Workers' compensation insurers and others need to stay focused on reform to hold down costs and improve operations, an insurance executive recently told an industry conference in Orlando, Fla.

That advice came from Vincent Donnelly, president and chief executive officer of PMA Capital Corp. and PMA Insurance Group of Blue Bell, Pa., speaking at the Annual Workers' Compensation Educational Conference, a partnership of the Florida Workers' Compensation Institute and The National Underwriter Company. Donnelly said a proactive approach is needed to deal with rising medical costs, an aging work force, decisions made by an active judiciary, and the impact of terrorism.

On the issue of rising medical costs, he noted that 60 percent of every comp claim dollar now goes to medical -- the cost of getting the injured back to work. Donnelly said that over the past 10 years the average claim cost has inflated by 112 percent. This amount, he pointed out, was higher than the increase in gasoline prices during the same period.

"There are opportunities for insurers to influence and contain medical cost," he said, such as medical providers offering treatment without focusing on defensive medicine.

He praised reforms made in California and Florida comp programs, which he said have taken costs out of the system. Donnelly noted, however, that the best reforms are often challenged in the courts, and that judicial rulings that arise can have unintended consequences.

This article originally appeared in The National Underwriter P&C. For the complete article, please click here.

Special Reports /

Keep Focus On Comp Reform, Exec Urges

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