Category: Simple Concepts by Bill Zachry

The workers’ compensation claims settlement philosophy has a significant financial impact on injured workers and their employers. In addition to the economic issues, the nature of the workers' compensation settlement with an injured worker can also significantly impact the worker's success in moving beyond the injury and productively returning to work. For the past four decades, employers have been subject to a de facto settlement philosophy without fully understanding all…

Read More

Uses of Claims Reserving The rating bureaus use case reserves to help determine the pricing of workers' compensation insurance. This calculation uses the case reserves on the claim files 18 months after the insurance policy's inception. Actuaries rely on claims reserves to help determine the projected ultimate cost of the claims. They calculate a reserve loss development factor applied to the cash reserves. Their calculations use industry trends, paid losses,…

Read More

Lost time is one of the top cost drivers in workers' compensation. Effective transitional return to work (TRTW) programs are the best tool for reducing lost time.  A TRTW program significantly reduces workers’ compensation costs, strengthens employee engagement, and helps employees quickly recover from injuries. Return to work is one of the best tools for the injured worker to help facilitate the recovery from an injury. Early return to work…

Read More

Workers’ Compensation is known in insurance parlance as a “long-tail” benefits system, in part because most states do not require the claim to be legally concluded within a reasonable span of time. One of the worst elements of workers’ compensation is the extreme interval between the injury date and the claim's conclusion. Keeping injured workers unnecessarily and artificially tethered to the workers’ compensation system makes them think of themselves as…

Read More

Read Part 1 of this paper in our Outreach Center. The Ideal caseload is needed to produce the optimum throughput The “ideal” caseload is elusive. These are some of the diverse factors that should be considered when trying to determine the “Ideal Caseload”: Adjuster Skill and training. The most critical determinant of an adjuster’s caseload is the skill and experience of the individual adjuster. Senior adjusters who are efficient with…

Read More

Executive Summary The workers' compensation industry focuses on caseloads as a primary way to manage expenses. Claims administration, in the insurance vernacular, is Unallocated Loss Adjustment Expense (ULAE). This paper's primary premise is that the Workers’ Compensation industry needs to focus on reducing loss rather than managing ULAE expenses as a primary goal. The second premise of this paper is that claims administrators are focused on static claim caseloads instead…

Read More

From a property insurance standpoint, a Highly Protected Risk (HPR) is a property that highly specialized property insurance underwriters have determined to be subject to a lower-than-normal probability of loss by virtue of its fire-resistive construction, limited exposure from onsite and offsite hazards, specialized fire protection equipment, abundant source of water for firefighting purposes, support from emergency responders and management’s commitment to fire prevention and loss control. HPR is an underwriting designation…

Read More

This paper provides insight into how to use Subrosa to improve claims results appropriately.  Introduction The rose, as a symbol of secrecy, has an ancient history. The Latin phrase Subrosa (sub-rosa) means "under the rose." It is used in English to denote secrecy or confidentiality. Subrosa in workers’ compensation is the term used to denote “undercover investigation.”  Subrosa has been used as an essential tool to fight insurance fraud and as a…

Read More

Like most of us, I learned the wrong negotiation fundamentals from my family. When I was a small boy, I knew that if I asked for something from my father and he said, “Go ask your mom,” it was a no for him, but I still had a chance. “Please, please, please!” was the preferred technique.  Negotiating was not part of our family culture so I was somewhat handicapped when…

Read More

Most claims administration operations strive for consistency and accuracy in benefit provision. They also work hard to achieve these results with a low cost of claims. To accomplish this, they develop and establish policies and procedures for claims handling, hire and promote staff, and audit for compliance. Yet, within many claims operations (insurance companies, self-administered, and TPAs), their results significantly differ by claims office. Why? Usually, the difference in results…

Read More