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Workers Comp Claims Departments Rarely Sourced For Studies

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Workers Comp Claims Departments Have Often Ignored Numbers and Opinions

Why are Workers Comp claims departments so rarely asked for input into studies for financial data or opinions?   Many articles have been written over the years on studies concerning Workers Comp data that obviously did not ask any claims staff their opinions on the basis for a certain profound statistic.  As I mentioned in this article on self-insureds last week, a major published study completely missed 15% of the total market.

pic India Workers Comp Claims Departments joint study
Public Domain – Indian Government

 

Talking with an adjuster would have been a wise move as any adjuster would have informed the authors they were examining only 85% of the market.   Workers Comp claims departments that are Third Party Administrators work solely with the self-insured market.

Workers Comp Claims Departments Ignored Internally

One of the most concerning areas originates in the carriers or TPAs. In my 30+ year career in insurance, I was often asked about why I had certain reserves on a file by an insured.  I often had to have reserves approved by a supervisor or manager.  I was asked only once in my career by an actuary how I came to have the numbers that I had on a file.  That was when I was a Director of Risk Management, not when I was adjusting claims.

No safety personnel asked me about an account/insured that was having a spate of injuries.  The safety personnel would receive a notice from me concerning a bad accident or an insured that reported claims very late.  That was the end of the communications.

I am not saying that all carriers and TPAs are not communicating with the claims adjusters.  I decided to interview a claims adjuster and a claims VP from two different companies.   They both confirmed that communications directly with the claims adjuster seem to come from one group – the agents.  That was a positive sign.

Agents and Workers Comp Claim Departments

Agents over the years have caught on to the fact that they can possess a distinct advantage in renewals and obtaining new insured clients. I have performed many loss run reviews for agents over the years.  Driving down the Experience Modification Factors and finding out the statuses on claims were the two main goals of my assistance.

The one phone call I would receive from agents when I first adjusted claims was that all my reserves were too high and I needed to reduce them as soon as possible.  I rarely acquiesced as I could justify the reserves on almost any file without even looking at it.

When I do call workers comp claims departments while doing a loss run review, most adjusters are glad that someone cares about the file reserves or I am told that they cannot talk to me.  I usually email the adjuster (key method for communication with workers comp adjusters) to either email me back or call me when they can fit it in their schedule.   Once they identify that I am working with the agent on the policy or the self-insured account, I have had 90% of them contact me with at least a current status.  The other 10% will contact the agent directly.

Workers Comp Studies – A Complete Picture

The one suggestion I would make more any type of statistical study whether from an outside source or internally is to at least inquire (non-confrontationally) as to HOW the reserves were set on a file or set of files.

A great idea is to have online file access.  Many carriers and TPAs allow great access – even to the reserve sheets that the adjuster used to calculate the reserves.

The one response that I always seem to have about any workers comp claims study – did you happen to ask an adjuster?  I rarely receive an answer that involves workers comp claims departments.

 

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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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