Large Deductible Program




Cash flow
Less $ on premium
Retained losses are
deductable
Catastrophic protection

Pricing driven by
individual risk history

Claims handling

Have financial capacity to
retain risk; financials
meet carrier criteria

Collateral and escrow

Less budget stability

Pricing driven by
individual risk history

Increased administration
1
Self-Insured Retention Program

No collateral

Less fronting cost

Retained losses are
deductable

TPA or self administration
selection

Choose your lawyer

Insurers do not “Drop
Down”

Dedicated internal
resources to manage
claims

Limited carrier selection

Certificate of insurance
issues
2
Qualified Self-Insured Program

Frequently the least
collateral

Must still buy excess
coverage

Possible reductions in
assessments and taxes

Collateral must be posted
in each state

TPA or self administration
selection

States hold on to
collateral for a long time

Choose your own lawyer

No “Out and Back In”
without reapplication

Increased administration
3
Risk Transfer/Risk Retention Efficient Frontier
Risk Transfer
Savings
Bare
The Efficient Frontier 1
Risk Financing
Alternatives
Current
“deductible”
program
Guaranteed
Cost
Risk Retention
efficient frontier is the point at which there is no greater expected reward
for a given level of risk retention
1The
4
Total Cost of Risk
Measuring Program Efficiency Over Time
TCOR + Savings
Historical TCOR
Defining Total Cost of Risk
Historical TCOR Analysis
Total Cost of Risk
Total Cost of Risk as % of Sales
Company Sales Revenue (000s)
Total Premium
$6M
Premium as % of Sales
0.70%
0.60%
$5M
0.50%
$4M
0.40%
$3M
0.30%
$2M
0.20%
$1M
0.10%
PreviousYear
PreviousYear
PreviousYear
PreviousYear
Current Cost
Target Cost
5
Walmart Stores, Inc. is comprised of:
Walmart U.S. (approx. 1,420,000 associates)
•
•
•
•
3,600 Walmart Retail Stores
153 Neighborhood Markets
598 Sam’s Clubs
142 Distribution Centers
Walmart International (approx. 709,000 associates)
• 4,557 Retail Units
• 14 Countries
7
• Self-insurance – 13 states
• High deductible insurance
coverage – 36 states
• Administration through
wholly owned subsidiary
TPA – 35 states
General Liability
Workers’ Compensation
Walmart’s casualty program utilizes the
following structure:
• Self-insurance – all states
• Administration through
wholly owned subsidiary
TPA – 49 states
• Administration through
outside TPA – 1 state
• Administration through
outside TPA – 14 states
8
The Walmart Casualty Focus:
Workers’ Compensation
ensure associates that suffer work injuries:
• Receive prompt and appropriate medical care that is focused on their recovery
and return to gainful employment;
• Receive prompt and appropriate disability benefits;
• Compliance.
General Liability Program
ensure all customers claims are:
• Addressed promptly and appropriately while recognizing the importance of our
customers in the retail environment;
• Compliance.
9
Program structure allows Walmart to concentrate
on our associates and customers through:
Self
Administration
RMIS
Risk Control
Process
Improvement
10
Administering claims through our wholly owned
subsidiary TPA helps ensure:
Appropriate claims
management by:
Data integrity:
• Accuracy
• Owning the process
• Analysis
• Experience in best practices
between in-house TPA and
outside TPA vendors
• Functional
• Compliance focus
• Direct relationship between
operations and risk
management
11
The appropriate RMIS tool is vital to the continual evolution
of our program by allowing:
Flexibility
Scalability
Sustainability
The RMIS tool must act
as an “enabler” to allow
your property and
casualty program to
pursue overall company
objectives.
12
Risk Control, although not part of our Risk
Management Team, is an integral partner that
focuses on:
Accident prevention
Safe place to work /
safe place to shop
Risk Control
Accident investigation
Post accident support
13
Lastly, our program structure allows for continual
focus on process improvements.
Utilization of real-time data from all
aspects of Walmart to drive:
Safety focus
on accident
prevention
Workflow
process
improvements
Trend analysis
Resource
allocation
14
In conclusion, our program structure:
Works with
our business
model
Ensures that we
capture and
evaluate the data
to drive
improvement
Allows for
optimum focus on
our customers and
our associates
15
Current Reality Panel Discussion
Questions
&
Answers
17