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Controlling your risk by Bob Carruth

As Risk Control Manager for the NCACC, Bob Carruth manages the operation of the Risk Control Team for the Risk Management Pools. The team assists members with development of safety policies and programs and identification of liability exposures and controls. Carruth is a Certified Safety Professional and is certified as an Associate – Risk Management.  For archives of this column click here

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Dec 31

Looking back at another year of positive progress

Posted on December 31, 2012 at 2:43 PM by Chris Baucom

In June 2008, the Board of Trustees of the NCACC Risk Management Pools made a strategic decision to staff an internal underwriting and risk control function after 26 years of using an external contractor to provide these services. By March 2009, a full staff of three risk control specialists, two underwriters, as a well as underwriting and risk control managers, was complete. In addition to this, the position of property and casualty program specialist was created and staffed with one of the former field marketing representatives.
 
This June marked the third complete year since this transition took place. In 2007, the Workers’ Compensation pool was facing close to a $20 million long-term deficit. By June 2012, this deficit had been reversed to reflect a $6 million surplus. Many factors contributed to this tremendous turnaround, including the addition of 16 new counties as pool members, aggressive claims management strategies on the part of the pool’s third-party claims administrator, and targeted risk control services to our member counties and entities.

Although there are still challenges to be addressed regarding safety and risk control at the county level, there are encouraging trends that show the model used by the NCACC Risk Management Pools will continue to be the best option for the risk management program in North Carolina counties. 

There is a slight difference in the presentation of the data beginning with the 2012 County Safety Index. You will see two charts presented here – the remainder of the data is presented on our website at www.ncacc.org/index.aspx?NID=290.

Workers’ Compensation

The Workers’ Compensation pool currently covers 27,353 county and related public entity employees throughout North Carolina. Although the total number of claims has remained relatively flat since 2008-09, the addition of $150 million in new payroll exposure resulted in a 7 percent reduction in the overall number of claims per $1 million in payroll during the past three years, from 1.65 to 1.52. More significant was the drop during the same period in the number of indemnity claims (those paying out some sort of disability or wage replacement). From July 2009 until June 2012, the frequency saw a 34 percent reduction, from 0.33 to 0.21. Loss costs were also down overall during the period July 2008-June 2012, showing a 17 percent reduction – from $0.64 per $100 payroll, to $0.53.

Major loss sources for the Workers’ Compensation pools continue to come from two sources – Overexertion injuries to EMS personnel, as well as “Line of Duty” injuries to law enforcement officers. This latter group of injuries include motor vehicle crashes involving deputies as well as injuries during apprehension and collateral claims incurred due to the overall work environment. Work will continue in 2013 to seek long-term solutions to driver training for law enforcement officers, as well as ways to improve the overall “situational awareness” level for law enforcement officers to help reduce mishaps from non-emergency response related injuries. 

In early 2010, the NCACC began a significant initiative to address EMS strain and sprain injuries from patient lifting and handling. Initially, six larger agencies were targeted for reduction. In the 2011-12 year, we began to see the effects of this training for the first time. Compared with the remainder of our member EMS agencies, these six counties have experienced almost a 60 percent reduction of severe strain and sprain injuries. As this initiative continues and filters through the remainder of our membership, we should continue to see improvement in this area.

Liability & Property

The focus of the County Safety Index remains on the Auto portion of the Liability and Property pool; this segment responds best to risk control intervention. Property losses to publicly owned facilities are usually related to storm losses, and general liability losses to a large degree are unique in their associated expenses due to legal defense costs. 

That said, the auto segment of the Liability and Property pool covers more than 11,500 vehicles, which includes approximately 4,000 law enforcement vehicles, 350 ambulances and 790 passenger transport vans and buses. With the growth of the Liability and Property pool since 2008, the overall number of vehicle incidents per 100 vehicles, which saw an increase from 2008 into 2011, saw a decrease of 20 percent in the past 12 months from 4.13 to 3.28. Likewise, the incurred loss per 100 vehicles has dropped 19.5 percent since 2010, from $10.06 per 100 vehicles that year to $8.09 in June 2012. 

Due to the nature of law enforcement vehicle operations, and the large percentage of these vehicles in the overall pool exposure base (almost 35 percent), it goes without saying that the largest source of loss is in our sheriff operations. Within the law enforcement function, however, a largely uncontrollable source of loss appears – which is epidemic throughout the entire auto insurance market – property damages due to deer strikes. The growth of the deer population throughout the state intersects with the nature of law enforcement vehicle operations. 

Over half of the physical damage claims to law enforcement vehicles statewide occur from hitting deer (and other wild or domestic animals) during times of limited visibility, primarily in November and December. Unfortunately, these numbers continue to increase. The best defense to address this loss source continues to be an increased awareness by the officer during peak migration times of the day, and the reduction of damage to the vehicle through the installation of grill guards to the front of patrol vehicles. 

The other major source of loss comes from transit operations. Our county transit departments and authorities are charged with the transport of the elderly, Medicaid recipients and other targeted populations of riders. A motor vehicle crash involving one of these transport vans can result in several bodily injury claims, not only from other drivers but from the passengers themselves. In addition, injuries can and do result from passengers who are not properly secured, or who release their own restraint systems while en-route. Installation of cameras in most vans by the North Carolina Department of Transportation, as well as continued partnership with the North Carolina Public Transit Association, will be critical in helping to train drivers and transit program managers on ways to reduce these types of claims.

The riskiest undertaking of any county employee is to get behind the wheel of a car. Given this, the risk control team continues to teach defensive driving courses to the membership. By the end of 2012, all three field specialists and the risk control manager will be certified by the National Safety Council to teach the four-hour Defensive Driver Course, at no cost to our members. 

County operations are complex. In this complexity are many other potential risks that continue to be explored and evaluated for ways to control and eliminate hazards to employees and members of the public. This column provided a broad summary of the safety and risk picture in our counties this past year. Again, for a more detailed report, please visit the complete County Safety Index report at www.ncacc.org/index.aspx?NID=290. If you have any questions, or would like additional information regarding our risk control services and programs, please feel free to contact a member of our risk control team.