Innovation Key to Comp Quandary

The workers’ compensation system — the country’s largest line of commercial insurance — is in crisis, as contributing writer Tom Slattery points out in his excellent overview of where comp has gone in the last year. Yes, the line’s combined ratio in 2002 improved slightly to 112.2, but the troubles are far from over.
As Slattery points out, loss costs are still going up in spite of reforms passed around the country in an attempt to rein them in. Prices have gone up accordingly. While reforming the system remains crucial, innovations in claims, medical monitoring and return-to-work are crucial ingredients in the effort to straighten things out.

One such innovator is Deerfield, Ill.-based LewisCo’s re-employment services unit, the Workers Transition Network. As reported on page 38, WTN partners injured workers with nonprofit organizations like the YMCA to help those who are temporarily injured return to work more quickly, and reduce indemnity costs associated with workers who have permanent medical restrictions on the kind of work they can do.

This is aimed at reducing costs to employers and insurers, getting employees back into the workflow — hopefully leading to genuine full-time re-employment — and can serve as useful publicity while helping out in the local community. It seems to be fool-proof.
But even given WTN’s innovation, the law is a factor. While its interim employment services program is available to employers and insurers in all 50 states, its re-employment services component is practical only in the 15 states that mandate vocational rehabilitation. Without the ability to force injured workers to choose between their benefits and the program, the re-employment portion loses its effectiveness.

That said, there are many other innovators listed in this issue’s workers’ compensation directory, regardless of the risk you’re trying to insure. Also in this issue, East Managing Editor Charles Boyle asks whether lawyers really are the bogeymen the insurance industry makes them out to be. In Parting Shots, Janett Kearbey has some ideas on what to look for when selecting an insurance partner for workers’ compensation risks.

Of course, Insurance Journal Midwest’s coverage of workers’ compensation — the third-largest line of property/casualty insurance overall — is not limited to this issue. We have several stories lined up for upcoming issues about comp insurers and service providers — some old hands and some new faces.
In the meantime, please give me a call in my Chicago office, (773) 381-1572, anytime you’d like to chat about workers’ compensation or anything else that’s giving you a headache.

Thanks for reading!