dennis j. powers jr. aic, arm, cpcu lamb, little & co
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Workers’ Compensation:Policy & Market Trends
Dennis J. Powers Jr. AIC, ARM, CPCULamb, Little & Co.
Market Conditions
Hard Market
Soft Market
Market ConditionsHard Market• Focus on Profitability• Premiums Increase• Don’t Like Risk
Market ConditionsSoft Market• Focus on Growth• Premiums Decrease• Underwriters Appetite
Is More Aggressive
Insurance Programs
•Guaranteed Cost•Loss Sensitive
GUARANTEED COST
A classic method of risk transfer:
You pay the carrier
premium to cover your claims.
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.
The Premium Summary
1. Classifications2. Experience
Modification3. Schedule
Credit
Class, Definition & Rate
Exposure/100 x Rate = Manual Premium
10,000 x 5.02= $50,200
Class, Definition & Rate
?
Experience Modification Factor
Experience Modification Rating
•NCCI•Set Formula•Historical Picture•Comparison
SECTION A
SECTION B
SECTION B
SECTION B
SECTION B
SECTION CYour
Information
?
What Can You Do?
Review Your Claims for Accuracy
Utilize Loss Control
This is where all the companies are going to be different.
The more you bring to the table, the more aggressive you can be.
What Can You Do?
Claims Mgmt: Early Reporting
Accident Investigation
Return to Work
Loss Control: Documented Safety Program
Documented Training Program
Loss Assessment Report
Effective Claims Management:Your Toolkit To Reduce Claims Exposure
George M. Canavan, AICLamb, Little & Co.
?
Medical Benefits
Temporary Total
Disability
Permanent Partial
Disability
Penalties
What is the Employer’s Exposure according to the Illinois WC Act?
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
Accident Investigation
Don’t Underestimate Anything
Treat Every Incident The SameFreeze The Facts – People’s
Stories Change
TIME CARD
Accident Investigation Reports
Employee Incident Report
Employee Incident Report-Spanish
Supervisors WC Investigation Report
Witness Form
Report Your Claims!
Delay in Reporting Can Be ExpensiveThreat of LitigationSlows Down Claims Investigation
Return To Work
Provides You Control
Provides Significant Savings
Conveys the Right Message to Workforce
$
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.
Claim Reviews
Why Conduct A Claim Review?
Who Participates In a Claim Review?
When Are Claim Reviews Done?
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
Safety & Loss ControlBill Crimmins, CSPTitan Risk Management, LLC
Is Safety First?
Quality
Safety
Money
How Safety Works
1. Safe Behavior2. Technically Proficient3. Compliant
Insurance Company Expectations
Loss Control Representative SurveyRisk Selection
ResearchYour websiteOSHA (OSHA.gov)DOT (safersys.org) BLS Statistics
Report to Underwriter
Keys to SuccessPeriodic Risk Assessments Safety And Health ProgramDocument Inspections / EffortsDocument Employee TrainingEnforce Your ProgramAccountability
Next Steps
What are my areas of concernDo I have the expertise to address itIf not, get help
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?
Whose Responsibility Is It?Financial
(CFO, Comptroller, Etc.)
Coverage Placement
Human ResourcesClaims
AdministrationReturn To Work
ProductionOSHA, Return to Work, Accident
Investigation
InsuranceBroker
Stewardship Reports
• Create Accountability
• Analyze Incurred Losses for Prevention
• By Location, Season, Cause, etc.
• Incent Departments to Improve Safety.
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
Stewardship ReportsBy Time of Year
Stewardship ReportsBy Time of Day
Stewardship ReportsBy Type of Injury
Direct Loss
Indirect Loss
INDIRECT•Loss of Production• Employee Morale• Loss of Quality Employee• Time of Staff to Manage Claims• Damage to Equipment & Property
YOU LOSE $4 FROM YOUR BOTTOM LINE FOR EVERY $1 YOUR INSURANCE CARRIER PAYS IN
WORKERS’ COMPENSATION CLAIMS
INSURANCE
YOU
?
Question 1: Is your rating information
accurate?
Question 2: Are you managing your claims to
have an impact on your premium?
Question 3: Are you managing your Loss
Control Service to have an impact on your premium?
Question 4: Are you creating accountability by properly communicating the
results?
Question 5: Are your current vendors a
resource?
Questions?
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