1. Looking Under the Tent: EMRs and How To Influence the Perception of Your Company Sonja J. Guenther, ALCM, ARM, CIC, CRM Sr. Vice President, Willis of Colorado Jeffrey A Segall, AU, ARM, CIC, CRM, CRIS, CPCU Sr. Vice President, Willis of Florida

2. Don’t Give Up! There are many steps you can take to lower your experience mod and promote your company’s safety image in extreme bidding/pricing environments

3. NCCI The National Council on Compensation Insurance - Administrator for 39 States/400 Carriers - Collects Statistical Data - Provides Actuarial Formulation for Advisory Rates - Produce Experience Modification Factors - House Industry Classification Expertise - Administer Rules/Regulations on: - ownership - experience rating - premium audit rules

4. Situations That Can Create Debit Modification Factors Poor Injury Experience Errors Contingent EMR- What’s Missing? How Will it Affect Your Co? Preliminary EMR Changing Policy Periods Poor Management of Claims Wrap Up Projects Reduction of Payrolls

5. Situations That Influence Experience Factors That You Have NO Control Over: State Rate Changes/Expected Loss Rate (ELR) Factors Actuarial Formula Changes Introduced by NCCI or State Administrators (27 NCCI States Have the Experience Rating Adjustment Plan) Fraud/Misclassification of a Company’s Employees Your Employee is Injured by Someone Else Vehicular Injuries Maximum Caps on Claim Dollars, Per State State Administrators/NAIC The “Out of Balance” Theory

6. Ways to Achieve a Credit EMR SAFETY, SAFETY, SAFETY Frequency vs Severity Claims Deductible Plans NCCI Net Reporting States: AlabamaKentucky ColoradoMaine FloridaMissouri GeorgiaNew Mexico HawaiiOklahoma IdahoRhode Island IowaSouth Carolina KansasSouth Dakota Source: NCCI Basic Manual, 2007

7. Achieving a Credit EMR Verify Classifications with Your Agent Beware of Shifting to a Lower-Rated Class – EMRs Rise Claims Management (Don’t Pay Them Yourself to Avoid the Mod) Communication: Carrier/Agent/Injured Worker Adjust Reserves (8 mos./3 mos. pre-renl) Relationship with Designa. Med. Provider Invoke Statutes: Pos. Drug Test, Failure to Return to Work Return to Work: Temporary Progressive Be Committed! When Acquiring Companies or Selling Divisions of Your Own

8. Reading the NCCI Worksheet Codes 9940/9941/9942, etc. are small deductible codes ELR expected loss rate factor - ELR factor times payroll=expected losses (“allowable” losses) D Ratio – developed loss factors Exp. x D=Expected Primary losses/under $5k Claims Data Injury Codes and Open/Closed Claims – Impact of Reserves on Mod Actual Incurred Losses Actual Primary Losses

9. 14

10. 15

11. 17

12. Reading the Worksheet (cont.) Common Errors: - Not the employee of the policyholder - Not net of deductibles – (net-reporting states) - Claims reported into the wrong state data - Dollars never credited for 3rd party recovery - Data is for another employer that is not combinable - Payrolls are estimated - Payroll data missing completely - Payrolls reported for audits in dispute - Payrolls for incorrect class code - Payrolls for other companies blended with yours

13. Topics that tell a better story than the EMR Brag on yourself –Include Recent Safety Awards/State Awards –Compare Your Incident Rate to Industry –Show Your Lost-Time Injury Trends? > Decreased by What % in the Past Year? > In the Past 3 Years? 5 Years? –Attach Carrier/Loss Control Letters About Safety Program –Involvement in Industry Associations, including leadership positions Highlight what has happened in the past year!!!

14. The Rest of the Story You are more than an EMR The “safety talk” gets you more work and lower insurance costs Established procedures –Return to Work Commitment –Claims Management Program –Compliance/Disciplinary Programs in Place and Utilized? –Team Accountability Programs Employee selection and training –Drug/Alcohol Policies Pre/Post/Random –Pre-placement physicals –Buddy system for new hires –Standard Topics Trained On: LO/TO, CPR, Materials handling, Fall protection, power tools, ladders, slip falls –Note the Frequency of Safety Training –Use Behavior Modeling Program (“STOP”)

15. Promoting Your Company List key protocols –Do You Restrict the Use of Company Vehicles? –Fleet Safety Policy –Seat Belt Policies –MVR’s of Drivers – With What Frequency? –Hardhats, boots and long sleeves –Protective Eye Wear Job site activities –Daily Walkthroughs on Job Sites –Pre-Site Visits on Jobs-ID the Hazards –Complete Accident Investigations > Include near misses > Use of standardized forms

16. Sell Yourself to the Underwriter Are you the same as all other _______ contractors? –Corporate Risk Policy > Approach to Assumption of Risk > Accident / Loss reporting protocols –Contract language / Sub Selection –Financial Strength –Pre Qualified by Key Owners or Generals –Repeat Work –Work In Progress (WIP) Report and top 10 jobs –Experienced Staff –Loss Info Put your money where your mouth is –Company Participation in Deductible or Retention Programs –Awards Initiatives for Safe Behavior

17. How are You Perceived??? We Have Been Injury Free for _________ Days –Fill in the blank Values; service, relationship, price –Loyal customer vs. Easy mark Involved in claims reviews –Watching the cost of claims vs. Obstructing progress Utilizing carrier loss prevention services –Partner vs. Hidden agenda / Spy Take advantage of every opportunity to tell your own story!

18. Questions????