Idaho Agent Knows Job Safety Training and Employee Communication Pay Off

The best way insurance agents can teach employers about workers’ compensation is to get to know their business.

Idaho insurance agent Doug Nielsen vividly remembers the moment he realized the importance of job safety training. It was right after he saw the blood and heard the scream of an employee who suffered a horrible arm injury in a printing press – and then realized he was at fault.

“I was working for a printing company and one of my jobs was to train people to work on the presses,” Nielsen recalls. “A worker suffered a serious broken arm that left him permanently partially disabled, and to this day I feel it was because I didn’t train him properly. I realized at that moment the importance of workplace training, and that I was going to do everything I could to help employers recognize its importance, and how by doing so they could control their workers’ compensation costs.”

To do this, Nielsen has built upon two important components from his background: working in an industrial environment (including 15 years in the commercial printing business) and his teaching degree from Brigham Young University. In just seven years he has become accredited by both the Idaho Industrial Commission and a national organization, the Asheville, N.C.-based Institute of WorkComp Professionals (IWCP).

An insurance agent for Archibald Insurance Center in Rexburg, Idaho, Nielsen says that while training is important to reducing injuries, also important are effective hiring, good employee relationships, and being aware of the overall health of the employees, as in the case of diabetes and obesity. So he helps educate employers on the processes taught at IWCP, including how injury costs can be controlled by the timely reporting of injuries, how to implement proper medical treatment and how to establish a strong return-to-work program.

“Most employers don’t understand workers’ compensation. As a matter of fact, even most insurance professionals aren’t that knowledgeable,” Nielsen said. “So the problem is that nobody teaches the employers about it. Subsequently, they don’t realize there are ways to control workers’ compensation costs.”

Nielsen said the best way insurance agents can teach employers about workers’ compensation is to get to know their business. “I like to walk the floor, get familiar with the operation and review the claims history,” he said. “If I walk through an assisted living center and find that back strains are common claims, right away I think of wellness and training programs to help avoid them.”

From 1991 to 1996, the annual change in indemnity claims costs was 1.2 percent, according to the National Council on Compensation Insurance Inc. However, from 1997 to 2005, that number increased dramatically to 6.6 percent. The result: Workers’ compensation indemnity severity is once again outpacing wage inflation. This is part of the reason, Nielsen said, that it’s more important now than ever to make sure companies are aware of the ways to get injured employees back to work as soon as possible.

“After 12 weeks out on an injury, only 50 percent of those employees will come back on the job,” he said of what he calls the “12-week window.”

Consequently, it’s important that the employer stay in communication with the injured employee, so that the employee knows the company cares about the injury and wants the person back on the job as quickly as possible.

Nielsen cited as an example a large retail chain in Idaho whose premium was high because of an open claim on a back injury. By educating the company’s safety director on how to work with the claims adjuster and close the claim expeditiously, adjustments were made that resulted in a $60,000 savings to the client.

Nielsen’s work has also kept companies from seeing their experience modification factor skyrocket. He cites a large retail operation with an ex-mod of .99 and a loss ratio over four years of 79 percent.

“In the six months that I have been working with this company, they have seen an annualized loss ratio of 9 percent,” Nielsen said. “If this holds for three years, which I believe it will, the experience mod will be down somewhere around .54, which will save the [company] approximately $97,000 a year on its premium.”

Closing the Window

Nielsen points out that workplace safety has become infinitely better since his days in the printing industry, thanks in large part to the Occupational Safety and Health Administration (OSHA). But the rising cost of claims makes it imperative that employers have a plan to reduce workers’ comp claims costs.

“The focus has to be on closing that ’12-week window’ as quickly as possible,” Nielsen said. “And that starts from the timely reporting of an injury, to receiving the proper medical treatment, preferably from a physician trained in occupational medicine, to establishing an effective return-to-work program.”

Nielsen now has 700 business prospects, and he keeps in touch with each one five times per year. He gets his safety message across by not overwhelming the employer with too many facts at one time.

“I have an inch-and-a-half-wide binder of what every company should know to keep their employees safe and their workers’ comp costs down,” Nielsen said. “But I don’t give them the whole book at once, because it’s too overwhelming, and I know they won’t read it. Instead, I e-mail it to them piece by piece, making sure they have the information they need, when they need it.”

Idaho, like every other state, has been battered by a tough economy. Still, Nielsen said in some ways, this has worked to make employers more conscious of their expenses.

“The slow economy has made employers more aware of what they are paying in insurance costs,” he said. “When things were better, companies were so busy making money they didn’t blink twice if $5,000 was added onto their premium. Now, they are looking to save money wherever they can, and that $5,000 or $10,000 takes on a greater importance for them. They can’t afford to see that money go out the door, and it’s my job to make sure it doesn’t.”

Knowing that most insurance agents either deal with health insurance or home, auto and farm insurance, Nielsen has set up Work Comp Solutions as a division of Archibald Insurance Center, and has successfully carved out his niche by never talking to employers about insurance.

“My expertise is workers’ compensation,” Nielsen asserted. “It’s what I am really good at, so there’s no sense in talking about anything else. I’m just a ‘blue-collar’ person, which means my heart has always been with the employees.”