Andy Neary argues that work comp is treated as an insurance shopping problem when it should be core risk management. Most agencies ignore employee education and claim handling, missing soft costs that devastate injured workers. Advisors who focus on safety practices and process over premium cuts can actually fix the system.
Chapters
Where does work comp fit into that overall risk management strategy? Because I think there's a lot of agencies that are still stuck on just finding the right carrier, look at dividends, who's going to give the best dividend, experience mods, blah, blah, blah, blah, blah, loss runs, but they're not really trying to figure out how comp fits into the overall risk management strategy.
Well, I'll tell you this, it fits into the overall risk management strategy in the least insurance-applicable way that you can imagine. I'll tell a story that will get my point across. I had a networking person that, that reached out to me and said, hey, I know this company, they're paying a lot of money for their insurance, but they're struggling with their work comp. I know you're the work comp guy, call them. And I did, and we talked for an hour and a half, and an hour and a half later I had signed AORs for their entire insurance program. I want to be clear, we never once talked about anything policy related, not one comment about policy. It was all about not understanding what their people should be doing before, during, and after a claim, the fact that they weren't educated, the fact that they didn't understand the financial implications to a work comp program in relation to their bottom line. And so you think about all this, and then the soft costs associated with their employees getting injured and having to replace them, and so on and so forth. We didn't talk about their policies, their coverages, their endorsements, and an hour and a half later, they hired me. That should tell you how much workers' compensation is related to risk management and not insurance, right? Because they saw the light that This isn't about that bottom line premium number. Everything you do that drives the actions of your people and keeping your people safe is what drives that bottom line number at the bottom. It's bidding and quoting will never help you in work comp ever. Might save you for a year, maybe, right? But it's never going to fix the problem.
Well, I think about, so when I was still selling, I actually had partnered with somebody WA knows really well, Ellerbrock Norris out of Nebraska. And we used to put on workshops where Andy Neary and Elliot Bassett would talk about the, the, the, the, the impact frequency of work comp claims can have on your overall bottom line. And I'd come in and talk about the impact the severity of healthcare claims can have on your benefits bottom line. And it just played so well because at the end of the day, you're right. I mean, work comp isn't just about the carrier you're shopping. It's what are you doing on a daily basis from a risk management perspective to make sure claims don't happen? And if they do, the impact financially is as minimal as it possibly can be.
Oh, without a doubt. And if you care about your people, like genuinely care, understand this. I have a job because the work comp system is so far from perfect. It's not even funny, right? The, the entire industry, the entire system is relatively broken from a financial perspective and from a claims management perspective. And when I say that, I, I mean the stories I have, there's one I can think of where a gentleman was injured. Claim was misdiagnosed, surgery was botched, the whole deal happened. He ended up being off work for 12 months when he never really probably should have been off work or had surgery in the first place. And a year later, he's foreclosing on his home and getting divorced from his wife. Now, are they entirely all related? I don't know. I'm not in that guy's household. What I do know is that didn't help, right? People's lives become unraveled if they go down that black hole of work comp without anybody supporting and helping them. If an employer isn't educated enough to do it and a broker doesn't give a shit enough in order to help, where you at?
