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 EMRWhat’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????