Workers' Comp Policy Renewal

Terrorism Risks Weigh On Workers’ Compensation Renewals

Insurers are trimming workers’ compensation policy periods amid terrorism backstop reauthorization uncertainty.
By: | February 17, 2014

Large financial institutions in New York are finding  insurers unwilling to renew their workers’ compensation policies for a full year due to Terrorism Risk Insurance Program Reauthorization Act uncertainties.

In a broader range of renewal cases, insurers are attaching endorsements to workers’ comp policies that would allow the underwriters to amend their pricing for policies extending coverage into 2015 should Congress fail to renew TRIPRA, said Anthony DeFelice, managing director of Aon Risk Solution’s national casualty practice.

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TRIPRA provides the property/casualty industry a terrorism loss backstop, but it is set to expire December 31, 2014 if Congress does not reauthorize it.

The backstop is particularly important for workers’ comp policies because under statutory requirements the insurance provides employers with unlimited coverage.

Without guarantees of a backstop in place, underwriters are particularly anxious about renewing coverage for employers who are at a higher risk from terrorism threats and have a large concentration of employees, particularly in areas like New York and Washington, D.C., sources said.

“Those [policyholders] that have the large concentration, it creates a lot of uncertainty and anxiety among underwriters. Those are the [employers] that are getting the less than 12 month [renewal] policies.” – Anthony DeFelice, managing director of Aon Risk Solution’s national casualty practice

The same is occurring for defense-industry employers with operations in the Northeast United States, said Mark Walls, senior vice president and workers’ comp market research leader at Marsh Inc.

“It’s the type of risks that have a higher probability terrorism exposure,” Walls said. “Those financial institutions in New York and defense contractors are pretty high on that list.”

Walls and DeFelice said brokers are scrambling to find alternative coverage for their clients who recently have learned insurers will not renew their coverage beyond year’s end without TRIPRA’s reauthorization.

“Those [policyholders] that have the large concentration, it creates a lot of uncertainty and anxiety among underwriters,” DeFelice said. “Those are the [employers] that are getting the less than 12 month [renewal] policies.”

In other cases employers who do not have a concentration of employees are seeing the endorsements allowing underwriters to “amend” their premiums should TRIPRA not be renewed, DeFelice said.

The “endorsement says insurers can amend the premium and that has only one implication, which means they will increase the premium” if TRIPRA is not renewed, DeFelice said.

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While underwriter concern mounts, opinions vary on whether Congress will reauthorize the backstop before year’s end.

Walls said that given Congress’ recent lack of accomplishments he is pessimistic, while DeFelice said that common expectations are for reauthorization, but with changes to the program.

For now, insures are urging their policyholders to join them in lobbying Congress to reauthorize, DeFelice said.

“Insurers want to be shoulder to shoulder with their clients to make sure TRIPRA gets renewed,” he said.

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]