Press Room
Explore expert articles on workplace wellness, workers' compensation, and fraud prevention, with actionable strategies to lower insurance premiums and reduce overall costs. Gain insights to create a safer, healthier workplace while optimizing your risk profile for better insurance rates.
Culture Issues: Having a Good Culture is More Than Being OSHA & HR Compliant
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Insurance & Risk Advisor
Businesses always strive to improve, but unless you know what the problem is, you can't truly fix it, _and if you don't truly fix it your improvement is nothing more than blind surgery. Let's take for example your experience modifier, which is one of the biggest drivers of an employer's workers' compensation premium. The lower your experience modifier is the lower your premium will be.
Your experience modifier is based on your data, total claim dollars and audited payroll amounts over a three-year period. Unfortunately, most insurance agents will come to you and say, "You have a 0.94 experience modifier. That is great. You are getting credit it of 6 percent for a great loss history." In other words, your company is making money. Therefore, you must be stressing to your employees to be job safety conscious. But that's not automatically the case.
Culture Issues: Accountability When it Comes to Job Performance
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division
Accountability in the business world should not just be top down; everyone must know they are being held accountable for their actions. But whereas dropping a ball might lose a game, not being accountable on the job can result in an employee losing a finger, a hand, or a life. Not being accountable on the job can result in losing employees as they walk out the door as your better employees become frustrated by others that spend too much time socializing or not following procedures which makes things difficult for others.
But what exactly does accountability mean? A recent visit to an employer brought this question to the forefront. The owner boasted that they have a “culture of accountability”, but later complained about employee turnover and not finding employees that can “actually work”.
Workplace Wellness E Programs the Key to T Cutting Insurance Costs
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — January 2020
According to numerous studies, healthier employees lead to lower premiums. And if employers can make their employees healthier without cutting benefits or shifting more premium costs to their employees, is there a downside? After all, Fortune 1000 companies have been using wellness to combat rising health care costs for years.
According to a Duke University study, the cost of obesity among full-time employees is estimated to be $73.1 billion. As a result of health problems linked to obesity, lost job productivity could be more costly than medical expenditures. The report recommended that employers promote healthy foods in the workplace, encourage a culture of wellness from the CEO on down, and provide economic and other incentives to employees who show signs of improvement.
Workers’ Compensation: Current Legal Cases & News
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Insurance & Risk Advisor — May 2019
The following is an overview of some recent court cases and news that could affect boroughs’ workers’ compensation rates:
Protz Case- A July 2017 case upended the insurance industry when it eliminated a portion of workers’ compensation law regarding temporary or permanent disability. It resulted in the PA Compensation Rating Bureau (PCRB) increasing workers’ compensation insurance rates in February 2018 by 6.06 percent as well as impacting future claims by allowing more injured employees to receive permanent versus temporary benefits.
In response to the PCRB rate increase, the legislature passed a new law in the fall of 2018 that established a new threshold for permanent disability. The PCRB reduced the rates by 5.24 percent on Jan. 1.
The Formula for Reducing Workers' Compensation Costs: Eliminate the Errors and Overcharges
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — August 2018
Whether a borough is insured in a trust or by an insurance company, the experience modifier is one of the biggest drivers of its workers’ compensation premium. The lower the experience modifier, the lower the premium will be.
An experience modifier is based on a borough’s data, total claim dollars, and audited payroll amounts over a three-year period. This data gets reported to the workers’ compensation rating bureau or to the trust’s actuary. The borough’s data is then compared it to other municipalities’.
If the actual claim costs meet expectations, the borough earns an average grade, which is a 1.00 experience modifier. If the borough is better than average, a credit modifier (e.g., 0.91) is received, and for worse than average, a surcharged modifier (e.g., 1.26) is given.
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — May 2018
Just because it’s signed, doesn’t mean it’s insurable. Risk transfer is making sure the risk ends up on somebody else’s lap should an injury, fire or some other mishap occur during construction.
Risk should flow downhill, like a vertical relay race where the baton of risk is passed off from the general contractor to the subcontractor to all the other workers down the construction food chain. If the general contractor hires a subcontractor, and that subcontractor’s worker drops a pipe, causing an injury, the GC wants to make sure that injury liability doesn’t swim upstream like a salmon. Subsequently, the subcontractor is going to try to pass the insurance baton off to the injured worker’s insurance company further downstream.
The Right Prescription for Resolving Workers' Comp Claims Quickly
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — January 23, 2018
It’s frustrating for any employer, particularly one who understands the value of an early return-to-work process, to deal with a doctor that does not encourage employees to go back to work as soon as possible. And it’s a major reason injury costs are escalating.
The National Council of Compensation Insurance (NCCI) has tracked workers’ compensation costs for decades. Its studies reveal a significant change in how the costs line up. For example, in 1987, medical costs represented 46 percent of all injury costs and indemnity (wages) payments were 54 percent. By 1997, just 10 years later, medical costs were 53 percent compared to wages at 47 percent. In 2007, medical costs increased to 59 percent while wages were 41 percent.
The Impact of Opioids on Workers' Comp
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — October 2017
A 16th-century philosopher once observed that on many occasions “the remedy is worse than the disease.” And this would seem to be the case, when narcotics are prescribed to treat workplace injuries and that “cure” becomes the addictive problem.
In all, about 2.8 million private-industry workers and 752,000 public-sector employees suffered nonfatal workplace injuries in 2015, more than half resulting in time away from work, according to the most recent figures from the federal Bureau of Labor Statistics. But that only tells half the story.
The Importance of Safe Behavior (Cannot Be Stressed Enough)
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — June 15, 2017
Although OSHA-compliant, many employers continue to have injured employees. DuPont demonstrated this point through a study of over 40,000 injuries, where it was revealed that unsafe actions caused over 80 percent of injuries. This illustrates that in order to reduce injuries, you need to improve your safety culture.
When Paul O’Neill was about to step into the role of CEO at Alcoa, financial experts expected Alcoa to announce an aggressive expansion. They were shocked when the first announcement O’Neill made was that he planned to overhaul the company’s safety program.
Although Alcoa’s program was already considered excellent, O’Neill believed it could be improved. He understood that safety touches every employee in the organization, top to bottom, no matter what position they hold. This is where he wanted to start to change the culture of the organization; to make it a better-performing, better-behaving organization.
Five Things That Drive Up Workers’ Comp Premiums
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — May 2017
There are numerous factors that can give you sticker shock when you see your workers’ compensa-tion premiums, and none of them good. But they can be, for the most part, manageable – if you know what they are.
1. Poor Hiring and Training
A lot of problems can be traced back to the hiring phase, which is where many employers first drop the ball. It’s important to have a detailed job description that spells out the physical require-ments of the job. Many times, employees re-injure “pre-exist-ing” ailments because they do not know the full scope of what the job entails and, unfortunate-ly, these are covered by workers’ compensation. You can even go a step further and have a doctor conduct a fit-for-duty physical as a doctor is less likely to “approve” a person who physically cannot perform the job.
Trends in Alternative Risk Financing
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — November 2016
Alternative risk financing is when a business does not purchase traditional, guaranteed-cost insurance policies but instead purchases insurance where it takes on some risk for potential rewards. There are more insurance premiums invested by businesses in the alternative risk financing market than you might realize, with the use of captives being the most popular of the alternative risk financing programs used.
A September 2006 report by Con-ning Research & Consulting found that alternative market mechanisms covered about 30 percent of the U.S. commercial insurance market. Since that report, the alternative market percentage had continued to grow rapidly. According to various insurance industry reports, there were approximately 35 percent more captives in 2014 than in 2006. Why is it that alternative risk financing is so popular?
Is the ACA Impacting Workers' Compensation Claims?
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — December 2016
The U.S. Department of Health and Human Services (DHHS) reports that the physician supply will increase by only 7 percent by 2020, and starting in 2015, the estimated doctor shortage will be about 63,000. By 2025, the shortage could be as high as 131,000, primarily due to ad-ditional users coming into the healthcare system.
The DHHS reports that this collision of care needs and the shortage of both primary care and specialist physicians could greatly impact the delivery of healthcare in the workers’ com-pensation marketplace. The end game is as healthcare costs, and especially deductibles, rise for individuals, and doctors find themselves conflicted over where they can be better compensated, we may very well see a rise in fraudulent claims.
The Right Prescription for Lowering Workers' Comp Costs
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — June 2016
Let’s face it. Navigating the work-ers’ compensation process can be painful for both the employee and the manager. If an employ-ee is injured on the job and is making a workers’ compensation claim, he or she must be medi-cally evaluated by a doctor who will determine if they can return to work, stay home, or return to work with modified duty. The process can be more frustrating if you do not work with a doctor who understands this process.
The National Council of Com-pensation Insurance (NCCI) has been tracking workers’ compen-sation costs for decades. And what those studies reveal is a significant change in how the costs line up. For example, in 1987, medical costs represented 46 percent of all injury costs and indemnity (wages) payments were 54 percent. Fast forward to 1997, and medical costs were 53 percent compared to wages at 47 percent. In 2007, medical costs went up to a whopping 59 percent while wages reduced to 41 percent.
Improve Your Risk Profile and Improve Your Bottom Line
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — January 2016
Over the past 20 years, I would guess that I have talked with or interviewed close to 1,200 corporate executives. At some point in our discussions, I always ask the same question: “Would you agree or disagree that your premium is based on the insurance company’s perception of your risk?” Without a doubt, everyone agrees. I then ask them, “What does your risk profile look like? Is it becoming worse, staying status quo, or improving?” They almost always answer, “I have no idea.”
Not knowing your risk profile is like trying to defend a fort from attack without knowing which walls are the weakest and most vulnerable. Without that knowledge, you have no idea where improvement is needed.
When you improve your risk profile and reduce your risks, you improve your safety, which in turn reduces your claims, and ultimately drives down your rates. However, you have to remember that everything revolves around the underwriter’s perception of your risk profile.
Don't Let a Good Employee Go Bad
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — November 2015
“How can I stop hiring problem employees?”
This is a common question, and one that you might ask when a workers’ compensation claim “goes bad” and you never saw it coming.
Frustration does not begin to describe your feelings. You go through all of the necessary steps to find the ideal employee: one who has the skills, education, focus, and attitude to be able to complete his job safely and with high efficiency. You believe he is going to understand his job duties, that he is responsible, and that he can accomplish his duties without constant super-vision. You feel like you’ve just won the HR lottery…until you realize you have misread one of the numbers on the ticket.
You look back and try to figure out where it all went wrong. It still looks like the candidate passed all of your tests. He looked like the perfect fit, but something went wrong.
Most likely, you threw him to the wolves too soon. Many good hires go bad simply because the company did not conduct a proper orientation to indoctrinate the employee into its safety culture immediately. The steps are simple.
Turning Your Safety Culture Into a Profit Center
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — September 2015
Many employers view safety as an expense. However, companies large and small have proven that a change in safety culture can lead to increased profitability.
Face it: your employees are the engine that powers your company, much like an engine powers a race car. If you have a well-maintained, high-performance team, they can endure challenges and go the distance while achieving victory for you. In terms of business, they can help you stay ahead of your competition and create an enduring, profitable company. They allow you to open the throttle and GO!
Prequalifying Your Business Can be Money in the Bank
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — March 2011
The experience modification Factor and its link to creating a competitive advantage in the marketplace is easy to overlook, since employers tend to be somewhat uninformed when it comes to workers' compensation. Although it certainly is a significant employee benefit on one hand, it also is a powerful business benchmark that is carefully scrutinized by those who are evaluating possible business partners.
The Workers’ Comp Perfect Storm Perfect Storm – Akron OH Business
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — May 2012
Companies must convey to underwriters that they have a better risk profile today than yesterday.
Hang onto your wallets. Employers are already seeing the trip of a very nasty iceberg as the insurance industry feels itself reelin' and rockin' on a number of different fronts, all adding up to the "Perfect Storm."
Predictive Modeling: a Pro-Active Approach to Managing Workers’ Compensation Costs
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — June 2008
While Workers' Compensation Managed Care is widely viewed as a means of controlling expenses, the results are sometimes quite different from what is expected. In fact, in many cases the consequences are not only unintended but also undesirable and costly to employers.
Predictive Modeling: a Pro-Active Approach to Managing Workers’ Compensation Costs
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — June 2006
The number of on-the-job injuries continues to decline; yet the total cost of workplace injuries continues to escalate. The paradox of fewer injuries and greater costs continues to baffle employers and professionals in the insurance industry.
Insurance professionals, employers, and business leaders are aware of the following conditions that drive up Workers’ Compensation injury costs.
Employers, You’re Paying The Bill…Control Your Experience Mod or It Will Control You
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — June 2006
One of the most confusing components of an employer’s Workers’ Compensation Policy is the Experience Modification Factor. They watch it increase and decrease from year to year – higher Experience Modification Factors generally increase costs and lower factors reduce them. What’s often missing is an understanding of how the Experience Mod factor works and what an employer can do to manage it to the absolute minimum.
Employers intuitively suspect that if they have injuries, their Experience Mods will go up and if they reduce or eliminate injuries they will go down. At a basic level, their intuition is correct, but there is much more to know and do to actually control Workers’ Compensation costs.
Solving the Workers’ Compensation Paradox
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — June 2008
A perplexing paradox exists in the world of Workers’ Compensation insurance. Thanks to safety professionals and the efforts of employers, employees have much safer workplaces, greatly reduced risks for injuries, and far better education in how to avoid injuries in the workplace of today than they did 15 years ago. According to the annual “Issues Report” of the National Council on Compensation Insurance (NCCI), from 1990 to 2004 there was a 45 percent decrease in work-related injuries.
The Costly Dangers of Not Getting Injured Employees Back to Work Quickly
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — October 2006
“We’ve got an employee who’s abusing the system and we’re just about fed up. So are our people.” Every insurance agent has heard these words from frustrated employers who are certain injured workers are taking advantage of the Workers’ Compensation system.
While we all know such abuses occur, they may be far less frequent than we may think, particularly when 90 percent of job related injuries are first-time occurrences. Very few employees have a pattern of multiple injuries.
The Biggest Mistakes Companies Make With Their Workers’ Compensation Insurance
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division — January/February 2006
Most business owners and managers purchase Workers’ Compensation in the wrong way. About 90 to 120 days before their policies expire, they put it out to bid and get quotes. Once in, they review the prices and usually select the policies with the lowest premiums.
While this may sound like a good business approach, it’s not only the least effective way to control Workers’ Compensation Insurance expenses, but it actually drives up the costs.
Has the Affordable Care Act Led to Employers Treating WorkComp Claims Like Crime Scenes?
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division
Workers’ Compensation fraud has been around, one way or another, since the first slacker hurled a spear at a Woolly Mammoth and then complained to the tribe leader he couldn’t go out on the next hunt “because he hurt his back”, when in reality he’d rather just hang around the cave painting on the walls.
A free “vacation” has long been a motivation of WorkComp fraud, as is monetary rewards. But the Affordable Care Act (a.k.a. ACA, a.k.a. Obamacare) has dumped millions of additional bodies into the healthcare system, putting a significant strain on each citizen’s budget. The U.S. Department of Health and Human Services weighs in with the disturbing news that the physician supply will increase by only 7% by 2020, and starting in 2015, the estimated doctor shortage will be approximately 63,000. By 2025, the shortage could be as high as 131,000, primarily due to the impact of additional users coming into the healthcare system. According to the U.S. Department of Health and Human Services, “This collision of care needs and the shortage of both primary care and specialist physicians could greatly impact the delivery of healthcare in the Workers’ Compensation marketplace.”
Managing Workers Comp: The Workers' Comp Perfect Storm
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division
Hang on to your wallets. Employers already are seeing the tip of a very nasty iceberg as the insurance industry feels itself reelin’ and rockin’ on a number of different fronts, all adding up to the “perfect storm.”
Combined ratios for workers compensation are hitting upwards of 112 percent. This means the insurance industry isn’t making any profits on workers’ compensation this year as every dollar coming in is going out at $1.09. This is worse than 2011, when it was $1.02 going out.
Pressure is Building in the Workers’ Comp Well
David R. Leng, CPCU, CIC, CBWA, CRM, CWCA | Executive Vice President, Insurance Division
More than 10,900 Marcellus Shale jobs will be created from 2010 to 2014 in west-ern Pennsylvania alone, according to a study conducted by Pennsylvania College of Technology, a satellite of Penn State University. Since it takes a wide range of skills to conduct drilling operations, opportunities will continue for safety person-nel, electricians, welders, commercial drivers, heavy equipment operators and more. Good news for job seekers. But it comes with a caution to those businesses working in the oil and gas industry.
According to insurance industry experts, companies that hire new workers have more Workers’ Compensation claims, especially if they are drilling for fossil fuels. And those Worker’s Comp claims are about to cost employers a lot more.
Don't Just Take Our Word for It! Real Businesses, Real Results
David, I just can't thank you enough to finding and returning to us the $27,438 in overcharges from our last two years of audits. I only wish we had been allowed to go back to the prior years to recover money. More importantly, you provided us with a process so that we can avoid being overcharged in the future by the insurance companies.
I just cannot thank you enough for helping us to take control of our work comp. In addition to making my life easier by helping to manage our claims, your team helped us create a very strong safety culture. Our injuries are down significantly, but more importantly, you helped reduce our work comp premium by over $80,000 a year.
David, you and your East Coast Risk Management team blew us away. First, your team recovered over $42,000 in overcharges that my agent allowed to happen. Second, over the next 7 months you overhauled our safety programs and hiring process. Your injury management team minimized a potentially uncontrollable and ugly claim which would have cost us tens of thousands of dollars in additional premium and rehiring costs. Third, your negotiations with our insurance company resulted in an additional $49,387 (44%) reduction in my workers compensation renewal premium. We figure you have added over $100,000 to our bottom line in just 1 year. Thanks!!!!
Throughout David’s career he has always been on the forefront of thinking. His understanding of insurance and specifically workers' compensation allow him to see things and establish practices that others eventually follow. David takes an entrepreneurial approach to problem solving resulting in both savings and added protection for his customers.
I first became acquainted with David’s knowledge of Workers’ Compensation when I attended a seminar in 2007. I took the opportunity to meet with David to discuss better ways we could handle not only our Work Comp claims, but how we needed to drastically overhaul our HR processes. The Benefits have been multitude. I have great confidence in ultimately can make a company more profitable.
9 months ago I hired Duncan and their East Coast Risk Management to implement their Risk Solutions Program. As a result, I just saved $57,494 on my insurance renewal - That's 42%. Duncan met with me and my employees, toured my facility and put together an aggressive Risk Solutions Business Plan. They started implementing immediately and are in our plant several times each and every month.
David Leng is very knowledgeable about Workers’ Compensation and a pleasure to work with. His knowledge allowed our company to reduce its Workers’ Compensation premiums by almost 55%.
Working with Duncan we were able to enhance the safety culture in our organization and reduced our Workers’ Compensation costs by over $300,000 a year.
Duncan found that my experience modifier was WRONG!!!! Not one of over a dozen plus agents that I spoke to previously saw that! They were able to get my experience modifier corrected, and force my insurance companies to return over $86,000 to me! They leveraged what safety changes they implemented and obtain an insurance policy at our renewal that was over $100,000 lower. In a span of 4 months, they put almost $200,000 back in my pocket!
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