Workers Compensation Claims Frequency

Workers Compensation Claim Frequency Down again NCCI, 2005... 

A 2005 National Council on Compensation Insurance (NCCI) research brief titled Workers Compensation Claim Frequency down Again (2005), states that there has been a larger decline in the frequency of smaller lost-time claims than in the frequency of larger lost-time claims. That runs contrary to the Heinrichean premise that achieving frequency reduction will produce an equivalent reduction in serious injuries. 

In the August 2011 NCCI Research Brief titled Workers Compensation Claims Frequency NCCI says that from 2005 through 2009, after accounting for wage and medical cost inflation, claims below 50,000 exhibited a greater rate of decline than those above 50,000 (Table 8.2). 

The data in Table 8.2 is in concert, generally, with the trending previously shown for the years 1999 through 2003 in Table 8.1. Reductions in less serious injuries are down substantially more than that for more serious injuries. In the August 2011 NCCI Research Brief, NCCI also says that workers compensation claim frequency for lost-time claims has increased 3% in 2010. This represents the first increase since 1997 and only the third time that frequency has increased in the last 20 years. This upward claim frequency trend for lost time cases is relative to the increase in fatalities for 2010 as shown in Table 8.3. 

Workers Compensation Claims Frequency. NCCI Research Brief, August 2011. Also at https //www.ncci.com/documents/2011 Claim Freq Research. pdf. 

Data on the trending of serious injuries and workers compensation claims contradict the premise that focusing on incident frequency reduction will achieve equivalent severity reduction. The following data have been extracted from publications of the National Council on Compensation Insurance (NCCI). A July 2009 NCCI bulletin is titled Workers Compensation Claim Frequency Continues Its Decline in 2008. The reduction was 4.0 percent. A May 2010 NCCI report says that the cumulative reduction in claims frequency from 1991 through 2008 is 54.7 percent. 

NCCI. Workers Compensation Claim Frequency Down Again in 2005. National Council on Compensation Insurance,2006. Available at http //www.ncci.com/ documents/research-brief-august06.pdf. 

Frequency and severity data from accidents can help identify risks. A review of accident records and classes of accidents can help. Various statistical methods applied to accident data can reveal trends in losses and factors that contribute to accidents and injuries. Analyzing claims, such as worker compensation claims or customer claims against products, will help isolate factors associated with losses. 

BLS data on lost worktime injuries and illnesses track well with the NCCI reports. If you enter Remarkable Story of Declining Frequency—Down 30% in the Past Decade into any search engine, you will get many results linking to a 12-minute video prepared by the NCCI. That video shows the frequency of workers compensation claim is down considerably, not only in the United States but also in several industrialized countries. 

Frequency of reviews should be determined based on several factors— for example, the results from previous reviews, previous self-assessments, safety performance as measured by OSHA Incidence Rate (OIR), Lost Workday Incidence Rate (IWDIR), Workers Compensation Claims... 

This study goes beyond much of the earlier research and— following the approach of Hunt and Habeck (1993) and Hunt et al. (1993)—seeks to estimate the role of HRM practices in the determination of workers compensation costs in a multivariate framework. It uses a workplace safety model that incorporates a wider variety of HRM practices than has been previously employed. In particular, it analyzes the impact of the three important dimensions of HRM practices on safety employee participation in decision making, employee participation in financial returns, and the firm s management safety culture. In addition, this is the first study to consider file effect of each of these factors on claim frequency and claim severity, and to ask whether any observed change is file result of changes in technical efficiency or moral hazard (principal-agent) incentives. 

Following this procedure, we merge firm-level data from the survey to claimant-level data from Miimesota s workers compensation files at the Department of Labor and Industry. Since costs are the product of claim fi equency, claim duration, and benefits, we partition our statistical analysis into claim frequency and claim duration components to see whether the HRM practices affect claim fi equency, claim duration, or both. This will provide evidence about whether costs are reduced either because of loss prevention effects (in that a particular practice reduces the number of claims) or loss control effects (in that a particular practice limits the costs of those injuries that have occurred). We assume that the benefit parameters (maximum and minimum benefits) are exogenous relative to the choices made by the firms in our survey and do not model benefit determination here. 

Some insurance companies have business opportunities that insure employers and others against accidents and incidents involving people, property and the environment. A significant kind of insurance is workers compensation, discussed in Chapter 6. To reduce claims, insurance companies created services to help their clients reduce accidents and incidents leading to claims, this is called loss control. The fimction involves studying the frequency and severity of claims and how they came about. Loss control specialists use the results to advise clients on ways to avoid those events. The professional organization is the Insurance Loss Control Association (ILCA). 

Although the frequency of workers compensation cases is down, the greatest reductions are in lower-cost claims. The reduction for cases valued at over 50,000 is about one-fifth of that for cases valued at less than 2,000. Thus, costly... 

One useful step in making decisions about OHS in a particular workplace is to compare the data on work-related injury and disease in that workplace with national, state, province, territory figures for occupations in that workplace and for similar types of industry. This can give an idea of the types of workers most at risk, and the types of occmrences which need to be addressed first. It allows you to benchmark yoiu workplace against other similar ones. For your particular workplace, it is possible to ask your compensation insiuer for a breakdown of injury types, injmy severity, injirry frequency rates, injury duration, and claims costs, and relate these to particular sections or parts of your workplace. 

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