Regardless of industry, the numbers make clear why a focus on fleet safety is necessary.
- According to the National Safety Council, medically consulted injuries in motor vehicle incidents totaled 4.6 million in 2016.
- Total motor vehicle injury costs—including wage and productivity losses, medical expenses, administrative expenses, motor-vehicle property damage, and employer costs—for the year were estimated at $416.2 billion.
- NCCI data shows that, by cause of injury, motor vehicle crashes resulted in the costliest lost-time workers’ compensation claims, averaging $73,559 per claim in 2015 and 2016.
For public entities, when it comes to managing the risks associated with fleets, these numbers are especially concerning. “Fleets are a serious and growing risk management challenge for public entities,” writes Susan Kostro in the Risk Management magazine article Managing Public Sector Auto Risks. “The public sector collectively has the largest vehicle fleet in the United States. With 1.3 million cars and trucks, that sector is even larger than the commercial fleet segment, according to Government Fleet magazine, so the challenges of commercial auto insurance have been particularly hard on public entities.”
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Risk management information system (RMIS) solutions have come a long way in the three decades since their introduction. As they improve, Michelle Kerr reports in a Risk & Insurance article, “[T]he way risk managers use them — and the way they influence the practice of risk management — continues to evolve.” This evolution has led many to rethink their concept of what the systems can do. “They’re looking at the broader picture of how RMIS can be used to transform their organizations,” Kerr notes.
Increased flexibility and the extended capabilities of cloud-based RMIS solutions are now expanding into areas far removed from typical risk management. The ability to quickly create challenge-solving solutions that leverage the power of a highly configurable RMIS can allow all parts of an organization to innovate. In the Kerr article, Brian Van Allsburg, vice president risk management with Compass Group puts it this way, “The question really — the sky’s the limit — what can we do with this system that would make us unique?”
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Searching for a critical email, multiple browser windows open, bills to review, reports to write, lawyer and medical professional consultations, voice messages that came in while on other calls. It’s all part of the daily routine for claims adjusters. Add outdated claims management software, disparate systems, and manual or paper-based processes to the mix and productivity can suffer. The work backs up. In some cases, the potential for burnout is all too real.
“Adjusters normally deal with a high volume of cases, and each case can be emotionally draining,” writes Katie Dwyer in the January 2018 Risk & Insurance article Improving the Claims Experience. “The customer on the other side is, after all, dealing with a loss and struggling to return to business as usual.”
“At some TPAs,” adds Dwyer, “adjuster turnover can exceed 25%.”
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Origami Risk’s 2018 User Conference, held last week, utilized a new format that not only placed a premium on client presentation of use cases, but also focused on digging into “how” presenters managed to implement their specific solutions. Listening to a diverse set of cases, several common trends emerged.
1. Transparency is key
Many of those presenting echoed the need to establish transparency and accountability in their processes. You can’t measure what you can’t see, and you can’t improve what you don’t measure. The most obvious culprits were paper-based procedures—everything from workplace safety “coaching cards,” to incident intake reports. Spreadsheet-centric workflows, such as data-heavy values collection efforts, also failed to identify the “who, what, when, and where” type of information required to make any process fully transparent.
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A good workers’ comp claim adjuster is a master of coordination. Managing 100-125 open claims certainly stands as proof. Yet, caseloads alone hardly tell the complete story.
For newly assigned claims, information must be collected from the employee, employer, and medical provider. Reserves must be established and reviewed for accuracy. There’s regular follow up with claimants, nurse case managers, attorneys, and other stakeholders. Compensability reviews. Evaluation of settlement opportunities. Mediations to attend. And that only begins to scratch the surface.
Yet according to the Accenture white paper “Claims at a Crossroads,” claims professionals can “spend nearly half their day on activities that do not impact the outcome of the claim.” While those administrative activities may be necessary components of the process, that time is better spent engaged in activities—such as those cited above—that fully leverage the adjuster’s talent and experience, keep claims moving on the path toward successful resolution, and increase the likelihood of outcomes that benefit both employee and employer.
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Trying to determine the value of enterprise risk management (ERM) is a difficult challenge. A quotation frequently attributed to Albert Einstein (although more likely originally said by sociologist William Bruce Cameron) gets to the crux of the issue: “Not everything that can be counted counts, and not everything that counts can be counted.”
Issues with measuring ERM value
Donna Galer, writing for the Insurance Thought Leadership blog, summarizes the reasons why the value of ERM programs are not easily quantified:
- It is extremely hard to know when a loss did not happen because of ERM.
- It is just as hard to quantify the cost of loss that did not happen.
- It is difficult to quantify the “soft” benefits of enhanced reputation because ERM is practiced or because of improved strategic alignment in the organization; ERM requires an understanding of the company’s strategic goals and objectives to identify the risks that might derail their achievement.
- It is often hard to justify the time and expense of measuring something that is not easy to measure.
Determining the objective value of a prevented loss or improved strategic alignment is highly problematic. Despite the very real value associated with those activities, determining a specific value without having an actuary assess probabilities and amounts seems extremely difficult. Not everything that counts can be counted.
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As discussed in previous posts, the manufacturing skills gap is a critical risk that demands effective risk management strategies. The real world impacts that can be felt from this risk include:
- Increased wage costs
- Production inefficiencies
- Increased workers’ compensation expenses
- Inability to meet customer demand and potential loss of market share
- Inability to expand
- Decreased R&D effectiveness
In addition to the skills gap, manufacturers face numerous other risks arising from factors that include new regulations, geopolitical shifts, supply chain vulnerabilities, and environmental impacts. Added on top of that are the traditional risks that face all industries such as market risk, disruptive competitors, technology obsolescence, and health/safety risks. Collectively, manufacturers must address a larger number of risks, that change more frequently, and are more interconnected than most industries.
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When it comes to describing the expertise of their employees, there’s very little difference in the way RMIS vendors present themselves. A quick review of provider websites proves it.
“…we strive to have the best talent in the industry on our team.”
“…an ideal blend of business knowledge and technology expertise.”
“…among the most experienced in the industry.”
“…unrivaled industry and technical knowledge…”
If every provider is equal in terms of service expertise, what explains results like these?
(Customer experience and NPS source: 2018 RMIS Report)
Are our competitors stretching the truth when claiming to have the most talented, experienced, and/or knowledgeable support team? Not exactly.
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The importance of establishing a near miss culture is clear. The OSHA and National Safety Council Alliance, a cooperative program, puts it this way: “History has shown repeatedly that most loss producing events (incidents), both serious and catastrophic, were preceded by warnings or near miss incidents. Recognizing and reporting near miss incidents can significantly improve worker safety and enhance an organization’s safety culture.” Effective near miss programs can prevent more serious incidents from occurring.
A previous post highlights some of the challenges surrounding this issue. Fear of reprisal or embarrassment, difficulty in the reporting process, and a sense of futility if reports don’t result in tangible changes. Each challenge presents obstacles when trying to establish a near miss culture.
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