One of the things that makes workers’ compensation such a challenge for employers and carriers is the long-tail nature of the claims. This long tail means that premiums collected today must cover losses for years to come. The rising costs of these tail claims has a significant impact on both carriers and employers in terms of cost of insurance today and future reserves. At the WCI’s 2017 Workers’ Compensation Educational Conference a group discusses the financial impact of these growing liabilities on industry and provides strategies for reducing them. The speakers for this session were Matthew Cohen, VP Client Services, Sedgwick CMS, Stephen Peacock, Assistant Vice President Claims, Safety National and David Colon, Associate Actuary, NCCI.
A tail claim can be classified as any claim that has been open for more than one year. This definition differs from company to company.
What can we do to help with long tail claims?
-Treat this as a way of life, not a project
-Don’t lose sight of the claims that will be aged
-Identify potential closures
Preventive aged roundtables
- Round tables between supervisor, examiner, and operations manager at 18 months to strategize
- Additional review at 22 months to plan for any other possible resolution prior to 24 month mar
Resolution focused monthly round table for dedicated offices
- Monthly roundtable between supervisor, examiner, and client services manager
Partner with structure company
- Colleague assigned to each office
- Participate in mediations and settlement discussions
Bi Weekly tracking
- Provide examiners a year end goal
- Provide incentives for meeting milestones
Excess carrier’s viewpoint: What to do?
The growing exposure- dont be afraid
Address medication usage
Address emotional issues
Physician suggested medical treatment
Reduce exposure in order to improve settlement possibilities
Reach out to your experts
With these tail claims, know and use your experts. These claimants have been dealing with this issue for years. Do more than simply settling and think about how you can help the injured employee and how to can benefit all parties involved.