Financial Administrator
Development Program
Risk Management and Workers Compensation
Matt McCabeDirector
Risk Management & Insurance
Rosemary Huguelet Senior HR Professional
Human Resources
January 15, 2015
What is Risk Management?
•
“The practice of identifying and analyzing loss
exposures and taking steps to minimize the
financial impact of the risks they impose”
•
Options for dealing with Risk
• Transfer= Insurance or Contract
• Retain= Self-Insurance
• Control= Prevention/Reduction
• Avoid= Do not proceed
Risk Management - Areas of
Concentration
• Property / Casualty Insurance
• Self-insurance Programs
• Review of Contractual Agreements
• Loss Prevention / Reduction
• Consultation with outside entities, MSU operating units, colleges, faculty and staff
• Claims handling
3
How do you reduce the amount of damage from fires?
Sprinklers
Storage Configuration
Physical Flood Risk Loss
Prevention / Reduction
5
• MSU has purchased HESCO Barriers for flood protection. HESCO barriers are durable, and require significantly less materials and man hours to install vs.
sandbags
HESCO Barriers
Examples of consultations
• Volunteer activities performed by faculty members of the
College of Human Medicine
• Review with Geography department of contract related to
valuable equipment loaned to MSU by the State of Michigan
• Safety concerns regarding batting practice in the Turf Arena of
the IM Sports West building
• Professional liability insurance for veterinarians providing
services outside of Michigan
• Proposal for students to rappel down the side of a mountain
7 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 $5,000,000 $250k $1 million $3 million $5 million
$1 million $1 million $1 million
$100k $100k
$100k $200k
$225k $0
$225k
2000 Self‐Insured Level 2014 Self‐Insured Level
Self‐Insured Levels Increased to Realize Lowest Cost for University
2014-2015
Insurance / Self Insurance/ Loss Prevention
Loss Prevention, $333,127 Medical Malpractice Self‐ Insurance $1,603,686 Property Insurance $1,255,292 General / Auto Liability Insurance, $342,589 Other Insurance, $549,838 Other Self‐ Insurance, $600,000 Total: $4,684,532 92014-2015
Breakdown of “Other” Insurance
Aviation, $15,000 Athletic Accident, $163,520 Accident‐Camps, $13,160 Athletic Auto , $33,414 Broadcasters Liablility, $1,780 Crime, $21,325 Day Care, $1,385 Educators Legal Liablilty, $95,375 Fine Arts, $48,925 Flood, $74,559 Foreign Liablility, $11,323 Foreign Auto PD, $13,095 Hull, $10,028 HTH Worldwide, $46,949 Total: $ 549,838 10
$0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 01‐02 02‐03 03‐04 04‐05 05‐06 06 ‐07 07 ‐08 08 ‐09 09 ‐10 10‐11 11‐12 12‐13 13‐14 14‐15
Property Insurance Premiums
MembershipCredit: ($111,145) ($125,880) ($119,758) ($148,830) ($228,128) ($233,975) ($234,000)
Comments: 1. If rates stay constant, premiums still increase over time as replacement cost values increase
2. Membership credits depend on FM Global underwriting results and vary based on number of membership years
September 11th Hurricane Katrina
11 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000
Liability Insurance Premiums and Fees
$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000
Total Risk Management Costs
Self‐Insurance / Loss Prevention Insurance Total Risk Management Costs 13
Activity Levels
Events = Circumstances that may give rise to a claim Claims = Demands for compensation
334 266 262 287 326 295 276 321 318 424 97 88 73 58 55 51 64 72 52 80 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Calendar Year Events Claims 14
24% 21% 16% 19% 6% 4% 2% 2% 2% 1% 1% 1% 1%
General
Liability
Events
2004
‐
2014
Total Number of Events= 1,961
Slip & Fall (467)
Cut/Puncture/Struck by Object (404) Property Damage/Injury Involving Animal (322) Miscellaneous (365)
Property Loss/Property Damage (123) Gate Arm (72)
Damage Caused by Off Road Equip/Snow Plow/Golf Cart (32) Spill on Claimant; Burn Injury (38)
Ill from Eating; Skin Irritation (43) Loft Injury (25) Golfball (28)
Chemical/Smoke Fumes; Fire/Explosion; Water Damage (28) Bicyclist Injury (14)
15
Overview
of
MSU
Workers’
Compensation
Process
•
Self‐insured; self administered
•
Eligibility: who is and isn’t covered
•
Incident occurs
•
Assess need for medical treatment
•
Complete “Authorization To Invoice MSU”
•
Complete “Report of Claimed
Occupational Injury or Illness” form
16Overview of MSU Workers’
Compensation Process
•
Outcome
of
medical
treatment
‐
Return
to
work
‐
Return
to
work
with
restrictions
‐
No
return
•
WC
pays
medical
expenses
•
WC
processes
loss
time
•
WC
makes
adjustments
in
SAP
17
MSU Workers’ Compensation Costs
2.8 Million for FY 2013 -2014
Medical $1,217,033
Indemnity $1,074,512
Loss Adjustment Expense $251,964
Rehabilitation $108,630 Other $191,214
934 Claims for
Calendar Year 2014
19
Total Cost for Calendar Year 2014
Cost and Claims
2004-2014 Calendar Year
21
Number of Claims Per Body Part(s)
For Calendar Year
2011,
2012,
2013
Average Cost Per Body Part(s)
Calendar Year
2011,
2012,
2013
23
Discussion Topics
What event occurred in 1904, 1947 and 1975 at
Michigan State University ? Clue: It involved water
What steps can be taken to manage the risks associated
with 1,339 University owned motor vehicles?
What types of events could interrupt operations?
Top
Ten
Best
Practices
1. Engage consultants from central offices early
2. Complete and submit reports and records in a
timely matter
3. Develop a culture of “See Something, Say
Something!”
4. Maintain your work sites
5. Watch for patterns
25
Top
Ten
Best
Practices
(continued)
6. Educate frequently on safety
7. Actively enforce safety rules
8. Be Flexible about Return to Work
9. Manage workplace stress
10. Obtain reviews and required signatures on third
party contacts
