Workers Comp COVID-19 Numbers Are In – Think Again

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Workers Comp COVID-19 Numbers – The System Does Not Work That Way 

Many prognosticators and the press have all rushed to publish or make sense of any Workers Comp COVID-19 numbers including claim counts and rating information. 

pic of green bananas workers comp covid-19 numbers
Wikimedia Commons – 2DU Kenya24

Unless I missed something over the last 30 years, the numbers are like a green banana.  If you are patient and wait for the green banana to ripen, it becomes palatable.   

The same can be said for the workers comp COVID-19 numbers.  They seem to be a little green presently.   I have sat through many webinars on COVID-19 numbers. 

The conclusions were the same – we will have to wait and see akin to the banana ripening.   

The Calendar Wins Every Time – September 1st/2nd Bellwether 

Many articles appear on this website covering the timing of how claim values (Total Incurred) pegs to the Experience Modification Factor.  For self-insureds, the calendar is even more delayed for claims valuation by a Loss Development Factor. (LDF).  

Hang in there with me as this can be boring – but it can save your company premiums or self-insured over-budgeting.   We will make many assumptions – the timing concept is the key.

The earliest claims value appears in any type of Workers Comp rating formula would occur on September 2nd, 2020.   Watch the term earliest – it will become HUGE in a few sentences. 

The UNIT STAT date becomes important – the day claims are reported to the rating bureaus.   So, let us get started. 

  • Policy Date 03/02/2019 to 03/02/2020 
  • Unit STAT Date = 6 months after the policy expiration
  • Small Assumption – 03/01/2020, the Workers Comp COVID-19 numbers were recognized by the Departments of Insurance and NCCI, WCIRB, and the other rating bureaus 
  • Bummer – you only have one day of COVID reporting numbers recognized by the rating bureaus – think a teeny-weeny tiny amount 
  • Big time bummer – the teeny tiny amount that could have been reported on only the 03/02/2020 claims would not even show up in your Mod until your 03/02/2021 policy (but only one day of claims possible – Egad!)
  • Think green bananas (see above pic) as most of the COVID-19 numbers would be in your next policy 03/02/2022 – 03/02/2023 – wow that late? (Yes, that late) 

1/365th of the Workers Comp COVID-19 Numbers 

Work of workers comp covid-19 numbers got delayed
Wikimedia Common – Department of Public Works and Highways

How much data will be available in 19 days?  1/365 and on 9/3 =2/365.   Just move the numbers provided in the above list one day ahead.   The effect of those numbers will not be starting until 3/2/2021.  

Bottom Line – Watch the purveyors or prognosticators of information with such phrases as the numbers are here, etc.  They are not unless you can get them from each employer or insurance carrier.    Do not eat a green banana, well, unless they are plantains.  

An honest opinion came this week from Dave Bellusci, EVP, and Chief Actuary at the WCIRB.   When asked about the Workers Comp COVD-19 numbers with respect to rate setting, he said we do not really know right now.   Thanks for your honesty, Dave.

 

©J&L Risk Management Inc Copyright Notice

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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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