Workers comp predictive modeling presents challenges to self-insured groups
Here is a great article from the Business Insurance website on workers comp predictive modeling presents challenges to self-insured groups
While this article specifically addresses claim-modeling, it’s also a useful reminder that workers compensation insurers and self-insurers compete for clients. This competition poses an important risk for employers considering a self-insurance group as an alternative to conventional insurance. The financial risk of buying insurance is generally limited to the premium; in the event the insurer becomes insolvent, the state Guaranty Association pays claims. But with self-insurance, members may be responsible for assessments if the group’s reserves prove inadequate -- and, ultimately, members may be jointly and severally liable for the debts of the entire program. Self-insurance may indeed be the best, lowest-cost w/c alternative – but it must be entered with eyes wide open.