Comprehensive Workers’ Comp program lowers premium by 44%



The insured is a manufacturer with 25 employees and annual revenues of $25 million.


The company experienced a spike in its Experience Mod and a corresponding increase in its premiums. Premiums were increasing at a disturbing rate of 15-20% annually and in three years had doubled from $25,000 to $50,000. The Experience Mod had increased to an alarming 1.26.


Efforts of CWCAs determined that the increase in both premiums and Experience Mod was a result of a large number of open claims. These claims, many of which were minor injuries to fingers and eyes, were averaging 10-15 new claims per month. Three major factors were adversely affecting the Mod: open claims driving up the reserves, the large number of claims, and no deductible in place.


The CWCAs took several actions to rectify the problem. The first step was to make sure that supervisors were trained to report all injuries as soon as they happened. Previously, delays in reporting were extending the life and the costs of the claim. The CWCAs also followed up on all claims within 48 hours of the injury to help expedite closing the claim. Recognizing that many of the injuries were minor, medical-only such as sawdust in the eyes, the CWCAs looked to decrease the frequency of injuries by implementing a safety program that included quarterly meetings and safety seminars. Also put into place was a $2,500 deductible program, where the employer agreed to pay for claims that fall under the deductible limits. Deductible policies discount the rates charged in return for the employer accepting responsibility for the claims, eliminating impact on the Experience Mod.


Through their efforts, the CWCAs were able to reduce the Mod from 1.26 to .89, and lowered the premium from $50,000 to $28,000.


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