Webcast: Workers’ Compensation: Looking Ahead to 2018
Panelists from Marsh, Marsh Risk Consulting, and Sedgwick Claims Management Services discussed innovations in workers’ compensation and workplace safety and the state of the insurance market during a recent webcast sponsored by Marsh’s Workers’ Compensation Center of Excellence.
In the third quarter of 2017, workers’ compensation rates were down, on average, 3.2%, with a median rate decrease of 1.7%. 51% of clients renewed their workers’ compensation programs with rate decreases, and another 18% renewed flat.
“Overall, the market remains very buyer friendly,” said Dan Aronson, Marsh’s US Primary Casualty Placement Leader. “There’s a lot of capacity in the marketplace. You have new entrants targeting favorable business segments and some even going after more challenging risks. And you have mature market participants that are doing everything they can to hold on to existing business but are finding it difficult to achieve growth objectives.”
The market is more limited for certain buyers, including those with large employee concentrations and in the hospitality and trucking industries. Geographically, workers’ compensation rates in California remain among the highest in the country, but rates have fallen recently. And long-term trends in the state are encouraging, including indications that the landmark reforms introduced in 2012 by SB 863 are working.
In Florida, insurers are worried about rising claims and legal expenses following recent court decisions, which had previously contributed to double-digit rate increases in the state. But the frequency of lost-time workers’ compensation claims is declining, and the National Council on Compensation Insurance has filed for a 9.3% rate decrease in 2018 in Florida.
Meanwhile, innovations introduced by employers and medical providers are contributing to lower workers’ compensation and workplace safety program costs and better claims outcomes. For example:
- Exoskeletons and similar tools can allow for better movement by employees with spinal cord and other serious injuries, said Dr. Teresa Bartlett, a senior vice president with Sedgwick Claims Management Services. Exoskeletons could also have applications for uninjured workers — for example, to aid with lifting in health care, manufacturing, and other industries.
- The wearable technology marketplace is still in its infancy, but will likely become a key element of employers’ loss prevention strategies. Wearable devices can benefit employers by capturing data that can be used to anticipate or prevent losses and defend against questionable claims, said Rich Kennedy, US leader of the Workforce Strategies Practice in Marsh Risk Consulting. Wearable devices can also allow for geofencing to alert fellow employees and others when a worker enters a hazardous work area.
- Stem cell therapy is not widely used in workers’ compensation at this time, in large part because it is seen as an experimental form of treatment; no double blind clinical studies have been conducted yet to support the efficacy of the treatment. But advocates argue that stem cell therapy can benefit employers and injured workers because it is less costly than surgical intervention and typically carries shorter claims durations.
- A safety management system allows employers to take a more strategic and efficient approach to managing workplace safety. Many organizations have approached casualty loss prevention in a fragmented and inconsistent way, Kennedy said. Through a safety management system, a plan for which can be developed in as little as 30 to 60 days, an employer can better coordinate all efforts by risk management, environmental, health and safety, human resources, and other departments tasked with protecting employees and ensuring their well-being.
- A claims advocacy model entails being more collaborative, communicative, and transparent with injured workers as they go through the workers’ compensation claim process, Aronson said. By taking just a few simple steps, employers can ease the minds of injured workers, and demonstrate that they care about them and their recovery, and prevent relationships with those employees from becoming adversarial. Ultimately, that can lead to better outcomes for both employers and injured workers.
- A virtual approach to ergonomics can be a more efficient way to prevent or mitigate injuries related to bending, twisting, and other movement by employees in office settings. Rather than conducting onsite assessments, ergonomists can review and evaluate employee workstations using industry best practices via telephone, Kennedy said. In many cases, helpful adjustments can be made immediately, without the need for costly and time-consuming onsite evaluations.