LWCC Lauds Policyholder’s Dramatic Reduction in Loss Ratio

Louisiana Workers’ Compensation Corporation (LWCC) announced that one of its policyholders, Goodwill Industries of Southeastern Louisiana, has reduced its workers’ comp loss ratio from 232 percent to 14 percent over a seven-year period by implementing and enforcing a few vital workplace safety procedures.

The insurer said the dramatic cost control was achieved through teamwork by various professionals including Goodwill’s management team and staff, Goodwill’s insurance agency Eustis Insurance & Benefits, and LWCC’s team of professionals including those from underwriting, loss prevention, claims management, and occupational medicine.

“In the late 1980s, prior to LWCC writing the account, Goodwill Industries was in an assigned risk pool with an extremely high experience modifier (e-mod) and a $50,000 deductible per claim,” says Robert Swayze, executive vice president of Eustis Insurance & Benefits. The assigned risk pool is a mechanism that was established by individual states to make sure that employers could obtain workers’ compensation insurance even if insurance companies were not willing to write such coverage on a voluntary basis. Assigned risk plans in many states carry higher rates than the voluntary market.

Swayze, who was a member of the Goodwill board of directors from 1984 to 1987 and was familiar with the organization’s inner workings and safety record, urged Goodwill to form a safety committee and hire a safety director. The board was ultimately convinced of the long-term benefits of such a move. The safety committee, which ensures that all 30 Louisiana locations (including 11 retail outlets) are inspected quarterly, holds monthly meetings to review new or existing claims, discusses accident trends, analyzes injury severity and medical and indemnity costs, and formulates solutions for preventing future accidents.

LWCC’s relationship with Goodwill Industries began in 2000 under the leadership and dedication of Darren Kimball, LWCC senior loss prevention consultant; Ansel Bradford, LWCC senior claims representative; Janell West, LWCC medical case coordinator assigned to the Goodwill account from 2000 to 2005; and Catharine Miller, who assumed the role in 2005.

Goodwill Industries currently uses OMNET (LWCC’s statewide occupational medicine network), to help get injured employees to the doctor within 24 hours, which is critical in the return-to-work process. OMNET helps address problems quickly and helps get a handle on medical care.

“Since medical costs are one of the biggest components of workers’ compensation claims, LWCC encourages employers to provide light or transitional duty for injured workers, which saves in claims costs, minimizes lost workdays, and reduces medical expenses,” says Bruce Lambert, LWCC director of safety and loss prevention. “Studies have shown that in companies with return-to-work programs where transitional duty is offered, injured employees go back to work much sooner and recover much faster.”

Currently leading these efforts for Goodwill Industries of Southeastern Louisiana is Patricia Conrad, the former personnel-rehabilitation director for Goodwill from 1979 to 1984. She was rehired by Goodwill in 2004 as the safety director and continues to stress the importance of loss prevention, the necessity of establishing enforced safety programs, and the timely reporting of claims.

Conrad has implemented monthly safety visits, defensive driver training, and forklift training. She recently reinstated a successful daily incentive called “Safety Bingo” that encourages employees to think and act with safety in mind.

Each employee is given a bingo card. For each day no accident occurs, one dollar is added to a pool. If an accident occurs, five dollars is deducted. A bingo number is called every workday until there is a winner. The jackpot is a cash reward of $100 paid to the employee by check. A new game is started after a winner is declared. According to Conrad, “It has been an extremely popular, fun, and effective way to incentivize employees.”

According to David Posner, LWCC’s underwriting account executive assigned to the Goodwill account, “Once all of the elements were in place, and all of the members of the team were in synch, Goodwill’s experience modifier (e-mod) went from 1.63 when LWCC first wrote the account down to 1.01 even after the devastation of Hurricane Katrina to southeast Louisiana in 2005.”

Source: LWCC