Looking Under the Tent: EMRs and How To Influence the Perception of Your Company

Sonja J. Guenther, ALCM, ARM, CIC, CRM

Sr. Vice President, Willis of Colorado

Jeffrey A Segall, AU, ARM, CIC, CRM, CRIS, CPCU

Sr. Vice President, Willis of Florida

Don’t Give Up!

There are many steps you can take to lower your experience mod and promote your company’s safety image in extreme bidding/pricing environments

NCCI• The National Council on Compensation Insurance

- Administrator for 39 States/400 Carriers

- Collects Statistical Data

- Provides Actuarial Formulation for Advisory Rates

- Produce Experience Modification Factors

- House Industry Classification Expertise

- Administer Rules/Regulations on:

- ownership

- experience rating

- premium audit rules

Situations That Can Create Debit Modification Factors

•Poor Injury Experience

• Errors

• Contingent EMR-

What’s Missing?

How Will it Affect Your Co?

• Preliminary EMR

• Changing Policy Periods

• Poor Management of Claims

• Wrap Up Projects

• Reduction of Payrolls

Situations That Influence Experience Factors That You Have NO Control Over:

•State Rate Changes/Expected Loss Rate (ELR) Factors

•Actuarial Formula Changes Introduced by NCCI or State Administrators (27 NCCI States Have the Experience

Rating Adjustment Plan)

•Fraud/Misclassification of a Company’s Employees

•Your Employee is Injured by Someone Else • Vehicular Injuries

• Maximum Caps on Claim Dollars, Per State

•State Administrators/NAIC• The “Out of Balance” Theory

Ways to Achieve a Credit EMR SAFETY, SAFETY, SAFETY

Frequency vs Severity Claims

Deductible Plans

NCCI Net Reporting States:

Alabama Kentucky

Colorado Maine

Florida Missouri

Georgia New Mexico

Hawaii Oklahoma

Idaho Rhode Island

Iowa South Carolina

Kansas South Dakota

Source: NCCI Basic Manual, 2007

Achieving a Credit EMR

Verify Classifications with Your Agent

Beware of Shifting to a Lower-Rated Class – EMRs Rise

Claims Management (Don’t Pay Them Yourself to Avoid the Mod)

Communication: Carrier/Agent/Injured Worker

Adjust Reserves (8 mos./3 mos. pre-renl)

Relationship with Designa. Med. Provider

Invoke Statutes: Pos. Drug Test, Failure to Return to Work

Return to Work: Temporary

Progressive

Be Committed!

When Acquiring Companies or Selling Divisions of Your Own

Reading the NCCI Worksheet Codes 9940/9941/9942, etc. are small deductible codes

ELR expected loss rate factor

- ELR factor times payroll=expected losses (“allowable” losses)

D Ratio – developed loss factors

Exp. x D=Expected Primary losses/under $5k

Claims Data

Injury Codes and Open/Closed Claims – Impact of Reserves on Mod

Actual Incurred Losses

Actual Primary Losses

14

15

17

Reading the Worksheet (cont.)

Common Errors: - Not the employee of the policyholder

- Not net of deductibles – (net-reporting states)

- Claims reported into the wrong state data

- Dollars never credited for 3rd party recovery

- Data is for another employer

that is not combinable

- Payrolls are estimated

- Payroll data missing completely

- Payrolls reported for audits in dispute

- Payrolls for incorrect class code

- Payrolls for other companies blended with yours

Topics that tell a better story than the EMR

Brag on yourself–Include Recent Safety Awards/State Awards –Compare Your Incident Rate to Industry–Show Your Lost-Time Injury Trends?

> Decreased by What % in the Past Year?

> In the Past 3 Years? 5 Years?–Attach Carrier/Loss Control Letters About Safety Program–Involvement in Industry Associations, including leadership positions

Highlight what has happened in the past year!!!

The Rest of the Story You are more than an EMR

The “safety talk” gets you more work and lower insurance costs

Established procedures–Return to Work Commitment–Claims Management Program–Compliance/Disciplinary Programs in Place and Utilized?–Team Accountability Programs

Employee selection and training–Drug/Alcohol Policies Pre/Post/Random–Pre-placement physicals –Buddy system for new hires–Standard Topics Trained On: LO/TO, CPR, Materials handling, Fall protection, power tools, ladders, slip falls–Note the Frequency of Safety Training–Use Behavior Modeling Program (“STOP”)

Promoting Your Company

List key protocols–Do You Restrict the Use of Company Vehicles?–Fleet Safety Policy–Seat Belt Policies–MVR’s of Drivers – With What Frequency?–Hardhats, boots and long sleeves–Protective Eye Wear

Job site activities–Daily Walkthroughs on Job Sites–Pre-Site Visits on Jobs-ID the Hazards–Complete Accident Investigations> Include near misses> Use of standardized forms

Sell Yourself to the Underwriter

Are you the same as all other _______ contractors?–Corporate Risk Policy> Approach to Assumption of Risk> Accident / Loss reporting protocols–Contract language / Sub Selection –Financial Strength–Pre Qualified by Key Owners or Generals–Repeat Work–Work In Progress (WIP) Report and top 10 jobs–Experienced Staff –Loss Info

Put your money where your mouth is–Company Participation in Deductible or Retention Programs–Awards Initiatives for Safe Behavior

How are You Perceived???

We Have Been Injury Free for _________ Days–Fill in the blank

Values; service, relationship, price–Loyal customer vs. Easy mark

Involved in claims reviews–Watching the cost of claims vs. Obstructing progress

Utilizing carrier loss prevention services–Partner vs. Hidden agenda / Spy

Take advantage of every opportunity to tell your own story!

Questions????