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Top 10 Challenge Areas – Expanded Part I


Top 10 Challenge Areas – The First Five

The article on the Top 10 Challenges for Workers Compensation received a large amount of inter-buzz.

Picture of Man Top 10 Challenge Graphic
(c) 123RF

Two readers suggested an expansion (better explanation) of my list.   I will split the Top 10 into two articles.

The first five of  My Top 10 areas of challenge are:

  1. Harder market – without investment returns, WC cannot sustain lowering price pressures
  2. Captives/Alternative Insurance – every company wants out of the current WC system
  3. States that have legalized marijuana – now what does that do for the workplace?
  4. Employers need to monitor next year’s premium
  5. Affordable Care Act- the elephant in the room for any healthcare discussion

Harder Market vs. Hard Market

I rarely disagree with NCCI.  However,  a few weeks ago, the published an article on the underwriting cycle that I did not agree with overall.   Investment returns besides a minuscule rate of rate on interest bearing accounts drive the insurance markets.   To NCCI’s credit, the current situation with a low rate of return (interest) is not enough to sustain a market.  The stock markets have been doing very well.  Other than bonds, carriers can produce a great rate of return on premium dollars invested in the stock market in the long term.

If the stock markets take a hard downturn and the interest rates stay low deflation would rule the day. Carriers have nowhere to go for a decent rate of return.  They will have to look to their policyholders which would equate to a hard market.

Captives/Alternate Insurance

As companies grow, there now seems to be a large push to examine other methods to find WC coverage such as captives, PEO‘s, and small/large deductibles.   Alternative insuring arrangements does carry a large risk especially if a company is going to retain a large amount of the premiums.   The alternative market must be examined with caution.

 States That Have Legalized Marijuana

Gavel top 10 challenge with court paper
Wikipedia – Jonathunder

Two recent New Mexico court decisions have shined a bright light on the problem of marijuana in the workplace.  California issued a similar decision a few years ago.  If marijuana is prescribed medication by a physician, will it be considered the same as any employee that happens to be taking a prescription while on-the-job?   Will an employee file a “drug discrimination” grievance in that instance?

Employers Overpaying Premiums At Policy Inception

 There are many articles in this blog concerning the level of payroll decreasing for certain employers.   If your company has a 20% reduction in workforce, why would you pay the same premium base as last year?

Affordable Health Care Act

As I have written so much on this subject, I will refer to this article (click on the heading) on how the changes in healthcare will affect WC.

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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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