CompWest......A Solution For Manufacturers
 Nov. 28, 2012

California Manufacturers & Technology Association (CMTA) membership has many benefits. One of those benefits is helping members solve the workers’compensation problemstheyfaceasCaliforniabased manufacturers. Many employers believe that one of the most challenging problems they face in California is navigating our complex and workers' compensation system. In actuality, workers' compensation itself may be the problem. It's costly employer borne liability for manufacturers and unless your organization is large enough to assume risk (retain losses), there are few insurance options available to you, especially when market conditions tighten and lead to higher rates and premiums.

As an association serving the manufacturing sector, our responsibility is to provide CMTA members with solutions to the complex California workers' compensation problem. To meet this challenge three objectives must be achieved:

    1. The insurance carrier needs to provide loss control services that help reduce the frequency and severity of losses.

    2. The insurance program must provide services that help participants address the direct and indirect losses associated with work related injuries.
    3. When claims are made, the insurance carrier must have practices in place to lessen the cost impact of those claims.

??But, why are these three objectives so important? Because workers' compensation rates and premiums are driven by the loss experience of individual manufacturers. The impact of your experience modification can either dramatically of raise or lower your annual premium.

CMTA is not an insurance company, but we have risk management expertise and a degree of buying power when you collectively band together manufacturers as a hazard class. While other industry groups believe the way to capitalize on their common industry nature is to think outside the box and enter the Alternative Risk Transfer (ART) environment. We believe these solutions are just too risky. They require participants to capitalize the selected risk financing treatment and enter into risk sharing agreements. Instead of thinking outside the box, which is risky and unpredictable, CMTA realized that it was more practical to think inside the box. We looked for a one-stop shopping solution that would provide competitive rates, help members control/reduce their loss costs, meet the compliance requirements of the regulatory bodies that oversee California's workers compensation system and provide a long-term approach to managing workers' compensation costs. Accordingly, three years ago CMTA selected CompWest Insurance Company as our workers' compensation partner.

CompWest is a fundamentally sound California focused workers' compensation specialist. Their success or failure lies with how well they serve California's employers. Like few other insurance carriers, CompWest understands that certain classes of business are more responsive to loss prevention and loss reduction practices than others. Manufacturing is just such a class sector. Since manufacturers operate within four walls, employee activities are well supervised. This level of supervision is critical to effectively identifying and addressing unsafe acts which are the leading cause of work related injuries. Additionally, manufacturing workers tend to be skilled and generally safety conscious and manufacturers recognize that productivity and safety go hand-in-hand. They generally make providing a safe workplace a priority for the organization. CompWest supplies considerable loss control support for their policyholders and their claims program, Workers' Compensation With Care, involves a host of loss reducing protocols such as their Keep At Work program, which has reduced indemnity costs for CompWest policyholders (many of which are CMTA members) by over $2,000,000 this year.

There are two truths about workers' compensation:

    First, pricing in workers' compensation seldom means value.
    Second, no workers' compensation insurance carrier will ever be the lowest price every year.
Recognizing these realities, CMTA looked for and found in CompWest a value proposition for our members. They provide services that can help CMTA members meet compliance requirements, reduce the frequency and severity of work related injuries and stabilize the long-term cost of workers' compensation. Additionally, while many insurance carriers outsource claims, have discontinued loss control services and no nothing in the way of educating policyholders on how to manage both the direct and indirect costs of workers' compensation, CompWest maintained all of those services in-house and are committed solely to the California workers' compensation market.

We recognize that some manufacturers will always seek to find the lowest price. In a soft market, where the availability of insurance is great, that may not be difficult to find. But, at a time when once again the insurance market is becoming harder and the availability of competitive insurance coverage is tightening,, is that really an effective long term solution to the California workers' compensation problem or just a short-term measure that will lead to significantly higher costs in the coming years? CMTA believes CompWest provides answers, support and results regardless of how the insurance market cycles up and down. They produce results that help policyholders achieve the lowest possible experience modification. Their total paid benefit costs are 20.7% below the industry average and their disability costs are 28.7% below the industry average. Additionally, injured workers surveyed regarding their treatment by CompWest gave them 9.5 points out of 10. This is critical because a huge cost driver in the rates files by California’s workers’ compensation insurers is litigation. Employees (injured workers) treated fairly tend not to hire attorney’s to advocate their interests.

As a CMTA member participating in this program, when you review your renewal consider the quality of the claims management you receive through CompWest, the effectiveness of the loss control service they provide and the usefulness of the policyholder and support they deliver. Ask yourself if you have a safer work environment for your employees? If you consider those benefits and the 5% CMTA group discount you receive, it's clear that participating in the CMTA Group Workers' Compensation Program delivers value that helps participants control the long-term cost of workers' compensation.

There is really no short-term pricing solution to the long-term California workers' compensation dilemma. But, for manufacturers there is the CMTA Group Workers' Compensation Program, and CompWest.

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