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Over-reserving Workers Comp Claims – How To Tell


Over-reserving on WC Claims

WC claims Over-reserving analyses are difficult. I usually try to post every two days. I have not posted for four days as this area was too complicated to fit into one post.

Graphic Of Bar Graph Over-reserving with Magnifying Glass

The bottom line is that it is very difficult if not impossible to identify reserves that are too high without at least 5 – 7 years of Workers Comp adjusting experience.

As I have said numerous times in presentations and in this blog, online claims access is the key to controlling the reserving of your files.  If you are not up-to-date on your claims, questioning the reserves on any claim may end up with an unanticipated reserve increase.

Calling attention to the wrong claims may harm your claim reserve levels.   Do not inquire about reserves on a set of claims without having some updated reason that would result in a claims reserve reduction.  A positive medical status update may be a good reason for a reserve reduction inquiry to the adjuster.

I have 24+ years of experience in claims adjusting, underwriting, and statistical analyses, particularly in Workers Compensation. I find it difficult myself to just look at a loss run and decide whether or not the reserving is in line with acceptable standards.

If I just have a loss run, I or someone on our staff has to email the adjuster for a status. If you have the availability of customizing your loss runs, ask for the status field to be added. At least then you will know where the claims stand that are affecting your E-Mod or Loss Development Factor if you are self-insured.

I tried to cover Workers Comp reserving over the last two weeks in detail. I hope it was helpful. If you have any questions, please drop us an email.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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