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Workers Comp Claims Explosion If Economy Rebounds Quickly


The Workers Comp Claims Explosion Due To Learning Curve

Picture of Worker Man Sitting on Big Bomb Workers Comp Claims Explosion Concept

Will a workers comp claims explosion occur in the next few years?  The economy is going to eventually recover from its recent lows.  If there is a very quick rebound, insurance carriers, TPA’s, employers, and any type of insurance personnel must be prepared for an explosive increase in the number of claims.I often do phone consulting for investment groups examining Workers Comp vendors from TPA’s to translation services.  One of the questions I am often asked is there anything out there that would turn the claims industry upside down.

The Learning Curve will be the bane of many Workers Comp insurance personnel and any employer that is large enough to have an Experience Rating  (E-Mod or X-Mod).  We have all heard of the studies that almost 90% of accidents occur the first time a person is using a new tool or machine.  This number can be proven very easily using the learning curve.

I coined a term a number of years ago when I was working a claims desk.  The number of accidents right after a hurricane spiked heavily in the construction industries.   The investigation of almost all the claims showed a discernible trend.  Due to such a heavy increase in demand for construction workers, there were many new unskilled workers on the job.  I saw many power tool incidents.  I called it the “Hurricane Syndrome.

“The true formula for the learning curve is here.   If you look at the graph on the page, you can see that it takes someone much longer to do a task than when the workers gains experience.  OSHA does a great job of forecasting injury rates over 200,000 work hours.  However, I do not see a study from OSHA on time the worker spent on the job before the accident.

Picture of Hand Doing Puzzle Workers Comp Claims Explosion Learning Curve

The learning curve does not always apply to workers trying out a tool or machine for the first time.  Workers that experience long standing layoffs will be much more likely to have accidents as they may not have used certain machines or tools for months or possibly years.

My advice for insurers/TPA’s is to heavily staff their claim departments when signs of the recovery become obvious.  The learning curve has been tested since the 1800’s and was studied heavily by NASA starting in the 1930’s.  The spike in injuries is not a theory.  It is a proven fact.

Employers will need to be ever vigilant in reporting their claims and following up with their WC adjusting staff.  Providing your insurance carrier of TPA with the First Reports of Injury in a timely manner will be very critical.  

If anyone can locate the study on the exact % of injuries when someone uses a machine or tool for the first time, please email me the link and I will insert in this post.  Thanks.

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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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