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NCCI Annual Issues Symposium 2022 – Day 2 – Sessions

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The NCCI Annual Issues Symposium 2022 – Day 2 – a huge amount of data and ideas.

The second day of the NCCI Annual Issues Symposium 2022 started with Dr. Bob Harwig, University of South Carolina. Dr. Hartwig covers the most data in the shortest amount of time.

nccu annual issues symposium 2022
(c) NCCI – Boca Raton, FL

Dr. Bob Hartwig—Top 5 Ways COVID Changed the Economics of Workers Compensation—For Better or Worse – Clinical Associate Professor of Finance, Darla Moore School of Business, University of South Carolina

I asked Dr. Hartwig with only 45 minutes available – how many slides would he have to cut out from his usual 60-minute presentations.   He said that he took out two – cutting to 63.  Classic Dr. Bob.

  • Despite many analogies, today’s economy and operating environment for insurers couldn’t be more different from the late 1970s to the early 1980s.
  • The “R” word: Recession is increasingly likely but still avoidable.   Recent recessions have been much less severe.
  • Extreme volatility in the investment environment is both an opportunity and a concern for insurers, especially in long-tail lines such as worker’s compensation.
  • The economic reverberations from COVID will last years beyond the end of the pandemic itself.
  • “America’s labor force is sick, tired, and grumpy.”
  • “Economic uncertainty has Wall Street climbing its proverbial ‘Wall of Worry,’ and P/C insurers are along for the ride.”
  • The labor markets are tight > 3.5% unemployment
  • The Misery Index  = unemployment rate + inflation rate    The highest misery decade was 1974 – 1983.
  • Workers Comp Combined ratio for next year falls from 87.0 to 86.5.
  • The residual market is now less than 1% of worker’s comp premiums
  • There are two jobs available per unemployed person.

 James Guszcza—Human Factors—Expanding the Science of Predictive Analytics and Artificial Intelligence (AI)

  • Human-machine hybrid intelligence is a better framework to guide practice than “AI.”
  • The focus of the hybrid-intelligence design is real-world results, not machine outputs.
  • Hybrid-intelligence design goes beyond machine learning to take into account human values, needs, and relative cognitive strengths and limitations.
  • AI is the new electricity
  • AI is an ideology – not a technology
  • AI stupidity by humans causes AI to be scrapped
  • Algorithms work well, people don’t work well with algorithms
  • Human strength – judgment Algorithm strength – reckoning
  • Excessive automation almost killed GM

“Without smart design, machine learning can result in artificial stupidity rather than artificial intelligence.”

Sean Cooper – Practice Leader and Senior Actuary, NCCI and Raji Chadarevian – Director, Medical Regulation and Informatics, NCCI—The Medical Dilemma

  • Medical inflation in worker’s compensation has been moderate for the past decade. But with the recent dramatic rise in consumer prices, concerns have emerged about medical inflation.
  • 3 phases of medical treatment
    • Critical
    • Sub-critical
    • Medical/pharmacy maintenance
  • Physicians are 41% of the medical cost distributions
  • ASCs increased 6% year-over-year
    • More major surgeries performed at ASCs
    • Costs are 11% lower at ASCs
  • RXs are 7% of medical costs  (negative 2.6% annual change)
  • 40% of medical payments are under Medicare/Medicaid
  • Changes in medical claims costs are driven by two factors: the price of medical services and utilization, which measures the mix and number of services provided to an injured worker.
  • NCCI’s most recent data shows drug costs are declining, physician costs are up slightly, and facility costs are rising in the worker’s compensation system.
  • Raji Chadarevian: “Prices are only half the story. Prices matter. Utilization matters also.”  I have been saying this since the early 2000s, any decrease in price is counterbalanced with an increase in utilization. 
  • Sean Cooper: “While general inflation is up, worker’s compensation medical trends have been moderate and the forecast remains relatively moderate in the near future.”

 ©J&L Risk Management Inc Copyright Notice

The presentations were stellar and the sound system was outstanding.  For videos of the NCCI Annual Issues Symposium 2022, go here.

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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 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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