Cost Containment A Major Workers Compensation Insurance Concern

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A new study shows the number-one workers compensation insurance concern of employers during 2012

, moving into next year, is cost containment. Conducted from January 6 to February 24, Zywaves Workers Compensation Safety Survey studied 20 business sectors, with the heaviest representation coming from manufacturers (17 percent), health care and social assistance providers (15 percent), and construction (13 percent). Survey respondents included human resource personnel (36 percent), finance staff (19 percent), CEOs or presidents (16 percent), and other staff, including safety managers, risk managers and operations directors.

Some 57% of those participating reported workers' compensation premiums under $50,000 annually. Many said they are somewhat concerned about their ability to contain costs this year. Employers are also concerned about increasing exposures, renewals and rising fraud behaviors.

Among the companies surveyed, 54% reported a payroll increase in the last year, while 21% reported a decrease and 24% said their payroll did not change. Almost half (48 percent) reported a premium increase in the past year, while 28% reported a decrease and 24% said their premiums stayed the same.

Other survey results included certain data:

Participants said the most effective measure they took to control workers' comp cost was having a safety-minded culture (65 percent)

Of the 63% of employers who reported having a written safety manual, 48% indicated the manual had been reviewed within the past year

While 59% indicated that a light-duty or return to work program was an effective or highly effective method of controlling costs, only 45% of respondents reported having a written return to work policy

Other popular cost control measures were, in order of popularity:

On site accident evaluations

Loss prevention evaluations

Zero-accident goals

Having a dedicated claims manager

Safety committee efforts, and

Using a preferred occupational medicine facility

After cost containment, employers expressed notable concerns about increasing exposures (35 percent), renewals (35 percent), and rising fraud behaviors (31 percent). Market availability was a concern of 26% of respondents, and just over 20% were worried about carrier stability

Companies reported having a safety director (54 percent) more often than a risk manager (29 percent), although duties of these personnel may often be similar. In cases where a safety committee existed (48 percent), 81% indicated the committee was empowered to engage policies and corrective actions

Of companies who reported being experience rated, 88% either did not know the value of their loss-free rating or were not familiar with the term.

by: KellieM.Atkinson

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