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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  http://www.businessinsurance.com/article/20131103/NEWS08/311039977?tags=|304|92

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.

Published: Monday, November 18, 2013
Last updated: Tuesday, September 9, 2014
By: Arthur J. Levine, Ph.D.

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