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Loss Prevention as a Cost Control Exercise


Loss Prevention as a Cost Control Exercise * * * Hiring Practices, cont. Over 19,000 test administered since 2005 19% did not meet the minimum of 70% correct Hiring ... – PowerPoint PPT presentation

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Title: Loss Prevention as a Cost Control Exercise

Loss Prevention as a Cost Control Exercise

Loss Prevention as a Cost Control Exercise
  • Speakers
  • Bill Hettrick
  • President/CEO,
  • Hettrick, Cyr Associates
  • Jeff Barker
  • Director of Insurance,
  • JELD-WEN, Inc
  • Moderator
  • Peter Willitts
  • President,
  • Liberty Mutual Management

Perspectives Given Today
  • Bill
  • Safety Risk Control Service Provider
  • Construction General Industry
  • USA Companies
  • Approximately 50,000 Employees
  • Proven Programs across Multiple Captives and Self
  • Jeff
  • Risk manager
  • Single manufacturing perspective
  • 24 countries
  • 22,000 employees
  • Grown primarily through acquisition

Loss Control Through Effective Best Practices
  • Best Practices Focus on
  • Programs
  • Policies
  • Workplace
  • Hiring Practices
  • Post Injury Management
  • Claims Management
  • Internal Safety Circles Committees
  • Employee Training
  • Employee Maintenance
  • Program Audits Inspections
  • Worker Observations Counseling
  • Performance Measurement
  • Written Safety Programs
  • Supervisor Training Accountability
  • Fleet Safety/Auto
  • General Liability
  • Property
  • Legal

Loss Control Best Practices
  • Focuses on key elements of a true safety culture
  • Member/Company Developed Approved
  • Captive members are Audited Internally/Externally
    to Best Practices
  • Non-compliance is tracked, trended, and reported
    to Captive members/management

Proven Effective Best Practice Examples
  • Benchmarking Management by Measurement
  • Employee Maintenance
  • Legal
  • Hiring Practices
  • Claims Success Alerts as an Accident Prevention
  • Employee Weekly Safety Huddles (Tool Box or
    Lunch Box)
  • Peer to Peer - Safety Risk Managers Semi-Annual
    Workshops Sharing of Resources Ideas
  • Captive Appreciation Recognition of Employee
    Safety C.A.R.E.S.

Management by Measurement - Benchmarking
  • Measures results of captive and individual
    members, departments, and/or facilities against
    tangible goals industry averages
  • Develops accountability by member, department and
  • Benchmarks calculated by payroll or hours worked.
    Examples include
  • Loss Rate per 100 of Payroll (WC, GL)
  • Incurred Cost per FTE (WC,GL)
  • Non 0 Claims Frequency per 1,000,000 in payroll
    (WC, GL)
  • Days Away from Work Rate per 200,000 hours worked
  • Lost Time Frequency Case Rate per 1,000,000
  • Non-0 Auto Frequency per 10 Insured Vehicles
  • Auto Liability Loss Rate per Insured Vehicle
  • OSHA Recordable Incidents per 100 FTEs (200,000
  • Individual Tracking of Member Loss Pics with
  • Lag Time Reporting

Tracking Captive Members or Facilities Against
Captive Goals
Note Information contained in this chart is for
example purposes only and does not reflect actual
company data
Establishing Timely Reporting as a Best Practice
Note Percentages do not represent actual
practices, this is for example only information
Benchmarking Transparency
Non 0 Claim Frequency per 200,000 Hours Worked
The Importance of Employee Maintenance
  • The first of the Baby Boomers reached age 63 in
  • As baby boomers approach retirement, they will
    comprise a greater percentage of the workforce.
  • Will present a greater challenge to manage
    workplace safety, mitigate risk, and prevent
  • Employee Maintenance programs must be part of the
    forward thinking to maintain standards of fitness
    for duty
  • Approximately 1.4 million claims are filed
    annually in the USA as a result of sprains,
    strains, and overexertion, accounting for a
    direct cost of over 25 Billion dollars

Evolution of an Injury
  • 1st Quarter (0 -20)
  • Resilient (Mostly Bumps Bruises)
  • 2nd Quarter (21 39)
  • Soft Tissue Injuries
  • Half Time (40 41)
  • Injured Reserve
  • 3rd Quarter (42 60)
  • Lost Time Injuries
  • Season-ending Injury
  • 4th Quarter (61 80)
  • Debilitating Injury
  • Overtime (81 85)
  • Double Overtime (85)
  • Injury Game Over!

Human Maintenance
Employee Maintenance
  • Mechanical Machine
  • Human Machine
  • Most difficult to properly diagnose
  • Most expensive machine to fix
  • Toughest machine to get back on the road
  • Maintain Equipment
  • Maintain Grounds
  • Maintain Building
  • Maintain Vehicles
  • Preventative Maintenance

Welcome to Stretch Coach Train The Trainer!!!
Pre-Shift Stretching Design
  • Prepares the Body For Physical Work
  • Increases Flexibility
  • Enhances Body Mechanics
  • Creates Body Awareness
  • Reduces Risk of Soft Tissue Injury
  • Physically Mentally Prepares Employees for
    their Workday
  • Starts Work on a Positive Note
  • Reduces Stress Tension
  • Increases Alertness

Improvements in Health, Morale, Productivity
result over time
National Trucking Company 4,000 Drivers
  A national trucking company implemented the
Pre-Shift Stretch Program in 2007, and saw a 62
injury reduction within the first year.  (This
company utilizes a blending of the Pre-shift
Stretch and a part-time onsite Human Maintenance
System certified athletic trainer through
The results of implementing the Occupational
Athletics Program have exceeded our expectations.
Mark Everest does a great job sending a
motivational message to our employees to change
their lifestyle behaviors. We have seen a
decrease in our workmans compensation claim
costs of 77 through the involvement of our
employees in the Pre-Shift Stretch Program.
Additionally, the continual maintenance of the
program has created a culture of wellness. We
had 6 of our employees quit smoking and 16 went
on the weight loss programs. Results of the
Health Risk Assessment, year after year, show
that their total lifestyle scores improved
significantly. Our employees are happier and
healthier. This has been a great return on
investment. Penny Pilafas,
V.P. Human Resources
Midwest USA Utility Company 8,500 Employees
One of OAIs largest single clients, this
Midwest Utility company implemented the Pre-Shift
Stretch in 2005 and because they had such
significant results (a 50 reduction in soft
tissue injuries), they added several
full-time HMS certified athletic trainers onsite
at various locations.  Their current savings has
been in the millions of dollars.  
Legal Best Practice as a Loss Control
  • Begins with identification of claims and
    exposures, looking for claim patterns, just as we
    do in safety, where do risks come from?
  • Main Focus on CGL Property, but also Auto and
  • Review of Contractual Obligations by
    members/companies Real Estate, Purchase Orders,
    Employment/HR, General Services, Products,
  • Examine indemnification language and check to be
    sure that indemnification liability is limited to
    the extent the loss is due to member's negligence
  • Certificates of Insurance Requirements
  • Statutes of Limitations by member location
  • Identify Strategy
  • Development of Best Practices, putting captive in
    less legally vulnerable position

Claims Alerts to Prevent Incidents Accidents?
  • Purpose of claims alert program is to
  • Inform educate captive members of potentially
    large claims that have occurred at other
  • Provide a detailed sequence of events, root cause
    analysis, and preventative measures to help
    everyone educate employees and prevent a
  • Can be utilized as a tool box, lunch box, safety
    huddle, or shift talk where applicable.
  • Criteria for a claim to become a Claim Alert in
    a Construction Captive (example)
  • All falls over 6 in height
  • Any water infiltration incident
  • General liability claim over 25K
  • Preventable auto accident claim
  • Property damage in excess of 25K
  • Any claim that provides a value to the members at

Five Minute Safety Huddles
  • A five (5) minute Safety Huddle is an informal
    safety discussion presented to employees as
    refresher training within their departments.
  • Safety Huddles are run by Department Managers,
    Supervisors, Safety Committee Members, or
    Field/Shop Personnel.
  • Talks focus on a specific workplace hazard,
    department incident, OSHA topic, or any relevant
    safety matter.
  • A 5 minute talk every week provides over four
    hours of refresher training a year.
  • Benefits
  • 100 Comprehension All adults have a 5 minute
    attention span.
  • Positive communication between management
  • Keeps safety as a priority as a constant
    refresher 24/7.

Information Sharing Development
  • Safety Risk Management Peer to Peer Meetings
  • Primary goal is to establish an internal network
    of safety professionals and risk managers who
    share common workplace perils within the captive.
  • Peer to Peer extended to Store Managers,
    Operations Directors, Department Managers,
    Superintendents, HR Directors, Safety Committee
    Chairs, etc.
  • Meetings are held 1-2 days.
  • Outside speakers selected based on topics and
    specific training requirements of meeting.
  • Conducted Regionally or Nationally a minimum of
    twice per year.

Project C.A.R.E.S.
  • Project C.A.R.E.S Captive Appreciation and
    Recognition of Employee Safety
  • Objective Giving recognition to those who put
    forth added effort in the workplace everyday to
    ensure not only their own safety, but that of the
    entire department or crew. These employees go
    above and beyond to ensure the workplace is as
    safe as possible, and truly make safety a number
    one priority. The efforts these employees put
    forth on a daily basis, improves safety for all
    and deserves recognition.
  • Frequency Monthly
  • Criteria Each captive member submits an
    employees name based upon criteria developed by
    Captive Loss Control Committee. Recipients of the
    CARES Award are eligible on a frequency of once
    per policy year.
  • Award Those selected receive recognition in the
    monthly captive newsletter which is discussed and
    displayed in all location. In addition, a gift
    certificate for 50.00 to a local restaurant and
    a polo shirt displaying the captive name, with
    the slogan C.A.R.E.S.

Proven Results All HC A Captives Self
Insured Programs
  • Some captive members (size dependent) making more
    in captive distributions than operational profits
  • Loss ratios reduced by 57
  • Claims frequency decreased by 38
  • Have First VT Captive to receive a return in Year
  • 92 of members and companies performing better
    than their individual loss pics
  • Supervisor/Foremen testimonials within captive
    most powerful, Charlie the Superintendent.

Best Practices
  • Dedicated Loss Control Managers
  • Hiring Practices
  • Risk Management Manual
  • Contracts and Certificates of Insurance
  • Silo Breakdown
  • EPAQ (Environmental Project Assessment
  • Engineering Involvement
  • Product Development
  • Quality Production
  • Incident Investigation
  • JWReportIt
  • Benchmarking Driving Competition

Dedicated Loss Control Group
  • Six dedicated individuals
  • Life Safety (W/C) primary focus followed by
    property, motor vehicle and general liability
  • Administrative conduit for facility challenges
  • Train the Trainer techniques and topics
  • Semi Annual site visits to each location
  • Audit reports solution oriented
  • Relationship with facility management
  • General Manager accountability sheet

General Manager Accountability Sheet
  • Non-Negotiables of Risk Management supported by
    Executive Management

Safety Programs Annual Training (PG 301, RMM) Yes No
1. Management conducts and documents monthly employee safety training concerning all the applicable topics listed in the RMM tab 5 in order to meet the annual training requirements. (Note Your Field Service Manager will help you determine the applicability of specific safety programs to your facility and operations.) (301-A, 2 RMM tab5)
2. All required safety training is documented in ClaimDesk Training Tracking.
3. The facility incorporates safety topics into the daily or weekly production/quality meetings. (Best Management Practices)
4. The Lockout/Tagout Program is fully implemented. (RMM tab 11)
5. The Personal Protective Equipment (PPE) Program is fully implemented. (RMM tab 12)
6. The Hazard Communication Program is fully implemented (MSDS). (RMM tab15)
7. There is an Emergency Preparedness plan in place that adequately addresses all foreseeable scenarios that could affect the facility. (RMM tab18)
8. The JELD-WEN Ergonomics Program is fully implemented. (JELD-WEN Ergonomics Program)
Hiring Practices
  • 2004 Safety Initiative
  • WCIR of 16.0 (1,979 claims)
  • Open Claim Volume of 735
  • Accrual of 18.5M
  • Analysis of dollar impact led to identification
    of two lead offenders
  • Employees in their first six months of hire
  • Repeaters
  • Result was emphasis on pre-employment, training,
    re-emphasis on substance abuse testing

Hiring Practices, cont.
  • Insight Integrity Test weed out potential
    problem employees before they begin employment
  • Workers Compensation Fraud
  • Work Place Violence
  • Substance Abuse
  • Theft
  • Dependability

Hiring Practices, cont.
  • Is your current use of illegal drugs or alcohol
    affecting your job performance?
  • A. No, I do not report to work with illegal
    drugs or alcohol in my system.
  • B. No, because I perform well even with illegal
    drugs in my system.
  • C. A little, but my performance is acceptable.
  • D. I have been told that my job performance is
    not very good when I have reported to work
    with drugs or alcohol in my system.

Hiring Practices, cont.
  • From 2004 to 2010 over 48,000 tests conducted
  • W/C Fraud, Theft, and Substance Abuse three
    leading categories

Hiring Practices, cont.
  • Basic Skills

Hiring Practices, cont.
  • Over 19,000 test administered since 2005
  • 19 did not meet the minimum of 70 correct

Hiring Practices, cont.
  • Overall Results of Safety Initiative
  • WCIR of 4.1(338 claims)
  • Number of open claims 290
  • Accrual of 8M
  • Translates into a 45M savings

Risk Management Manual
  • Online resource for all facilities in one
  • Programs address a variety of risks from workers
    compensation, motor vehicle, property and general
  • Gives JELD-WEN standard unless regulatory
    requirements are higher
  • Examples of programs
  • Hot Work
  • Sprinkler Maintenance and Testing requirement
  • Contractor Safety
  • Ergonomics
  • Risk Management Manual Program Example

Contracts Certificates of Insurance
  • Five person contract review committee
  • Legal (contract attorney)
  • Operational Vice President
  • Treasury/Accounting
  • Tax
  • Risk
  • Philosophy shift toward solidifying every
    relationship with a contact
  • Specific insurance requirements and limits for
  • Track suppliers/contractors for compliance

Silo Breakdown
  • Connecting and sharing information between
    business units, divisions, facilities, and
  • Engineering Involvement
  • Review plans for plants and equipment prior to
    being built
  • On the same team for process improvements
  • EPAQ (Environmental Project Assessment
  • Filled out prior to any project or process
    changes occur
  • Risk Management automatically sent a copy

Silo Breakdown, cont.
  • Transportation
  • Driver tracking, classification approval
  • Point system for violations
  • Number of vehicles provided electronically
  • Product Development Production

Incident Investigation
  • Each near-miss, incident or claim is investigated
    regardless of line of coverage
  • Identify whether it was an unsafe act or unsafe
  • Identify root cause and preventive actions to be
  • Reviewed by safety committee and general manager
    or divisional vice president
  • Aids in claim management

  • Internal claims and risk management system
  • Over 600 users from safety coordinators, risk
    management staff, general managers, and
    divisional vice presidents
  • Five primary functions
  • Claim entering and management
  • Facility Audit
  • Training and Tracking
  • Document Management
  • Deductible and Monthly Billing

  • WCIR
  • Monthly reports sent to all General Managers,
    Divisional Vice Presidents, Executive
  • Universal definition of what is included in the
  • Global Audit
  • Compliance with top 14 Risk Programs

Challenges for Implementation
  • Cost vs. Benefit
  • Corporate Sheriff Mentality
  • Work Place Culture
  • Silo Kingdom Effect
  • Top Down Support
  • U.S. vs. International
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