Quantifying Leading Indicators to Guide Loss Prevention Approaches

LEN WELSHBAKER & WELSH, LLC

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The Future of Workplace Safety

• Developing reliable leading indicators of injury risk and future losses.

• Quantifying accident and claim reduction realized by safety systems that work.

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(1) New Loss Prevention Program Approaches

• Program purpose to be redefined, clarified, and directed more powerfully toward workplace injury and illness prevention.

• Identify policyholders most at risk for accidents.• Deliver behavior-changing service that measurably lowers

injury and illness risk for policyholders and their employees.• Gather data to identify reliable predictive indicators of future

loss experience.• Assist other units in obtaining policyholder data they need.

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(2) State of the Art Technology Essential to Establishing the New Model

• Replace handwritten notes/reports with tablet data entry offering:

• User friendly, flexible configuration• Robust data collection and analysis.• Reduced duplicative data entry.• Effective management tools.

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(3) Service delivery and employer safety data collection must be made as consistent as possible from consultatnt to consultant.

Unmanaged professional judgment of Loss Control Professionals to be replaced by…

• Tighter management of consultant services through a protocol of:

• Highly structured assessment and scoring of workplace hazards and safety systems.

• Specific recommendations for corrective measures and verification of compliance. 5

(4) Paper notes requiring reentry and narrative heavy reports/letters to be replaced by…

Tablet-based data-capture and report generation to be delivered via electronic documentation generation designed specifically for loss prevention/control.

• Replace storage of data and reports in non-searchable pdf format with searchable, relational data base.

• Require structured safety issue analysis with specific recommendations for corrective measures and verification of compliance. 6

(4) Paper notes requiring reentry and narrative heavy reports/letters to be replaced by…

• Tablet-based data-capture and report generation to be delivered via electronic documentation generation designed specifically for loss prevention/control.

• Replace storage of data and reports in non-searchable pdf format with searchable, relational data base.

• Require structured safety-issue analysis with specific recommendations for corrective measures and verification of compliance.

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(5) The data collected will be more robust, detailed, and … more valuable.

• One major goal: Use scoring of safety systems as a predictive indicator utilizable for underwriting.

• E.G., do high/low scores on a policyholder’s IIPP correlate with loss outcomes?

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Management commitment/assignment of responsibilities

□3 □ 2 □ 1 □ 0

Safety communications system with employees

□3 □ 2 □ 1 □ 0

System for assuring employee compliance with safe work practices

□3 □ 2 □ 1 □ 0

Scheduled inspections/evaluation system

□3 □ 2 □ 1 □ 0

Accident investigation

□3 □ 2 □ 1 □ 0

Procedures for correcting unsafe or unhealthy conditions

□3 □ 2 □ 1 □ 0

Safety and health training and instruction

□3 □ 2 □ 1 □ 0

Recordkeeping and documentation

□3 □ 2 □ 1 □ 0

Overall Rating

□3 □ 2 □ 1 □ 0

3 = Outstanding 2 = Acceptable 1 = Needs Improvement 0 = None

Specific Safety Issues and Programs

Confined Space Program

□3 □ 2 □ 1 □ 0 □ N/A

Excavation Safety

□3 □ 2 □ 1 □ 0 □ N/A

Scaffold Safety

□3 □ 2 □ 1 □ 0 □ N/A

Ladder Safety

□3 □ 2 □ 1 □ 0 □ N/A

Flagging Safety

□3 □ 2 □ 1 □ 0 □ N/A

Fall Protection

□3 □ 2 □ 1 □ 0 □ N/A

Heat Illness Prevention Program

□3 □ 2 □ 1 □ 0 □ N/A

Lockout and Blockout

□3 □ 2 □ 1 □ 0 □ N/A

Machine Guarding

Re-purposing Loss Prevention to focus excusively on the title, as opposed to marketing…

(1) Target worst actors for loss prevention services.

(2) Require three site visits during first year--1 month, 3 months, 9 months after selection, or other intervals.

(3) Use detailed scoring system (0 to 3) to rate effectiveness of safety procedures.

(4) 0 or 1 score triggers recommended safety procedure changes and follow-up.

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Re-purposing Loss Prevention to focus excusively on the title, as opposed to marketing…

(5) Use tablet technology and software specifically designed to manage loss control service delivery and data collection.

(6) Follow serviced policyholders in prospective study to determine losses going forward.

(7) Employ software to capture data in relational data base, allowing study of scoring patterns for possible statistical relationship to losses.

(8) Use confirmed statistical relationship as leading indicator for pricing purposes and bargaining power.

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Roofing Safety Incentive Program Preliminary Evaluation

July, 2019

BackgroundRoofing Safety Incentive Program

The Roofing Safety Incentive Program began in January 2016 with the first cohort of employers entering the program.

To be eligible, a policy must have had at least $10,000 in estimated annual premium AND a Tier Factor >= 1 (average performance or worse).

This study analyzes the impact of the Roofing Safety Incentive Program by comparing participating employers (“Accepted”) to two populations:

“Accepted & Removed”: Employers that initially participated but either did not stay in the program or were removed due to lack of compliance with the safety guidelines, and

“Everyone Else”: Employers with better than average experience or otherwise not eligible (i.e., premium size too small).

Conclusions are based on indemnity claim frequency for 2016 and 2017 policies at 18 months (data evaluated as of June 30, 2019).

The severity data is significantly more variable than the frequency data. Unlimited and limited-to-$250K loss severities were reviewed, and these data are inconclusive at this time. They will continue to be monitored and included in future updates of this analysis.

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Indemnity Claim Frequency

15Employer Count (2016) Employer Count (2017)  Accepted 222             Accepted 139            Accepted & Removed 75               Accepted & Removed 69            Everyone Else 1 225 Everyone Else 1 405

9.71 

5.62

7.747.46

5.735.40

 ‐

 1.00

 2.00

 3.00

 4.00

 5.00

 6.00

 7.00

 8.00

 9.00

 10.00

Prior Yrs (2013‐15) Curr Yr (2016)

Inde

mnity Freq

uency

Indemnity Frequency at 18 months ‐2016 Policies

AcceptedAccepted & RemovedEveryone Else

7.24 

2.45 

6.36 

6.87 

5.10  4.94

 ‐

 1.00

 2.00

 3.00

 4.00

 5.00

 6.00

 7.00

 8.00

 9.00

 10.00

Prior Yrs (2014‐16) Curr Yr (2017)

Inde

mnity Freq

uency

Indemnity Frequency at 18 months ‐2017 PoliciesAcceptedAccepted & RemovedEveryone Else