Tips and Tools for Risk Management
At the 2018 National Council of Self-Insurers Annual Meeting a panel of employers discussed workers’ compensation tips. The panel was:
- Rob Quast – Director of Risk Managment, Kroger
- Janet Kral – VP Risk Management, Nordstrom
- Zoe Zinn – WC Program Manager, Packaging Corporation of America
- Max Koonce – Managing Director, Sedgwick (Moderator)
What is your overall culture toward risk?
- Customer obsessed. We expect our employees to always be thinking about our customers first and what is best for them. Our self-administered claims team views our injured workers as their customers too so we are giving them the same treatment we would give the customers in our stores.
- Safety is part of our leadership model and our thought is every accident is preventable.
- Open communication is encouraged at all levels on the issue of safety and loss prevention. We also focus on talent management to make sure we have the right people in the right places to achieve the expected results.
What is your approach to insurance?
- We have everything in our captives and all our insurance flows through those captives. We review collateral requirements when making decisions around self-insurance vs deductible.
- We do a risk assessment to determine the financial impact of various scenarios to decide on retentions. We would rather take higher retentions than trade dollars with carriers to have coverage in an active layer. We self insure our workers’ comp in most states.
- We look at actuarial studies and the potential for loss when considering the amount of insurance and retention’s. We strongly consider the financial strength of the carrier when purchasing coverage.
Do you allocate losses back to the locations?
- We allocate losses back to the locations at a fixed amount based on their experience. If their losses improve, they see a financial benefit at the location in their P/L.
- We charge back a high dollar amount of the actual losses to our stores so we are holding our store managers directly responsible for their losses.
How do you determine the “value” of your claims management program?
- We view our TPA as a true partner in our operations. When claims are disputed, we make sure we communicate options to the injured worker on other places their condition can be covered (under group health for example)
- Most of our operations are self-administered. We spot-check our claims to make sure they are being handled with a customer service focus. Are they listening to the injured worker and responding to their needs?
- We rely heavily on our TPA and that is 90% of our spend for our risk management department. We expect our TPA to follow our direction and we review benchmarking reports to monitor activity. We have 3 offices handling our claims and 2 of those offices are fully dedicated to us. Because of this those people tend to identify more with our company than the TPA they work for.
What are the most critical aspects of your claims process?
- Dispute avoidance. We like to give people options when a claim is not going to be paid. Our goal is to keep litigation to a minimum.
- Efficiency and a customer service focus. It is a very compliance driven process but we still need to be strategic in our thinking.
- Timely reporting and communication is key to getting a positive result.
What do you look at to evaluate your total costs of risks?
- We look at our “total costs”. Administration costs, insurance costs, and claims costs.
- Long term partnerships are important to us as we feel they strengthen our program.
- Beyond fixed costs, we also try to look at reputation and brand protection.
How do you manage the message to the C-Suite?
- It is important to know your audience when talking to the C-suite. Some may want more details about the risk management issues, others are focused on only money.
- Focus is on trends, budget, and managing top risks.
- We have gone through many acquisitions over the years and it is important for there to be a “meeting of the minds” with these to make sure we have a full understanding of their claims history and risk management challenges. Usually we do not want to assume liability for legacy claims because of the problems inherent with them.