)

1-1.9 Years($690.4 K)

2-2.9 Years($284.7 K)

3-3.9 Years($162.4 K)

4-4.9 Years($232.3 K)

5+ Years($860.7 K)

Unknown($5.0 K)

%Δ

Fre

q. R

ate

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

48%

15%

7%

5%

3%

23%

0%

49%

16%

6%

4%

5%

20%

0%


Lockton Companies |

Frequency DriversWORKERS' COMPENSATION - FREQUENCY DRIVERS: CLAIMANT TENURE

Section 1. Claim Count by Claimant Tenure Groups

Claimant Tenure PY 2012 PY 2013 PY 2014 PY 2015 PY 2016 Total Claims % Claims Total Incurred % IncurredAvg. Incurred/

Claim

Under 2 Months 24 34 53 47 23 181 $625,842 $3,458

2-3.9 Months 17 24 46 39 27 153 $446,737 $2,920

4-5.9 Months 15 27 28 26 32 128 $426,745 $3,334

6-7.9 Months 18 32 20 13 19 102 $328,145 $3,217

8-9.9 Months 10 16 20 12 16 74 $164,360 $2,221

10-11.9 Months 13 17 15 13 13 71 $159,518 $2,247

12+ Months 168 154 117 142 186 767 $2,230,509 $2,908

Unknown 0 0 0 0 2 2 $4,998 $2,499



-60%

-10%

40%

90%

Under 2Months

($625.8 K)

2-3.9 Months($446.7 K)

4-5.9 Months($426.7 K)

6-7.9 Months($328.1 K)

8-9.9 Months($164.4 K)

10-11.9 Months($159.5 K)

12+ Months($2,230.5 K)

Unknown($5.0 K)

%Δ

Fre

q. R

ate

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016


Claim Cost Drivers


Lockton Companies |

Claim Cost DriversWORKERS' COMPENSATION - CLAIMS PROCESS: REPORT LAG

Section 1. Report Lag: Accident Date to Carrier/TPA

Accident to

Carrier/TPA PY 2012 PY 2013 PY 2014 PY 2015 PY 2016 Total Claims % Claims Total Incurred % Incurred

Avg. Incurred/

Claim

0-3 Days 175 220 223 171 204 993 $2,720,496 $2,740

4-6 Days 37 25 34 38 40 174 $474,930 $2,729

7-10 Days 17 16 13 24 24 94 $295,560 $3,144

11+ Days 36 43 29 59 50 217 $895,868 $4,128

Section 2. Percent of Claims Year-over-Year

Chart Note: Grey shaded area represents benchmark

Section 3a. Accident to Employer Section 3b. Employer to Carrier/TPA

67% of claims are reported in 0-3 days. On average, claims reported 7+ days cost 40% more than claims reported within 3 days.

0%

20%

40%

60%

80%

0-3 Days($2,720.5 K)

4-6 Days($474.9 K)

7-10 Days($295.6 K)

11+ Days($895.9 K)

% o

f Cla

ims

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

67%

12%

6%

15%

62%

11%

7%

20%

88%

4% 2% 6%

0-3 Days 4-6 Days 7-10 Days 11+ Days

79%

8% 4% 9%

0-3 Days 4-6 Days 7-10 Days 11+ Days


Lockton Companies |

Claim Cost Drivers

WORKERS' COMPENSATION - CLAIMS PROCESS: MEDICAL ONLY CLAIM CLOSURE

Section 1. Medical Only Claim Counts by Closure Group

Closure Group PY 2012 PY 2013 PY 2014 PY 2015 PY 2016 Total Claims % Claims Total Incurred % IncurredAvg. Incurred/

Claim

Open 58 99 80 104 77 418 $1,262,572 $3,021

0-30 Days 3 7 11 4 2 27 $8,809 $326

31-60 Days 27 24 41 27 46 165 $84,402 $512

61-90 Days 39 24 26 20 32 141 $81,901 $581

91-180 Days 43 45 40 46 68 242 $245,976 $1,016

181+ Days 9 20 28 14 26 97 $156,630 $1,615



Section 3. Medical Only Claims % Closed and Average Days to Close

Metric PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

% Closed 68% 55% 65% 52% 69%

Avg Days to Close 98.5 115.3 105.9 107.4 110.4

38%

2%

15%

13%

22%

9%

69%

0%

5%

4%

13%

9%

0%

20%

40%

60%

Open($1,262.6 K)

0-30 Days($8.8 K)

31-60 Days($84.4 K)

61-90 Days($81.9 K)

91-180 Days($246.0 K)

181+ Days($156.6 K)

% o

f M

ed O

nly

Cla

ims

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

The number and cost of open medical only claims exceed industry benchmarks.

Please note that these metrics are valued on a Green-to-Green basis, thus only reflect the claims closed at 12 months of

development (12/31). This will not match a currently valued closure analysis.


Lockton Companies |

Claim Cost Drivers

WORKERS' COMPENSATION - CLAIMS PROCESS: LOST TIME CLAIM CLOSURE

Section 1. Lost Time Claim Counts by Closure Group

Closure Group PY 2012 PY 2013 PY 2014 PY 2015 PY 2016 Total Claims % Claims Total Incurred % IncurredAvg. Incurred/

Claim

Open 21 50 30 33 30 164 $2,370,364 $14,453

0-90 Days 1 0 1 0 2 4 $10,305 $2,576

91-180 Days 0 4 5 3 7 19 $38,773 $2,041

181-270 Days 3 0 4 0 0 7 $44,413 $6,345

271+ Days 1 0 3 0 1 5 $80,896 $16,179



Section 3. Lost Time Claims % Closed and Average Days to Close

Metric PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

% Closed 19% 7% 30% 8% 25%

Avg Days to Close 207.0 121.8 198.5 149.7 136.4

0%

20%

40%

60%

80%

100%

Open($2,370.4 K)

0-90 Days($10.3 K)

91-180 Days($38.8 K)

181-270 Days($44.4 K)

271+ Days($80.9 K)

% o

f In

dem

nity

Cla

ims

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

82%

2%

10%

4%

3%

93%

0%

2%

2%

3%

Please note that these metrics are valued on a Green-to-Green basis, thus only reflect the claims closed at 12 months of

development (12/31). This will not match a currently valued closure analysis.


Lockton Companies |

Claim Cost Drivers

WORKERS' COMPENSATION - SEVERITY DRIVERS

Section 1. Incurred Amounts by Claim Type

Policy

YearTotal Incurred

PY 2012 $568,780

PY 2013 $1,114,044

PY 2014 $833,759

PY 2015 $774,459

PY 2016 $1,095,811

TOTAL $4,386,854

Section 2. Frequency by Claim Type

Policy

YearTotal Claims

Report

Only

Claims

Medical

Only

Claims

Lost Time

Claims

PY 2012 265 60 179 26

PY 2013 304 31 219 54

PY 2014 299 30 226 43

PY 2015 292 41 215 36

PY 2016 318 27 251 40

TOTAL 1,478 189 1,090 199

$1,842,103 $2,544,751

$378,585 $455,174

$326,758 $447,702

$482,625 $613,186

Medical Only Claims

Incurred

Lost Time Claims

Incurred

$236,329 $332,451

$417,806 $696,238

Indemnity claims account for 13.5% of total claim count and 58.0% of total incurred amounts.

58% 62% 55% 58% 56%

42% 38% 45% 42% 44%

0%

20%

40%

60%

80%

100%

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

Lost Time Medical Only Benchmark

10% 18% 14% 12% 13%

68%72% 76% 74% 79%

0%

20%

40%

60%

80%

100%

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

Lost Time Medical Only Report Only Benchmark


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Claim Cost Drivers

WORKERS' COMPENSATION - SEVERITY DRIVERS

Section 1a. Lost Time Claim Severity (Avg. Incurred/Claim) Section 2a. Medical Only Claim Severity (Avg. Incurred/Claim)

Section 1b. Lost Time Claim Avg. Incurred by Cost Buckets Section 2b. Medical Only Claim Avg. Incurred by Cost Buckets

Chart Note: Grey shaded area represents benchmark Chart Note: Grey shaded area represents benchmark

Severity of indemnity claims has increased by an average of 6% per year and severity of medical only claims has increased by an average of 12% per year.

$12,787 $12,893 $10,585 $12,436$15,330

$0

$20,000

$40,000

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

Actual Benchmark

$1,317 $1,906 $1,674 $1,518 $1,922

$0

$20,000

$40,000

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

Actual Benchmark

$0

$10,000

$20,000

Medical Indemnity Expense

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016

$0

$10,000

$20,000

Medical Expense

PY 2012 PY 2013 PY 2014 PY 2015 PY 2016


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Claim Cost Drivers

WORKERS' COMPENSATION - HIGH COST CLAIMS

Section 1. High Cost Claims

Policy Year CountAvg. Incurred/

ClaimIncurred % of Total Incurred

PY 2012 15 $92,589 $1,388,840 54%

PY 2013 6 $84,576 $507,454 36%

PY 2014 3 $59,328 $177,984 23%

PY 2015 5 $63,197 $315,986 36%

*PY 2016 2 $99,185 $198,369 38%

TOTAL 31 $83,504 $2,588,634 42%

Section 2. How are high cost claims impacting the overall incurred loss trend?

PY 2012-

PY 2013

PY 2013-

PY 2014

PY 2014-

PY 2015

Change in total incurred amount -$1,201,218 -$616,010 $111,737

Change in high cost claim incurred amount -$881,386 -$329,470 $138,002

73% 53% 124%

Section 3. Common Characteristics of High Cost Claims

A high cost claim is defined by having total incurred amount of $50,000 or

more.

Green-to-Green analysis valued at 12 months of development (06/30). NAICS 33 - Manufacturing benchmark data powered by Lockton's InfoLock P&C Database

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Application of a data driven approach to safety management.

Reviewed metrics that can impact pre- and post-loss safety strategies.

Discussed benchmarking techniques.

Summary

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For more information:

Jay Gnadt, MS, CSP, CRM

SVP/Data Analytics & Risk Control

Lockton Companies LLC

214-969-6740

[email protected]

mailto:[email protected]

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