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

1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

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12. 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

13. 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!!!

14. The Rest of the StoryYou 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”)

15. 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

16. 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

17. 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!

18. Questions????