dennis j. powers jr. aic, arm, cpcu lamb, little & co
TRANSCRIPT
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Workers’ Compensation:Policy & Market Trends
Dennis J. Powers Jr. AIC, ARM, CPCULamb, Little & Co.
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Market Conditions
Hard Market
Soft Market
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Market ConditionsHard Market• Focus on Profitability• Premiums Increase• Don’t Like Risk
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Market ConditionsSoft Market• Focus on Growth• Premiums Decrease• Underwriters Appetite
Is More Aggressive
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Insurance Programs
•Guaranteed Cost•Loss Sensitive
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GUARANTEED COST
A classic method of risk transfer:
You pay the carrier
premium to cover your claims.
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GUARANTEED COST
Pro: Your cost is fixed, regardless of claims experience.
Con: You flex with the marketplace and the
status of your industry’s loss history.
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The Premium Summary
1. Classifications2. Experience
Modification3. Schedule
Credit
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Class, Definition & Rate
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Exposure/100 x Rate = Manual Premium
10,000 x 5.02= $50,200
Class, Definition & Rate
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?
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Experience Modification Factor
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Experience Modification Rating
•NCCI•Set Formula•Historical Picture•Comparison
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SECTION A
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SECTION B
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SECTION B
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SECTION B
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SECTION B
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SECTION CYour
Information
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?
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What Can You Do?
Review Your Claims for Accuracy
Utilize Loss Control
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This is where all the companies are going to be different.
The more you bring to the table, the more aggressive you can be.
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What Can You Do?
Claims Mgmt: Early Reporting
Accident Investigation
Return to Work
Loss Control: Documented Safety Program
Documented Training Program
Loss Assessment Report
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Effective Claims Management:Your Toolkit To Reduce Claims Exposure
George M. Canavan, AICLamb, Little & Co.
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?
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Medical Benefits
Temporary Total
Disability
Permanent Partial
Disability
Penalties
What is the Employer’s Exposure according to the Illinois WC Act?
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Early Reporting
73%
38%
16%
4%
0% 20% 40% 60% 80%
60+ Days
31-60 Days
15-30 Days
8-14 Days
Source: Liberty Mutual Data Warehouse
Delay in reporting a claim increases costs
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Accident Investigation
Don’t Underestimate Anything
Treat Every Incident The SameFreeze The Facts – People’s
Stories Change
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TIME CARD
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Accident Investigation Reports
Employee Incident Report
Employee Incident Report-Spanish
Supervisors WC Investigation Report
Witness Form
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Report Your Claims!
Delay in Reporting Can Be ExpensiveThreat of LitigationSlows Down Claims Investigation
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Return To Work
Provides You Control
Provides Significant Savings
Conveys the Right Message to Workforce
$
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Return to Work (Cost/Benefit)
Per NCCI, the median incurred cost of a WC claims exceeding more than 7 days of lost time from work is $31,600.
Claims under 7 days of lost time, the average claim is <$10,000.
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Claim Reviews
Why Conduct A Claim Review?
Who Participates In a Claim Review?
When Are Claim Reviews Done?
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Claims Handling Assessment
Designated Claim HandlerHow Do Employees Report New Claims?Accident InvestigationSubrogation InvestigationTime SheetInitial Explanation of Claims Process/Benefits to EmlployeeClaim Reporting to Insurance CarrierInitial Medical CareInternal Claims Management ProceduresSupervisor/Management TrainingReturn To Work ProgramsEstablish Special Claim Handling Instructions
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Safety & Loss ControlBill Crimmins, CSPTitan Risk Management, LLC
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Is Safety First?
Quality
Safety
Money
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How Safety Works
1. Safe Behavior2. Technically Proficient3. Compliant
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Insurance Company Expectations
Loss Control Representative SurveyRisk Selection
ResearchYour websiteOSHA (OSHA.gov)DOT (safersys.org) BLS Statistics
Report to Underwriter
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Keys to SuccessPeriodic Risk Assessments Safety And Health ProgramDocument Inspections / EffortsDocument Employee TrainingEnforce Your ProgramAccountability
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Next Steps
What are my areas of concernDo I have the expertise to address itIf not, get help
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Use Loss Control & Manage Claims
Reduce Experience Modification Factor
Allows Your Agent To
Present You As Best In Class to Negotiate
Your Schedule Credit
What Can You Do?
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Whose Responsibility Is It?Financial
(CFO, Comptroller, Etc.)
Coverage Placement
Human ResourcesClaims
AdministrationReturn To Work
ProductionOSHA, Return to Work, Accident
Investigation
InsuranceBroker
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Stewardship Reports
• Create Accountability
• Analyze Incurred Losses for Prevention
• By Location, Season, Cause, etc.
• Incent Departments to Improve Safety.
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Stewardship ReportsBy Department, or Location
Assmb. Bakery Deli Driver EngineerFood Prod IT Kitchen
Line Worker Maint. Packer Produce Recv. Sanit. Shipping Unkn Whse
Incurred Loss $156,848 $206,862 $14,893 $226,839 $908 $187,530 $707 $290,541 $97,608 $4,779 $300 $510 $783 $1,976 $390 $1,643 $797
# Claims 2 8 2 5 1 23 1 10 8 4 1 1 1 3 1 3 2
0
5
10
15
20
25
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
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Stewardship ReportsBy Time of Year
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Stewardship ReportsBy Time of Day
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Stewardship ReportsBy Type of Injury
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Direct Loss
Indirect Loss
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INDIRECT•Loss of Production• Employee Morale• Loss of Quality Employee• Time of Staff to Manage Claims• Damage to Equipment & Property
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YOU LOSE $4 FROM YOUR BOTTOM LINE FOR EVERY $1 YOUR INSURANCE CARRIER PAYS IN
WORKERS’ COMPENSATION CLAIMS
INSURANCE
YOU
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?
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Question 1: Is your rating information
accurate?
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Question 2: Are you managing your claims to
have an impact on your premium?
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Question 3: Are you managing your Loss
Control Service to have an impact on your premium?
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Question 4: Are you creating accountability by properly communicating the
results?
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Question 5: Are your current vendors a
resource?
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Questions?