The document discusses a new webinar series sponsored by the Certification Institute for PEO workers' compensation risk management. Over 220 individuals from 61 PEOs participated in the first two webinars. The webinars cover operational, tactical, and financial topics to improve PEO operations and workers' compensation results. Upcoming webinars will cover experience modification, risk control, underwriting, claims management, and policy administration.

1. PEO ADVISOR
RISK MANAGEMENT
© Praxiom Risk Management July 2011
Features
The Certification Institute for PEO WC Risk Management Sponsors Webinar Series
www.certificationinstitute.org
A new webinar series, sponsored by the Certification Institute (CI), was launched in June, and received
immediate interest. Over 220 individuals representing 61 PEOs across the country participated in the
first two webinars. The one-hour, online courses are being offered at not cost to PEO operators and
Risk Managers and cover a number of operational, tactical, and financial topics geared toward improv-
ing PEO operations and workers compensation results.
While sponsored by the CI, the webinars are being hosted by Certified Risk Managers from the PEO
consulting firm of Praxiom Risk management. David E. Carothers, principal of Praxiom, responded “I’m happy to be able to partner
with the CI to continue to add value to the WC certification program. Continuing education is important, but is most valuable
when I can find topics that are related to my business, and that’s what we’re providing for PEO operators through these webinars.”
The first three webinars that have been released cover: Understanding the EMR Worksheet, The True Cost of Client Claims, and
Measuring WC Performance for Profitability. Upcoming webinars will cover the following topics as it relates to PEO operations:
Experience Modification
Risk Control
Underwriting
Claims Management
Policy Administration
To view all the current webinars and register, follow the link below:
www.peoriskmanagement.eventbrite.com
Comp Price Hikes Reflect Unusual Economic Environment
www.riskandinsurance.com
The information is based on surveys of 39 participating insurance companies, NAPEO’s CFO Seminar
representing approximately 20 percent of the commercial insurance market. It is July 20-21, 2011
included in the company's most recent Commercial Lines Insurance Pricing Sur- Westin Indianapolis
vey. Indianapolis, IN 46204
While price reductions continued for commercial property and management li- http://www.napeo.org/events/cfo_seminar.cfm
ability lines, the survey showed a modest overall 2 percent price increase for
workers' comp. A company expert and workers' comp veteran says the news is
Professional Employer & Marketplace 2011
not too surprising, given the confluence of factors affecting workers' comp.
September 12-14, 2011
JW Marriott Orlando Grande Lakes
"There is not one thing happening in all 50 states," said Bruce Hockman, workers'
Orlando, FL 32837
compensation practice leader for Towers Watson. "There are trends that are
common." http://www.napeo.org/events/Annualconference.cfm
Continue Reading...
© 2011 P rax iom Risk Management LLC www.prax iom-rm. com
Prax iom Risk Management is a Certified Risk Management and Safety P rofessional firm. 07/11

2. PEO
RISK MANAGEMENT
ADVISOR © Praxiom Risk Management
Measuring PEO Performance Evaluate your PEO’s practices vs CI
This section is dedicated to those PEOs that manage their Workers certification guidelines...
Compensation program through a Large Deductible or captive ar-
As we review the CI’s best practices for PEO risk management in each
rangement, and utilize positive results as a profit center.
of their 5 categories, evaluate how your PEO stacks up by answering
Loss Ratio these questions:
Loss Ratio in its simplest form is represented by the following:
Client Risk Assessment
LR = (Incurred losses / earned premium)
Written Carrier Notification— Have you established written proce-
It is most commonly used as a financial tool to determine profitabil- dures for identifying clients that require WC carrier pre-approval? Do
ity for a particular client. However, prior to using the Loss Ratio as you document the decision? Do you follow established timelines for
a performance metric, you should establish criteria for each of the notifying the WC carrier of client additions, deletions, and new work-
factors of the equation. site locations?
Consider these questions to more appropriately identify the loss
Segregation of Responsibility and Authority— Is there a clear and
ratio you are looking for:
meaningful segregation of responsibilities and authority between
Are you interested in incurred or paid losses? sales client risk assessment/pricing? Does it include WC and related
services?
Are you looking for current incurred loss values, or are you
more interested in ultimate developed losses?
New Client Risk Assessment— Does the PEO require a WC informa-
Are ALAE assigned appropriately for inclusion in incurred loss? tion form (i.e. application) acceptable to the WC carrier? Does it
Is earned premium current? include:
If on a large deductible, have you included deductible reim- - Description of operations and all commonly owned businesses?
bursements in earned premium? - Wages, EE count, class codes
- Location addresses
After losses and premium have been properly established, use the - Three years of loss runs
Loss Ratio result as a quick indicator against pre-established bench- - OSHA logs
marks to determine profitability. - Copy of any OSHA worksite citation reports
- Current WC carrier declaration page
- Copies of existing safety manual/policy
- Copy of drug-free workplace policy
Workers Compensation Highlights - Copy of return-to-work policy
- Procedures for pre or post-employment background checks
The Next-Generation Provider Network
By David Hugh Does the PEO maintain a prohibited list of high hazard classes ?
As most followers of the WorkersComp Forum are probably Have you identified potential contingent workers compensation ex-
well aware, the Illinois workers' compensation system re- posure from uninsured subcontractors?
cently emerged from a furious round of last-minute negotia-
tions in the state legislature with a series of potentially sig- Is there a need for a site assessment reports appropriate for the level
nificant reforms designed to not only curb some of the high- of risk exposure?
est workers' compensation costs in the nation but also to
Does the PEO use NCCI Basic and SCOPES manuals to verify accuracy
hopefully put an end to some of the most egregious abuses
of class codes? Do they match with description of operations and
in recent memory. site assessment reports?
The most recent Illinois reforms address a wide range of Does the PEO submit for WC carrier pre-approval, according to high-
system issues, but several major elements of the proposed risk guidelines?
reform package fundamentally change medical-cost-
containment strategies in Illinois. They include: Does the PEO obtain financial statements, credit reports, or perform
some other assessment to determine credit worthiness?
...continue reading For more on CI requirements visit: www.certificationinstitute.org
© 2011 P rax iom Risk Management LLC www.prax iom-rm. com
Prax iom Risk Management is a Certified Risk Management and Safety P rofessional firm. 07/11

3. PEO
RISK MANAGEMENT
ADVISOR © Praxiom Risk Management
Benchmarking
The Benchmarking section is used to outline various industries in terms of their Workers Compensation risk factors, historical
claims statistics, and key loss sources. Benchmarking statistics are obtained from a variety of credible sources including the largest
WC insurance companies in the U.S. and The Bureau of Labor and Statistics. The statistics used are aggregated from all states and
averaged over a 5 year rolling period. All stats below are from claims incurred between 1/1/06—12/31/10.
This month we continue our look at hospitality services, with a review of SIC 582—Eating Places.
Restaurants
SIC 5812 - Top 5 Loss Sources
% Total Incurred
Industry SIC: 5812 - Eating Places
As of: 4/30/2011 All Other
Burn
Period: 1/1/06 - 12/31/2010 4% 19% Slip/Fall - Same
Level
Average Incurred $2,677 33%
Slip/Fall -
Average Paid $1,917 Elevated
% claims > $10,000 5.2% 6%
% Incurred >$10,000 75.7% Struck
% claims >$25,000 2.6% By/Against Material
16% Handling
% Incurred >$25,000 60.3%
22%
0 -3 4 - 10 11+
First Report Mean Median Days Days days
Timeliness 11.4 1.0 68.5% 16.1% 15.4%
Key Metrics - SIC 58xx
Loss Sources Average Inc. % Inc % Claims
Frequency Rate 2.38
Slip/Fall - Same Level $ 3,952 32.6% 22.1%
Loss Rate $0.64
Material Handling $ 4,644 22.4% 12.9%
NAIC 722000 Struck By/Against $ 1,448 16.3% 30.2%
BLS Stat 2006 2007 2008 2009 Slip/Fall - Elevated $ 4,824 5.7% 3.2%
Recordable 4.2 4.1 3.7 3.4 Burn $ 1,049 4.2% 10.6%
DART 1.4 1.3 1.2 1.2 All Other 18.9% 21.1%
Rate Definitions:
Frequency Rate = # non $0 claims / payroll per $1M Recordable = # OSHA recordable incidents / 200,000 hours1
Loss Rate = Total Incurred $ / payroll per $100 DART = incidents w/ Days Away, Restricted duty or job Transfer / 200,000 hours1
1—200,000 hours represents the amount of time worked by 100 WSE in one year
© 2011 P rax iom Risk Management LLC www.prax iom-rm. com
Prax iom Risk Management is a Certified Risk Management and Safety P rofessional firm. 07/11

4. PEO
RISK MANAGEMENT
ADVISOR © Praxiom Risk Management
Stay Connected...
If you haven’t already joined, there is now a group on LinkedIn dedicated to PEO
Risk Management. All PEO operators and Risk Managers are encouraged to join
and participate in the online discussions. Or, you can simply follow the news posts that relate to PEO,
Risk Management, and Workers Compensation.
Click here to go to the PEO Risk Management group on LinkedIn and join.
With PEO Risk Management professionals averaging 20 years of experience and encompassing a
broad range of industry expertise, Praxiom Risk Management is committed to providing a wide
range of resources to help PEOs mitigate risk and grow their Workers Compensation profit center.
This PEO RM Advisor is a monthly e-newsletter designed to keep PEO executives and Risk Manage-
ment professionals informed of relevant topics in the area of PEO risk management. Sharing infor-
mation and best practice through e-newsletters is one of the many ways we help support PEO or-
ganizations' risk management efforts.
If you would like to contribute industry specific content or articles for publication in the areas be-
low, you may submit them to the Editor at:
RiskAdvisor@praxiom-rm.com.
Loss Control
Claims Management
Performance Metrics
RM Information Systems
Policy Administration
Carrier Relationships
Industry Certifications
Up Next…
We’ll continue benchmarking the hospitality industry with an in
depth look into the WC results of:
5461—Retail Bakeries
5421—Meat and Fish Markets
© 2011 P rax iom Risk Management LLC www.prax iom-rm. com
Prax iom Risk Management is a Certified Risk Management and Safety P rofessional firm. 07/11