Hello Everyone,

 With the current economy in shambles we have all been looking to cut costs and save money. I was curious if anyone out there has had any luck getting their WC or property insurance rates to drop by being proactive. I spoke with my WC rep and was amazed to find out that even if we sought and were awarded VPP and/or SHARP status, the WC insurance company still would not reduce rates. Anyone else had any luck with saving money on insurance? Please no Geico references! ;)

With a 15 minute phone call...

Kidding.

We're currently working on achieving SHARP status.  We've yet to discuss with our WC guy about rate reductions.  I've heard input from different people regarding rate reductions.  I think what it all boils down to is the EMR.

-Justin

Please let me know if you have any luck with your WC guy. I know, all they seem to care about is the exp. mod. which is sad because there is not much motivation or incentive from the insurance companies to go above and beyond whats required. Hope to hear from you soon.

 - Jason

Sorry for not responding sooner.  Had a slight issue come up with a tooth extraction that was doing great.  Turned out to be a "We've never seen that before!" case.  Think of how comfortable that made me feel...

Anyway...

Our WC representative said the following:

"Unfortunately, the Alabama Self Insured Worker's Compensation Fund/EMCI does not offer any discounts in rates for the SHARP/VPP designation."

-Justin

I'm in agreement with you that the designations should give you preferential rates. However, I think you'll see reductions some time down the road. With the focus on safety, you'll probably fewer and less severe accidents. Over the course of number of years, your WC rates will be calculated at lower levels. If your management is looking for an economic justification for pursuing the designation, talk to your accounting person and see if you can't calculate some present values.

 MikeCJ

Most WC rates are lowered with every dollar saved on claim costs.  The quetion is, "how much?"

Claim costs are used to calculate the company's experience modification factor.  Lower EMFs produce lowered rates.  You can look over your company's loss history and calculate premium savings realized by eliminating a certain claim, for example, or types of claims through investments in safety resources and then weigh the cost versus the savings in WC insurance premiums.  It's a fairly complicated calculation if your not familiar with it, but you can ask your insurance carrier for help.

VPP or SHARP designation isn't going to help with worker's comp rates.  http://www.wnins.com/losscontrol/experiencemod.pdf to download a good, plain-English explanation of how worker's comp rates are calculated.

16 states have rules that require certain worker's comp insurance providers to offer discounts on premiums to companies with experience modification rates (EMRs) over 1.2  that adopt written safety plans and/or safety committees.