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Workers Comp Loss Runs – Ten Quick Ways To Analyze

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Ten Quick Ways – Review Workers Comp Loss Runs

Your workers comp loss runs are a very important step in reducing your company’s premiums or insurance budget,  NCCI, WCIRB or any rating bureau uses the info that is provided to your company by your insurance carrier.

Picture Of Wallet Workers Comp Loss Runs Full Of Money
123RF

 Actuaries will use the same info to produce a Loss Development Factor (LDF) if you are self insured.

Even if your loss history or incident rate is not that great, you may be able to at least reduce some of the claims that figure into your E-Mod or X-Mod.   This will also work if you are self insured on your LDF. The five quick ways to analyze the list of claims on your loss run are:

  1.  See if you have an option to access your loss runs and reserving history online.  This will usually be provided if your company has access to your claims information.   If you can get this downloaded into Excel, you have saved yourself possibly hours of inputting data into a spreadsheet.
  2.  Analyze only the claims that are open.  Claims that are already closed will not benefit your company that much unless you think overpayments were made on the claim.
  3. Input all open claims info or your loss run into a spreadsheet .  That is why #1 is so important.   You cannot do an analysis by hand.

    Insurance Workers Comp Loss Runs budget
    Wikimedia Commons – Vicente
  4. Make sure your claims spreadsheet has a place for a claims status.  That can usually easily be found if you have online access.  Some carriers/TPA’s will have this included on the paper loss runs.
  5. Check for open claims that should be closed.  This is the low hanging fruit theory at work.  Use your spreadsheet to send the adjuster(s) an email asking why the claim is still open.  Do not call the adjuster.  Calls waste their time and leave you with scan documentation.
  6. Email the adjuster to ask for a status (or updated status) if you do not have online access.  The status on new claims will usually change every 30 days.  The older claims statuses will change every 90 days.
  7. Negotiate your reserves down.   Remember that Paid + Reserves = Total Incurred.  You are trying to reduce your reserves to decrease your Total Incurred.  The Total Incurred is what is reported to the rating bureau.

    Man Holding His Pocket Workers Comp Loss Runs Money Loss
    StockUnlimited
  8. #7 can blow up your E-Mod or X-Mod if one is not careful.  Knowing which claims to point out to which adjuster is an art in itself.  If an adjuster needs to increase a file’s reserves and you try to negotiate the file reserves down, you may be reminding them to increase the file.
  9. Pay attention to subrogation.  If your carrier/TPA recovered funds from a 3rd party, are the amounts subtracted from your Total Incurred?
  10. If any of these concern you (especially #7), it may be best to call in an expert to assist with your E-Mod reduction.

The worst thing to do is to file away your Workers Comp loss runs and do nothing.  Any employer that is paying attention to their claims will almost always see a reduction in the near future.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt 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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