Orlando FL RIMS Conference 2009
I traveled to Orlando FL this week for the Risk and Insurance Management Society (RIMS) conference. There were a few things that I noticed in the one day that I had time to attend the conference and all of the activities.
Overall, I saw no reductions in the opulence of the snazzy booths by the vendors. I think that the larger companies have cut back by not attending smaller conferences. There was no economizing at this conference. Why would there be though, if the vendors were allowed an opportunity to talk to thousands of risk managers at one place at one time? I would have gone all out, too.
AIG had a vendor booth under the name AIU. Most of the risk managers that attended had made the comment on AIG that I had posted often about in the past. The insurance sector of AIG was not failing. It was the financial products section of AIG that failed so miserably that they took down the insurance services section with it.
One of the other topics that the risk managers were discussing was the overall contraction of the Workers Comp premiums due to the shrinkage of their respective companies. They were expecting that premiums would decrease. That may not necessarily be true as the complexity of the medical costs of claims has increased and has offset the diminishing payrolls. This offset will show up in the E-Mod as it will increase and offset the smaller payrolls. I stressed to every Risk Manager that I spoke with that Workers Comp has a somewhat delayed cycle of charging premiums. What is happening now will show up in their premiums for the next three or four years.
With diminishing payrolls, the ELR or Expected Loss Ratio will actually adjust down. This will also have an offsetting role in the E-Mod. Companies with fewer payrolls are expected to have fewer claims. This is not a one-for-one calculation as the ELR will decrease more rapidly than the payrolls. As with most costs, the smaller companies pay substantially more per unit of coverage than larger companies. That is the way the Workers Comp premiums system is constructed.
There are quite a few articles on this blog about cost savings on Workers Comp. It may be worth using the search box to see how to reduce claims dollars and other ways to save $ on premiums.
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