Effect of loss control service on reported injury incidence

Introduction: A retrospective analysis evaluated the effectiveness of an insurance carrier's flexible loss control service strategy in reducing workers' compensation policyholders' reported injury and illness claims. Objectives: To assess the effects of a loss control service strategy on workers' compensation claim frequency rates, on medical-only claim rates, on severity-claim rates, and on claim cost among a group of California employers. Methods: Eighty-two small- and medium-sized companies with workers' compensation policies expiring in 1999 were randomly selected from a population of policyholders assigned to loss control consultants for two or more years. Claim performance data were obtained for each company's first expired in-force policy year and its 1999 expired policy year. The retrospective design was combined with a control component based on a randomly selected comparison group of 45 companies whose first policy year with the insurer expired in 1999 and who received safety services from the loss control staff. Results: The flexible loss control consultation service strategy was associated with lower average claim rates and costs. Companies assigned to a loss control consultant for two or more years (the “outcome group”) had an average claim rate of 1.24 per $10,000 premium, compared with a rate of 1.62 in the “initial group” and a rate of 1.60 in the “comparison group.” The average severity-claim rate of the outcome group was 0.32, compared with the initial-year and comparison-group means of 0.48 and 0.46, respectively. The average medical-only claim rate was 0.92, compared with the initial- and comparison-group means of 1.14 and 1.14. The outcome group's average loss ratio was over 10% lower than that of the initial and comparison groups. Statistical analysis indicated that differences among the groups' claim rates and severity-claim rates were [ F=(2,206) 4.938, P=0.008] and [ F=(2,206) 8.208, P