Transcript Document

Annual Meeting
January 15, 2008
Ag Insurance
Myth, Reality & the Future
Presented by:
David Stiltz
Scott Aukes
I. Myth
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Quoting my insurance every year is the
best way to control insurance costs.
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Maintain profit margins
Insurance is an expense
Let insurance agents duke it out
Reality
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Information provided
Pricing
Coverage
Service
Timing
Future
Insurance is a tool not a product.
Buy it like a tool.
 Cost-benefit analysis
 Risk
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Property
 Loss of Income
 Human – Your employees
 Liability
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Future (continued)
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How do you evaluate risk
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Avoid it
Prevent it
Retain it
Transfer
Combination of any of the above
Future (continued)
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Implement a strategy
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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
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I have a safety program. It’s right there
on the shelf.
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Government Regulations
Insurance makes me do it
I value my employees and my company
Reality
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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
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“Hard” Market Conditions
Increased pricing
 Selective
 Insurance companies not willing to take risks
 Safety component – Very stringent
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The insurance company will
do it
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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
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Future – Develop and Maintain a
Quality Safety Program
Hidden costs
 Control frequency & severity
 Protect your assets
 Protect marketability
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Establish Safety Goals
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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”
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Reality
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National Council on Compensation Insurance
(NCCI) mails you a copy of your “Experience
Modification Worksheet” once a year.
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Provides insight
Benchmark
Experience Rating Report
Experience Rating Report
Future
Manage Your Mod
 Remember – 1.00 Mod is “average”
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IV. Myth
 The insurance company / independent
auditor determines my workers’
compensation audit.
Reality
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You can control your audit
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Understand the rules
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Know & understand class codes
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Division of payroll. Is your computer system set
up to handle it?
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Control the audit
V. Myth
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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
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It’s your premium dollar
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Insurance company motivation
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It’s your property
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It’s your customer
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It’s your loss ratio
Reality
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Unreimbursed costs
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Employee “down time”
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Reputation
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Retraining costs
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Paperwork
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Scheduling changes
Future
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Take an active part in the claim process
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Post Accident Management
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Effective Return to Work Program
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Emphasizes the value of the employees
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Lower dollars spent on a claim
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“Oprah Syndrome”
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Light duty means a pay scale equal to the job
performed.
Conclusion
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It’s your insurance program. Manage it.
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Safety Management is essential, short term and long
term.
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Manage your workers’ compensation program.
Claims, Experience Mod, & Audit
Conclusion
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Take an active role in managing your claims. It’s
your money; make sure it is being used effectively.
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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!