Financial Administrator Development Program

Transcription

1 Financial Administrator Development Program Risk Management and Workers Compensation Matt McCabe Director 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 2 1

2 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? Storage Configuration Sprinklers 4 2

3 Physical Flood Risk Loss Prevention / Reduction 5 HESCO Barriers MSU has purchased HESCO Barriers for flood protection. HESCO barriers are durable, and require significantly less materials and man hours to install vs. sandbags 6 3

4 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 Self Insured Levels Increased to Realize Lowest Cost for University $5 million $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 $3 million $1 million $250k $100k $100k $100k $200k $1 million $1 million $1 million $225k $225k $ Self Insured Level 2014 Self Insured Level 8 4

5 Insurance / Self Insurance/ Loss Prevention Other Self Insurance, $600,000 Loss Prevention, $333,127 Other Insurance, $549,838 General / Auto Liability Insurance, $342,589 Medical Malpractice Self Insurance $1,603,686 Property Insurance $1,255,292 Total: $4,684, Breakdown of Other Insurance HTH Worldwide, $46,949 Hull, $10,028 Aviation, $15,000 Foreign Auto PD, $13,095 Foreign Liablility, $11,323 Flood, $74,559 Athletic Accident, $163,520 Fine Arts, $48,925 Educators Legal Liablilty, $95,375 Accident Camps, $13,160 Athletic Auto, $33,414 Broadcasters Liablility, $1,780 Day Care, $1,385 Crime, $21,325 Total: $ 549,

6 Property Insurance Premiums $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 September 11th Hurricane Katrina $ Membership Credit: ($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 11 $3,000,000 Liability Insurance Premiums and Fees $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 12 6

7 Total Risk Management Costs $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 Self Insurance / Loss Prevention Insurance Total Risk Management Costs $0 13 Activity Levels Events = Circumstances that may give rise to a claim Claims = Demands for compensation Events Claims Calendar Year 14 7

8 1% 1% 1% 1% General Liability Events Total Number of Events= 1,961 4% 2% 2% 2% 24% Slip & Fall (467) Cut/Puncture/Struck by Object (404) Property Damage/Injury Involving Animal (322) 6% 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) 19% Ill from Eating; Skin Irritation (43) 21% Loft Injury (25) Golfball (28) Chemical/Smoke Fumes; Fire/Explosion; Water Damage (28) 16% 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 16 8

9 Overview 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 Other $191,214 Rehabilitation $108,630 Indemnity $1,074,512 Medical $1,217,033 Loss Adjustment Expense $251,

10 934 Claims for Calendar Year Total Cost for Calendar Year

11 Cost and Claims Calendar Year 21 Number of Claims Per Body Part(s) For Calendar Year 2011, 2012,

12 Average Cost Per Body Part(s) Calendar Year 2011, 2012, 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? 24 12

13 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 26 13