NU Online News Service, April 12, 10:40 a.m.EDT

Risk managers seeking to control the cost of workers'compensation coverage can find an effective weapon by utilizingclaims data and performing analyses that will help them deal withthe most expensive claims.

In another of its ongoing discussions about risk, Marsh, theinsurance-brokerage arm for Marsh & McLennan Companies,presented a webinar titled “Controlling Workers' CompensationClaims Costs.”

Scott Robinson, principal of CS STARS, a provider of proprietaryrisk-management-technology tools, notes that when executives beginto pull apart the mounds of data available to them from currentclaims, they can identify cases that produce the most expense.

“It is the 80/20 rule: 20 percent of your claims are producing80 percent of your cost,” says Robinson.

By utilizing analytics, Robinson says risk managers can flagdown the high-cost claims in advance, put programs in place to dealwith these injuries, and save millions of dollars in theprocess.

Joyce Long, global workforce practice leader for Marsh RiskConsulting, a unit of Marsh, says an effective way to control costsis through an integrated approach that sets goals to reduceworkers' injuries and identifies the hazards that can causeinjuries.

She describes a program where management is taking theinitiative and finding ways to avoid injuries and make improvementswhere they need to be made before an accident takes place.

One example she gave dealt with ergonomics and musculoskeletalinjuries. She says research can identify where those injuries takeplace and develop “effective intervention” plans aimed at avoidingthe injury before a complaint arises.

As pressures on insurers mount, with the combination of risingcombined ratios and a soft market that stifles premium-rateincreases, Tracy Caffrey Ant, primary casualty placement leader,Marsh, says risk managers need to consider alternative-risktransfer-programs to hold down costs.

She says risk managers need to consider more than theirpremiums, but also captives and deductibles in an effort to controltheir cost of risk.

“The integrated approach makes sense to everyone,” says DavidAbbene, claims consulting practice leader, Marsh Risk Consulting.“Data is key,” he says, adding that risk managers need to “findthose metrics across their organizations that tie youtogether.”