Posted on 21 Mar 2012
Cost containment is by far the number one workers’ compensation insurance concern of employers for the next 12 months, a new study shows.
Fifty-nine percent of employers say they are very or somewhat concerned about cost containment in 2012. Employers are also concerned about increasing exposures, renewals and rising fraud behaviors.
The 2012 P&C Workers' Compensation & Safety Survey was conducted from Jan. 6 to Feb. 24, by Milwaukee-based Zywave, a provider of software-as-a-service solutions for the insurance and financial services industries. Over 3,500 employers nationwide participated in the survey.
Participants came from 20 business sectors, with heaviest representation from manufacturers (17 percent), health care and social assistance providers (15 percent), and construction (13 percent). Survey takers 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 percent of those participating reported workers’ compensation premiums under $50,000 annually.
Among the companies surveyed, 54 percent reported a payroll increase in the last year, while 21 percent reported a decrease and 24 percent said their payroll did not change. Almost half – 48 percent – reported a premium increase in the past year, while 28 percent reported a decrease and 24 percent said their premiums stayed the same.
Other survey results include:
• Participants said the most effective measure they took to control workers’ comp cost was having a safety-minded culture (65 percent).
• While 59 percent indicated that a light-duty or return to work program was an effective or highly effective method of controlling costs, only 45 percent of respondents reported having a written return to work policy.
• Other popular cost control measures were, in order of popularity, onsite 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 percent of respondents, and just over 20 percent 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 percent indicated the committee was empowered to engage policies and corrective actions.
• Of the 63 percent of employers who reported having a written safety manual, 48 percent indicated the manual had been reviewed within the past year.
• Of companies who reported being experience rated, 88 percent either did not know the value of their loss-free rating or were not familiar with the term. This question and other aspects of the survey are further explored on the WorkCompEdge blog at http://workcompedgeblog.com/.
Zywave is the leading provider of software-as-a-service (SaaS) technology solutions for the insurance and financial services industries. The company’s products include Web-enabled marketing communications, business intelligence and analytics, agency automation, and needs-assessment and financial planning tools. More than 350,000 financial and insurance professionals, including 90 of the Top 100 U.S. insurance firms and dozens of the world’s largest financial institutions, use Zywave’s proven solutions to help them differentiate from the competition, enhance client services, improve efficiencies and achieve organic growth. To learn more, visit www.zywave.com.