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Workers Comp Data Mining From Inside Out – A Look Inward

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Workers Comp Data – From The Inside Out

 Most Workers Comp Data analysis reeks of being too standard in nature. Workers Comp and general insurance data mining was one of the presentations at the SC PRIMA conference this week.  The presentation was great.  The two Willis Companies presenters covered such areas as:

Picture Of Businesspeople Workers Comp Data Presentation In Conference Room
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  • GIGO – Garbage In = Garbage Out
  • Combining data sets
  • Analyze results
  • Benchmarking against other available data

The main premise was to take all the Workers Comp data from the outside including competitors if possible and look inward.  Overall, this is a great way to analyze Workers Comp.  This method does require a large amount of data trimming and time to accomplish.   The process does work in most instances.

There may be another way to examine the data – from the inside out – which is different from the aforementioned method.   Most employers have an Experience Modification Factor (Mod).  Self insured employers should have a Loss Development Factor (LDF) calculated each year.   The LDF is similar to a Mod.

The LDF or Mod is based upon claims data that has hopefully been input correctly by the Workers Comp claims staff.  The most crucial part of the data is the Total Incurred = Paid + Reserves.

Using the claims data from a loss run along with the NCCI or State Rating Bureau Mod, the data can be distilled into the claims that affect the Mod the most.  The same can be said for the LDF.   The claims data is on the right side of the Mod sheet.

Picture Of Hand Holding Magnifying Glass Workers Comp Data With Bar Chart Concept
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LDF calculations are usually more complex to follow.  You may want to ask the company or person that provided your LDF what were the data inputs and possibly receive them on some type of spreadsheet.

Following those claims back to the loss run from either the LDF or Mod, one can easily see how they are calculated for the most part.  The claims on the loss run that are on the Mod or LDF sheet are the ones which deserve the most  attention.   The questions to ask about those claims are:

  • What caused the accident?
  • Was there an element of safety that was not in place?
  • What body parts were injured? – inquire if this is noted as miscellaneous
  • What happened such as slip, trip or fall, hit by machinery, etc?
  • What type of medical treatment did the injured employee receive?

These are a few of the questions to ask yourself about the data or your loss run and LDF/Mod.  This quick method will have your company on the path to a lower Mod or LDF.

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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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