The days of clipboard-wielding insurance inspectors methodically checking off safety hazards and violations in their clients' workplaces are becoming a thing of the past.

Today, leading workers' compensation carriers are focusing on creating safer, more productive workplaces by using their risk management consultants to cultivate long-term partnerships with policyholders. And it's about time.

Using a collaborative, rather than adversarial approach to safety and risk management practices benefits both the carrier and the policyholder. Together, they can create a true culture of safety in the workplace, improve productivity, and take a big step toward containing the cost of workers' comp premiums.

How? By taking a forward-thinking approach to risk management–through policyholder education, training and partnership.

Carriers and policyholders need to stop thinking in terms of “loss control” and start viewing the workplace through the lens of risk management. While this may appear to be a game of semantics, it's actually a fundamental shift in business philosophy that takes a more holistic view of safety.

Focusing on what's right in the workplace versus what's wrong opens the door for carriers to strengthen their policyholder relationships. This approach provides the opportunity for a carrier's safety consultants to work side by side with their clients to elevate safety awareness throughout the workplace.

It also expands the role of the consultant to one of educator and mentor, rather than a fault-finding inspector. Carriers that understand this are far better positioned to help their policyholders reduce loss exposures, while building trust and loyalty in the process.

In this new paradigm, the client is far more engaged in their safety program, including 100 percent buy-in from the top of the organization. It begins with the owner, president or chief executive officer and extends across the entire employee population.

A carrier-policyholder relationship based on collaboration is better able to nurture a true understanding and appreciation for safety in the workplace.

When loss exposures or accident trends are identified, the carrier's risk consultant works in concert with the policyholder to develop and implement appropriate risk management solutions. This may include physical improvements in the workplace, on-site manager training, or employee education on best safety practices that can be applied across the organization.

The risk management consultant also ensures the policyholder is educated about state and federal safety regulations applicable to their specific industry.

Policyholders benefit when they learn how to administer their own risk management programs, rather than relying on a carrier's “inspection.” And for the carrier, coaching, educating and mentoring policyholders paves the way to long-term and profitable customer relationships.

The risk management approach to providing workers' comp service places greater emphasis on pre-survey loss frequency trending and root cause analysis. This leads to greater impact on a company's profitability than a typical insurance “loss-control inspection.”

Working together to reduce losses and create a safety culture helps lower claims costs and experience modification factors, and adds up to premium savings.

When the frequency of workers' comp claims declines, it directly impacts the experience modification factor, or “X-Mod”–a key component used in calculating a workers' comp premium.

For example, an employer in the manufacturing industry had an average of 44 claims a year and an X-Mod of 131 percent, resulting in a $1 million annual workers' comp premium.

Several years after successfully implementing a comprehensive risk management plan, the company's number of annual claims had fallen to 20 a year and the X-Mod declined to 93 percent. Along with schedule rating adjustments, this X-Mod reduction lowered the policyholder's premium to $432,000.

The employer had reached a point where it saved more than a half-a-million dollars in its annual premium.

While not everyone will see this level of savings, large employers can save hundreds of thousands of dollars. Even smaller companies can benefit, as yearly premium savings enable them to be more competitive, especially in today's challenging business environment.

Carriers that champion innovative risk management will see their policyholders make systemic changes that enhance workplace safety and drive behavioral change across the organization. These carriers often provide a variety of tools and resources that help policyholders take ownership of their safety culture.

Tools include software programs that help a company's safety director track certificates of insurance, along with material safety data sheets, injury trends and employee training. Ultimately, such service offers help reduce workplace injuries and boost productivity and morale among employees.

Another driver of innovative risk management is the use of predictive analytics. Once viewed as a secret formula beyond the grasp of many, actuarial data is now being used by leading carriers to develop predictive loss metrics for the workplace.

As this practice matures, carriers and their clients will continue to realize big benefits. Insurers and their safety consultants will be better equipped to anticipate claims frequency and fine-tune pricing, while policyholders' safety managers will gain powerful new data to more effectively predict and monitor problems in the workplace.

As workers' comp carriers and their clients become stronger risk management partners, genuine culture change occurs, benefitting both parties.

The most successful programs reflect total buy-in from a company's top management, while line employees recognize authenticity and are motivated by it. When frontline workers know their CEO accepts nothing less than a zero-accident attitude, they internalize the safety culture and act quickly to eliminate or mitigate unsafe acts or conditions at every level that could threaten the team.

Building a culture of safety has a profound impact on employee morale and company profitability. Yet in the end, its most important impact is on the workplace itself–where employees can be their most productive, arriving each day to a safe and healthy work environment.

Tom Jolliff is director of risk management for the workers' compensation line of business at ICW Group Insurance Companies in San Diego, Calif., a super-regional insurer representing a group of multiline property and casualty insurance carriers providing workers' comp, surety, earthquake and auto coverage.

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