Transcript Document
Annual Meeting
January 15, 2008
Ag Insurance
Myth, Reality & the Future
Presented by:
David Stiltz
Scott Aukes
I. Myth
Quoting my insurance every year is the
best way to control insurance costs.
Maintain profit margins
Insurance is an expense
Let insurance agents duke it out
Reality
Information provided
Pricing
Coverage
Service
Timing
Future
Insurance is a tool not a product.
Buy it like a tool.
Cost-benefit analysis
Risk
Property
Loss of Income
Human – Your employees
Liability
Future (continued)
How do you evaluate risk
Avoid it
Prevent it
Retain it
Transfer
Combination of any of the above
Future (continued)
Implement a strategy
What is your current program?
Who designed it?
Will it stand the test of a significant claim?
Side Note:
MAINTAIN
YOUR STOCK VALUES
II. Myth
I have a safety program. It’s right there
on the shelf.
Government Regulations
Insurance makes me do it
I value my employees and my company
Reality
A solid safety program is worth the
most when insurance is at its worst.
“Soft” Market Conditions
Lower prices
Highly competitive
Insurance companies take more risk
Safety component – Not as stringent
“Hard” Market Conditions
Increased pricing
Selective
Insurance companies not willing to take risks
Safety component – Very stringent
The insurance company will
do it
Eyes and ears of the underwriter
Not enough manpower
Territory size will not allow it
Not cost effective
Not on site every day
Great programs – use them
Compliance Provider will take
care of it
Provide a great service
Menu driven
Not on site every day
Future – Develop and Maintain a
Quality Safety Program
Hidden costs
Control frequency & severity
Protect your assets
Protect marketability
Establish Safety Goals
Safety rules or safety suggestions?
Same Fingers / Toes / Eyes / General Health
Unsafe acts versus unsafe conditions
Influence employee decisions
Top down management
Who is responsible for productivity and
profitability?
III. Myth
My work comp mod is “something” I get a
notice on once a year and it is a measurement
of how my losses have been. I have no more
control over it then the rate of my taxes.
The Work Comp Mod Myth
Experience Modification is designed to
measure whether your company’s workers’
compensation losses (experience) is better
or worse than average
Fairness versus responsibility
Basic Mod Formula = “Your company’s losses /
Average company’s losses”
Reality
National Council on Compensation Insurance
(NCCI) mails you a copy of your “Experience
Modification Worksheet” once a year.
Provides insight
Benchmark
Experience Rating Report
Experience Rating Report
Future
Manage Your Mod
Remember – 1.00 Mod is “average”
IV. Myth
The insurance company / independent
auditor determines my workers’
compensation audit.
Reality
You can control your audit
Understand the rules
Know & understand class codes
Division of payroll. Is your computer system set
up to handle it?
Control the audit
V. Myth
I’ll turn the claim over to the insurance
company and let them handle it. It’s their
money, they will manage it well.
Reality
It’s your premium dollar
Insurance company motivation
It’s your property
It’s your customer
It’s your loss ratio
Reality
Unreimbursed costs
Employee “down time”
Reputation
Retraining costs
Paperwork
Scheduling changes
Future
Take an active part in the claim process
Post Accident Management
Effective Return to Work Program
Emphasizes the value of the employees
Lower dollars spent on a claim
“Oprah Syndrome”
Light duty means a pay scale equal to the job
performed.
Conclusion
It’s your insurance program. Manage it.
Safety Management is essential, short term and long
term.
Manage your workers’ compensation program.
Claims, Experience Mod, & Audit
Conclusion
Take an active role in managing your claims. It’s
your money; make sure it is being used effectively.
Buyer of the future will analyze his risks and
understand that hidden costs can be more
detrimental than the premium dollar amount paid to
the insurance company
Have you ever said it seems
like we are working harder
and harder just to maintain?
Sometimes we don’t measure
all the activities that make up
our day.
Thank You!