On my daughter’s 7th birthday she was gifted a Magic 8-ball. You know, the one with the blue liquid that you shake and it magically answers whatever question you’ve asked. Often the response would be a non-committal answer like “Ask Again Later” or “Cannot Predict Now.” Feverishly, she would ask the question again, shake it harder, and repeat until she got the answer she wanted. It doesn’t have to be this way with workers’ compensation costs.
In business, and especially with workers’ compensation costs, it is decidedly harder and more important to predict the future. One area of particular importance is the ability to predict (aka accurately forecast) future workers’ compensation premiums based on the business decisions you are making today. Accurate forecasting gives you the ability to control your workers’ compensation future costs in three key ways:
Targeted claims decision-making – Rather than guessing about the financial impact of Light Duty, Kept on Salary, or even an investigation, you must know the real dollar impact of your decisions. This requires sophisticated and expert data analytics that go beyond weighing dollars spent against a reduction in developed losses, which are estimates and vary over time. It requires the ability to accurately compare the real dollars you are spending to a reduction in future premium costs.
Information on your schedule – Labor & Industries (L&I) releases rates and performance information late in the calendar year making effective budgeting difficult for many. Make sure you have the knowledge and tools to accurately forecast your premium (within 1-2%) for up to two calendar years yourself on your own financial planning schedule.
An understanding of impact—Knowing where and when injuries happen most frequently is good; understanding and prioritizing injury prevention based on impact is better. It is a critical component to not only controlling your future premiums but more importantly, keeping your employees safe.
If you’re uncertain about where you stack up in these three areas, we’d be happy to talk it through with you on our nickel. If you’d like to learn more about how the decisions you make today impact your future premium or simply get an early and accurate look at your projected 2022 premium, we can help with that too (no obligation). To learn more about our workers’ comp services, then give us a call.
At Vigilant, our team provides holistic workers’ comp advocacy including claims, safety, legal, and overall cost savings strategy creation. We work hard to drive down your workers’ comp costs and prioritize keeping your employees safe and working. Let’s talk about how we can work together.