June 9, 2025 • 34 mins
Late-reported workers' compensation claims cost 45% more than those reported promptly – a startling statistic that reveals how critical timing can be when managing your company's experience modification factor. This hidden multiplier determines whether your business pays more or less for workers' comp insurance and, for contractors especially, can determine whether you qualify for jobs at all.
Jeremy Morrison, Director of Underwriting at Berkeley Industrial with 20 years in workers' compensation, breaks down the complex world of E-mods with refreshing clarity. He explains how the classification system uses three years of historical data to compare your company's performance against similar businesses in your industry. The resulting math produces a multiplier that can significantly impact your bottom line – particularly as your business grows.
We tackle common misconceptions about claims management, including why paying medical-only claims out-of-pocket often backfires financially. Jeremy explains how these claims are heavily discounted in the E-mod calculation and why prompt reporting nearly always saves money in the long run. We also explore why the system penalizes frequency more than severity, capping the impact of any single large claim on your rating.
Perhaps most valuable is our discussion about partnership. The strongest workers' comp programs emerge when claims adjusters, underwriters, risk management specialists, and business owners communicate openly about goals and challenges. When everyone understands how their role impacts the others, better outcomes naturally follow. For workers' compensation success, we truly believe that teamwork makes the dream work.
Think differently, care deeply, and discover how proper claims handling can transform your experience modification factor from a mysterious penalty into a competitive advantage. Subscribe, leave a review, and join us every two weeks for more insights that help you protect what matters.
Season 9 is brought to you by Berkley Industrial Comp. This episode is hosted by Greg Hamlin.
Visit the Berkley Industrial Comp blog for more!
Got questions? Send them to marketing@berkleyindustrial.com
For music inquiries, contact Cameron Runyan at camrunyan9@gmail.com
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Greg Hamlin (00:11):
Hello everybody and welcome to Adjusted.
I'm your host, greg Hamlin,coming at you from beautiful
Birmingham, Alabama, and with metoday is our special guest,
jeremy Morrison, director ofUnderwriting.
Jeremy, if you could introduceyourself to everyone.
Jeremy Morrison (00:29):
Yeah, hi.
Good morning, thanks, greg.
I am, as you said, jeremyMorrison, director of
Underwriting at BerkeleyIndustrial.
I've been with BerkeleyIndustrial going on six years in
July and have been in theworkers' compensation space for
about 20 years, believe it ornot.
Greg Hamlin (00:46):
It's amazing how time flies right.
Yes, it is.
I was just telling my wife wewent out last night for ice
cream and I was telling her,like we were talking about AI,
and I said people are nevergoing to believe that when I
started in claims 20 years ago,we still had paper files and we
had walls of files that wepulled back and forth to like
(01:07):
yeah, like that's just like mindblowing and I'd have to hand
type notes to the file,otherwise we'd have to go pull
the paper file.
So the world's definitelychanging Absolutely.
Jeremy Morrison (01:17):
Yeah, no, I'm right there with you.
Greg Hamlin (01:19):
Well, one of the things I thought was interesting
we're going to be talking todayabout experience modifications
the myths, the facts and thesolutions.
But one things I thought wasinteresting we're going to be
talking today about experiencemodifications the myths, the
facts and the solutions, but onething I thought was interesting
as we go into this is that, asI was doing some research on
this topic, that claims that arelate reported in the fourth or
fifth week following an injuryare actually 45% more expensive
(01:44):
than those reported in the firstweek.
So I thought that was aninteresting fact, and, as we go
into this, I think we're goingto get to the why behind some of
that.
So I thought first though,jeremy, I think we've had you on
before, but I would still loveto hear and remind our listeners
about how you got into theindustry.
Yeah, yeah absolutely Well.
Jeremy Morrison (02:01):
I was fortunate enough to have a family
connection that was involved ina small workers' compensation
carrier when I was in highschool and college and started
doing some internship work forthem in the claims department.
When I graduated college I wasable to join their team as an
associate underwriter and havebeen in underwriting ever since.
(02:22):
So it was really through thegood fortune of a family
connection that kind of got mestarted in the insurance space.
I would not have thought ofinsurance really as a career
when I was younger, butcertainly glad for that good
fortune and very, very gratefulfor the opportunity and it's
been a very nice career.
Greg Hamlin (02:41):
That's awesome.
So, if you don't mind me asking, jeremy, when you went to
school, what were your thoughtsat the time you were in college,
of where you were going to gowith your career?
Jeremy Morrison (02:51):
Yeah, I wasn't sure, man.
I just really wanted to land ajob.
I was thinking about perhapsgoing back to graduate school,
but I just felt like I needed toget a job and start paying off
student loans and just reallywanted to just get hired
somewhere, anywhere, and thatwas my focus.
I was just looking for anopportunity to go anywhere and I
(03:12):
was living in North Carolina atthe time, going to school there
, and drove back to Pennsylvaniafor the job interview.
It started the next day and Iwas just really grateful to have
a job.
But yeah, I wouldn't havethought of insurance as a career
Wasn't on the foremost of mymind.
I just really wanted to get ajob and start working.
Greg Hamlin (03:32):
Totally can relate.
I actually very similar path inthat I was a criminal justice
major and was planning to go tolaw school.
That was the thought process atthe time.
And then, while I was doing myundergrad work, I met my wife.
We got married, had a babywhile I was still finishing up
school, so then it was time toget a job.
I was like man.
(03:52):
I got a daughter to feed and mywife wants more and so I need to
go figure this out.
And knew nothing aboutinsurance, but it's been a great
career over the last 20 years,so definitely for our listeners.
Just would encourage you likethis is one of those industries
that does need more talent and Ithink we don't always do a good
job of just getting people intothe field, so I recommend a
(04:14):
friend.
Jeremy Morrison (04:14):
Absolutely yeah .
There's a desperate need oftalent in all disciplines.
I believe yeah.
Greg Hamlin (04:22):
So, jeremy, when I used to do career fairs it's
been a while since I've been toone, but we would often recruit
for both claims and underwritingand I remember having people
who are English majors coming upto me saying, oh, I'm such a
great writer, this sounds great.
And they didn't reallyunderstand what underwriting is.
Not that they couldn't havedone well at it.
Yeah, for those who might notknow what underwriting is, maybe
they're on the claim side orthey have limited insurance
(04:43):
experience Can you talk a littlebit about what underwriting is
and why it's even called that?
Jeremy Morrison (04:48):
Yeah, Well, I think I have to go back to the
early days in London, the firstinsurance policies that were
created.
But we're not going to get intothe history of underwriting, I
don't think.
But the name underwriting kindof derives from that origin a
long, long time ago from what Irecall.
But the underwriter's role isreally to price the risk, it's
to assess the risk and determinean acceptable premium for the
(05:11):
risk that we're assuming.
And we're in the workers' compspace.
But underwriters are needed inall financial fields where
there's some risk that's beingassumed.
And for us specifically, wehave to assumed.
And for us specifically, wehave to evaluate a business and
their management, their culture,their employees, their loss
experience, the jurisdictionsthey work, the characteristics
(05:34):
of what they're doing, whetherthey're ground level, in
vehicles, at heights,underground, in ditches or
trenches, if they climb, if theyhave exposure to chemicals or
dust or other things that maycause loss.
But it's really assessing allaspects and facets of the risk
(05:56):
and then trying to use thatinformation to come up with a
premium that will support lossesprofitably over time.
We won't stay in business if wedon't make the underwriting
decisions.
We have to be able to cover ourliabilities and our expenses
and that's very, very important.
So I think underwriting is alittle bit more art than science
(06:18):
, but it's interesting to talkabout a misconception about.
You know, I'm an English majorand I like to write.
You know we don't writecreative stories in underwriting
and we're not writing essays orpapers or anything like that.
But there is an element tobeing able to communicate and
articulate that is really reallyimportant and I think that
(06:38):
communication is a critical,critical skill and can make an
underwriter very effective ifthey're a good communicator, and
that's both verbally andwritten.
A lot of our work is donethrough the phone, some via
email, you know, in text, butyou got to be able to listen and
you got to be able tocommunicate.
So there is an element tocommunication and writing that
(07:00):
is inherent to underwriting, Ithink.
Greg Hamlin (07:01):
I couldn't agree more and I actually think, as we
move forward over the nextdecade, communication skills are
going to be one of the mostvaluable tools for young,
talented people looking to enterany industry.
Really, as we look at how muchAI is going to automate so many
things that wereprocess-oriented.
So from there, one of thethings that we hear a lot or I
(07:25):
do, at least on the claim side,and I think even if you turned
your TV on and you saw insuranceads for personal lines like
house and auto, people arealways concerned about price.
They're always concerned aboutwhat their rates are going to be
and nobody wants their rates togo up.
And I know in the world we'rein that in workers comp that's
their experience mod or theirear E mod.
And I know in the world we'rein that in workers' comp that's
(07:46):
related to their experience modor their e-mod.
And I wanted you if you couldjust talk a little bit about
what that is and how thatimpacts an insured's rates For
sure.
Jeremy Morrison (07:58):
For sure.
The experience modificationfactor is a component of the
pricing.
Experience modification factoris a component of the pricing.
It's usually thought to besomething that the insured can
control to an extent toinfluence their pricing up or
down.
There's a number of states thathave independent bureaus that
publish experience mods forbusinesses and then the NCCI is
(08:20):
a group of many states that alsopublishes experience mod
factors for businesses.
So larger risks.
Generally speaking, if you'rederiving $10,000 or $15,000 of
premium on your policy, you'regoing to be considered large
enough to be experience ratedand the rating bureaus or NCCI
(08:40):
will take your experience fromthree years, not including the
most recent year your lost data,the losses that you've had and
also your payroll data, and runit through a formula and come up
with a modification factorthat's applied to the policy.
Of course, if it's over 1.0,that's a debit to the policy and
(09:04):
it will add more premium, andif it's under 1.0, it's a credit
and will subtract premium fromyour policy.
So it is a factor of thepricing, but it's not the only
thing that matters.
Carriers have a lot of tools attheir disposal to assess and
price a risk and the rates andthe lost costs are part of that
pricing.
The experience mod is part ofthat pricing.
(09:26):
Underwriters typically haveschedule rating right.
If you'd use 1.0 as a baseline,that's kind of the big part of
(09:48):
the bell curve and risks thatare above a one are considered
to have performed maybe a littleless satisfactory than risks
that have performed with a modunder 1.0.
So you kind of get compared torisks that are in your class of
business and the data sets forinsurance you're being compared
with other risks that are inyour class of business and the
data sets for insureds you'rebeing compared with other risks
(10:08):
that are similar to you.
But that's kind of theexperience mod component to the
rating.
And they often do get a lot ofattention from insureds because
larger insureds can besignificantly impacted by their
modification factor going up orgoing down depending on how
their historical losses havebeen.
Greg Hamlin (10:28):
So if I'm following you, say I'm a roofer or I have
a roofing company and I've got,you know, several hundred
employees, I'm big enough that Ihave one of these experience
mods how far back, first of all,does that go?
You might have mentioned thishow many years back are they
looking at my loss history?
And the other question that Ihave is let's say that I'm
(10:51):
completely average, I'm at a 1.0as far as that history goes,
and maybe I'm paying 20,000 inpremium.
If I'm completely average, ifI'm paying 20,000 in premium,
how far back does that go?
And then kind of talk about ifI'm worse than average or better
than average, how that couldchange that number with the EMOD
(11:11):
Sure.
Jeremy Morrison (11:13):
Okay, well, in your scenario as the roofing
contractor, the rating bureausare going to go back three years
, not including the most recentyear.
So for 2025, payroll data isgoing to be used for 2023, 2022,
and 2021.
Your audit's not going to havebeen completed for 2024, most
likely and the losses that areincurred for 2024 are going to
(11:34):
be considered too new or toogreen to be evaluated fully and,
frankly, the experience mod for2025 is published several
months in advance of youreffective date, so that's
another reason why the mostcurrent year's data is not used.
So 23, 22, and 21, right, thelast three years, not including
the most recent year, will beutilized payroll data and loss
(11:56):
data.
And in the scenario youdescribed, the premium is
$20,000 and you have a 1.0experience not going to impact
that pricing for that premiumreally at all.
But if you've had some lossesin the rating period that you're
being evaluated for and yourexperience mod goes up to a 1.10
(12:18):
, like a 10% surcharge or a 10%debit so that premium that was
$20,000 would now be 10% higher.
On the other side of it, ifyour losses have been better
than average and your experiencemod is published at a 0.9,
you'll have a 10% discountapplied to your rating.
(12:39):
So that $20,000 premium you maynot think well, that's not a
ton of premium to go up 10% ordown 10%.
But the larger the risk getsand the more premium that is
involved in the rating,obviously the more of an impact
and the more significant a debitor credit mod is to the insurer
.
Greg Hamlin (12:59):
Absolutely Well, and if I'm a small business
owner, a couple thousand dollarsis a big deal to me.
Jeremy Morrison (13:02):
Correct, yes, I think all small businesses
would agree with that for sure.
Greg Hamlin (13:07):
So I could definitely see that.
So talk to me a little bitabout I mean.
Obviously there's differenttypes of claims that go into
those losses.
There's med only claims andthen there's lost time claims,
or we call them indemnity claims, where the injured worker is
actually off work receiving wageloss, and the other instance,
when it's a med only file, maybethey go to the doctor but
they're back to work and it'smore of a treat-and-release
(13:29):
situation.
How do those impact theexperience month differently?
Jeremy Morrison (13:34):
Yeah, the med-only claims that are smaller
and don't have lost timeassociated when they are
reported to NCCI or other staterating bureaus.
I'm going to be very generaland broad here because there's a
lot of nuance.
So in general, medical-onlyclaims are discounted by the
rating bureaus by variouspercentages.
(13:55):
It just kind of depends on whatstate you're in.
But the cost of themedical-only claim if you had a
$1,000 claim, it's going to bediscounted.
If there was no lost time andit hits your experience model
worksheet, it's going to bediscounted.
If there was no lost time andit hits your experience model
worksheet, it's going to reflecta value that is not the same
value on your loss run.
It's going to be discounted.
(14:16):
And that's something that Ithink NQCI utilizes as a way to
keep mods from inflating toomuch in the face of medical cost
inflation.
Lost time claims are generally alittle bit more expensive and
are probably going to have ahigher claim dollar because not
only do you have to providemedical treatment for the
employee and make them whole,but there may be some time off
of work, right, they may be outof work for a couple of days or
(14:39):
a couple of weeks or months,depending on the nature of the
injury and while the medicalcosts and things of that nature
will be discounted, it's stillgoing to be a sizable claim and
so most state bureaus and NCCIwill cap the maximum value of a
(15:00):
loss on the experience modworksheet and every year that
changes.
That changes a little bit yearto year based on what the
actuaries do.
But for instance, if you have a$50,000 claim that was a lost
time claim for one of youremployees, that value is going
to be capped on the modworksheet and it's, I think,
(15:20):
right now again depending on thestate, maybe $18,500 or
$19,000,.
There's a claim cap, againbased on different states.
People that are interested canlook that up on MCCI or the
various state bureaus.
But the capping of losses againis designed to help keep the
(15:40):
mods from swinging toosignificantly just because of
one claim.
Greg Hamlin (15:46):
Those are really important points because I think
this is one of the pitfalls wesometimes see on the claim side
is there's a thought process.
And so I'll go back in time to16-year-old Greg, who I wouldn't
trust with anything.
But my first car was a minivanwith wood paneling.
It was really cool, ahand-me-down from my parents.
Minivan with wood paneling itwas really cool, a hand-me-down
(16:09):
from my parents.
And one night I went to watch amovie with a friend who lived in
an apartment and I was a newdriver and I backed out of this
carport and I don't know how Idid this, but I somehow, backing
out, took out the driver's sidedoor with a pillar on this
carport and so, of course, youknow, cracks the window, breaks
up the door, and I'm telling mymom about this and she's like
(16:31):
not believing me.
But that's exactly whathappened.
And we drove there the next dayand of course there's nothing
like the carport's fine, youcan't even tell anything
happened and my car is likemessed up.
So I told my mom about it andshe's like well, we're going to
go to a junkyard and get a doorbecause I don't want to report
this to the insurance carrierthat's going to make our
insurance go up.
So for the rest of my highschool career I had this door
(16:55):
that was a different color thanthe rest of the van as a
reminder of being a dumbsix-year-old driver.
But I think sometimes, when wetalk to our insureds, there's a
misconception that if I pay forthat med only claim myself and I
don't report it to the carrier,that's going to keep my
insurance rates down, and whatwe see on the claim side is that
(17:15):
often is a pretty bigmisconception, because if they
were to go to the ER and thatbill's $2,500 for I don't know,
a laceration where they get somestitches, by the time we would
pay the PPO fee and everythingelse associated with our
discounts and the fee schedule,that bill might be $800.
(17:35):
And then, if you take intoaccount NCCI's rating right and
how they're discounting, it mayimpact them half of that by the
time.
It's all done for a med onlyfile, and so what ends up
happening, though, is, in thoseclaims where it's more
significant and we don't knowabout it.
Going back to that initial fact, what happens when a claim's
late reported in the fourth orfifth week?
(17:57):
Sometimes we see those claimsget off the rails, and so I
think that's a really importantthing to educate those who are
listening about is there reallyis value in just getting those
met-onlys reported to us,because it's not going to really
make that huge of a differenceon your e-mod in the grand
scheme of things and it's goingto actually save you money
(18:17):
probably in the long run.
Jeremy Morrison (18:20):
Would you agree , jeremy?
And contractors in particularare in a tough spot because a
lot of times to get on job sitesor to be used as a
subcontractor or a primecontractor, you've got to show
that your experience mod isunder a 1.0 because that's
considered safer and better thanaverage.
(18:42):
So contractors are in a toughspot and a lot of times this
question comes up withcontractors in particular and we
insure a lot of contractors.
But I think the points you'remaking are very, very good
points.
You started this call with kindof that fact about Claims that
are reported late generally aresignificantly more expensive
(19:03):
than claims that are reportedtimely within the first day or
the first couple days.
I certainly am empathetic tocontractors that really have to
manage that experience mod andkeep it under a 1.0 to keep
their jobs and their livelihoodslined up.
I totally get that.
However, I also do agree thatreporting claims reporting all
(19:24):
claims timely is a best practice.
You know.
I just think that's the bestway to make sure that things
don't become that a small youknow, a small issue does not
become a larger significantissue for the insured down the
road and again everybody's gotto manage their business
differently.
But I agree.
If you're reporting claimsbased on fee schedules, there's
(19:45):
going to be discounting of aclaim.
Ncci is going to discount theclaim even further in all
likelihood, and what might havebeen a few thousand dollars will
show up on the mod worksheettypically as significantly less.
Ncci, the actuaries, penalizefrequency and so if you have a
lot of claims, even if they're alot of small claims, the mod
formula is harsher for claimfrequency than it is for one
(20:11):
large claim because of thecapping.
The belief there is that riskwith many claims is unsafer than
a risk with one claim thathappened to be a large claim of
significance.
And you know we could debatethose points and talk about you
know if in fact that is or isnot valid.
But that's what the actuariesdo.
That's the rationale behind it.
(20:32):
But there is mechanisms inplace to keep those costs very
low on the bottom work sheet.
Greg Hamlin (20:37):
And I think, going back to everything you just said
, that's where teamwork makesthe dream work.
If dream work, you really wantto have a partnership with your
carrier and you want to makesure that, if you're a
contractor and you have certaingoals that you're trying to
achieve, that you're workinglockstep with your carrier, with
your claims team, with yourunderwriter, with their safety
department, because that's whenthe really good results happen.
(20:58):
And I can tell you from myexperience, when things do get
off the rails, it's oftenbecause there's not good
communication with all thoseparties on what the goals are
and how we can work together toachieve them.
So I think you hit on someimportant things.
There's a lot pulling at aninsured to try to manage their
risk and I think this whole EMODprocess is very confusing If
(21:22):
this isn't what you do all daylong.
Trying to understand this whileyou're running a small business
is hard From your end.
I'm going to switch gears alittle bit and talk about
reserving.
This is more of a claims thing.
How does accurate reservingimpact an underwriter and how
does not getting reserves uptimely impact what your team's
trying to do?
Jeremy Morrison (21:40):
Well, the reserves when we're looking at a
risk, whether it's a piece ofnew business or whether it's a
renewal.
If there's open claims thathave a reserve posted, that
reflects what the claimprofessional and their
management team believes isgoing to be the ultimate value
of that claim or the ultimatecost of that claim.
(22:01):
Again, I think that reservingclaims is a really difficult
science or a difficult art toreally master, but the claim
reps have a lot of experience inhow much certain treatments or
procedures are going to cost.
They're experts in this is howlong they're going to be out of
work until they're able to goback to work.
So we need to allocate thismuch for their payment or their
(22:22):
paychecks in lieu of working,and it reflects what the final
cost of a claim is likely to be.
It helps us price the riskbecause we're trying to
determine what the premium forthis year is going to be, and
one element of that is what havethe losses been in the past
five or seven years?
So, if the reserve is accurateor close to accurate, that kind
(22:47):
of helps us get into an areawhere we can see, based on the
last couple of years, the last60 months or 72 months.
This is what we think we'regoing to need for the next 12
months If the reserves are notadequate, if the claim isn't
reserved correctly or doesn'thave any reserves.
That can be a little bit trickyIf you're working on an account
(23:10):
that you wrote coverage on andyou look at their loss
experience on the mod worksheetin 2025 and you see a claim from
2022 developed and, and lastyear when you evaluated the risk
it was a $2,000 claim on thelast run in the mod sheet and
then this year at renewal it's a$100,000 claim.
(23:33):
Boy, that's a tough thing tokind of evaluate because
somebody thought it was a notonly claim and actually is much,
much more significant.
So maybe that was the claimthat would have been kind of a
late report, or maybe thecompany didn't have good
information or who knows whatthe circumstances could be.
But we do see that actuallymore than you'd believe in
underwriting and it does makethe pricing a little bit tricky
(23:55):
because we have to say well,what happened on this claim.
On the last run it says it wasa minor issue and on the mod
sheet this year it's reserved at$100,000.
Something must have happened.
Do we have our hands aroundwhat the exposures are?
So it does lead to somequestions and it kind of leads
to some pricing steps for thecarrier.
But yeah, reserving practicesare critical and really do
(24:17):
impact kind of how the pricingis going to be for an
underwriter.
Greg Hamlin (24:20):
So, jeremy, I've had that exact circumstance
happen in a prior life.
I've been in claims for a while.
This isn't a recent example,but we had a injured worker I
think it might have beensomething minor like came in as
like a shoulder sprain orsomething like that and
eventually that injured workerneeded to have surgery and the
employer was one of theseamazing employers that had
(24:43):
modified duty.
The guy was family.
They got him in to work rightaway, so there really wasn't any
lost time on that claim.
But in that particular statethere was still an impairment
rating that was due, which fallsunder the indemnity category
along with lost time, whichmakes it considered a lost time
claim, even though he hadn'tmissed any days from work.
Really, the adjuster justdidn't think about that and two
(25:06):
years later they put this largereserve up for his settlement
for his impairment rating andthat really frustrated the
underwriter because they hadalready quoted the account
without that information.
So I just put that story outthere as a cautionary tale for
adjusters that what they do whenthey're reserving a file really
does impact what theunderwriters are trying to do on
(25:28):
your side.
So I appreciate you spendingsome time on that to explain
that and I want to take that astep further than you know.
I know some companies arereally large and claims and
underwriting maybe don't talk asmuch as they should, but why do
you feel like that?
Partnership between claims andunderwriting is important?
That's critical.
It's critical.
Jeremy Morrison (25:48):
Underwriting companies' profitability is not
just on the underwriting team,right, it's on everybody.
It's everybody working togetherand claims is a big part of
that.
Many, many times.
The claims team and the riskmanagement team are really the
eyes and ears for us.
We don't often see a lot of ourinsureds.
We don't talk to our insureds,we're not really engaging with
(26:11):
our insureds and we rely on ourrisk management team.
Have a client or an insured thatmaybe isn't as cooperative as
we'd like, we feel like they'rehiding something or just not
being forthright.
That's good information for usto know.
(26:31):
It's probably not a greatpartnership then for our company
and that insured and thankfullythat hardly ever happens.
But being able to communicatewith our claims team on a
regular basis before ourrecording today I got a note
from one of our adjusters onthat very thing, on something
that one of our insured needed,and I just don't think that
(26:53):
happens at a lot of places whereclaims and underwriting are
separate silos and there'sreally not a unified
togetherness about servicing apolicy.
So, yeah, communication onwhat's happening with accounts
and if there's any challengesthat claims is experiencing and
needs, those things are criticalto help keep the policy going
(27:15):
smoothly.
So I can't stress that enough.
Communication is criticalbetween disciplines.
Greg Hamlin (27:21):
And then let's take it a step further.
Jeremy, I know you and I workin a specialty niche in workers'
comp where we ensure somepretty difficult risks, so we're
probably built a littledifferent than some of our
competition out there.
What are some of the solutionsthat we offer to the marketplace
that maybe others don't?
(27:41):
Tools that we can help them asfar as their e-mod goes, things
that we can do to really helpthem with their business.
Jeremy Morrison (27:50):
Yeah.
Well, I think every carrier issimilar in a lot of ways and
there's a lot of good peoplethat work at a lot of great
underwriting companies.
There's no doubt about that.
I think one of the things thatmakes Berkeley Industrial
special and a great solution forinsureds and the agents and
brokers that represent us isthat we are very agile and very
(28:13):
nimble.
Right, we have a veryresponsive team that is here to
help.
I think our risk managers aresome of the finest that you can
find anywhere.
There's a lot of good riskmanagement professionals and
workers' compensation.
Our guys are right up there.
They're all experienced in thefield.
They have industry experiencebefore they've come to us on the
(28:33):
carrier side and they reallytry to work collaboratively with
our insurers to help make theirprograms better and safer in a
realistic fashion.
Right, in a fashion that is notmicro ticky-tack,
inspector-type, checklist-typeof consulting.
(28:55):
It's a very partnership-heavy.
How can we collaborate to helpwith the realities of what you
guys are insured, what they do?
Likewise, I think our claimsteam is really special, because
the claims team that you built,greg, are really experienced
professionals who do a fantasticjob.
(29:17):
You have built the department tohave folks that have, I would
call, industry lows in terms ofwhat their desk claim count is
is, and that's on purposebecause, as we mentioned earlier
, we don't necessarily write alot of companies that have a lot
of claims in terms of thefrequency with which they have
(29:40):
claims Our customers.
When they have claims, they'retypically lost time and
sometimes they're a little bitdifficult or challenging because
of the nature of what we insure.
So our claims team, which youbuilt strategically, are able to
respond and provide a bettercustomer service experience
(30:01):
because they're not trying tomanage hundreds of claims at the
same time and bouncing fromfile to file.
They can really work with ourinsureds, I think, in a little
more collaborative fashion, andthose factors are significant
with the space that we're in.
So again, I don't want to knockany other company or carrier.
(30:22):
There's a lot of wonderfulworkers' comp carriers that do a
great job, but I think ourfolks are top notch as well.
Greg Hamlin (30:29):
I agree.
I agree with everything yousaid there.
I think we do a lot of thingsthat are pretty special.
I've worked a number of placesand in good places, but the
underwriting team, the claimsteam and the risk management
team really are in lockstep andI had our attorney in the office
last month, does a lot of workfor us and one of the things he
(30:49):
had told me he's like I have myassociates handle some of my
other accounts, but I alwayshandle yours because your people
are fantastic to work with andI don't have to pull them
through the claim.
They're working lockstep withme and I think, if you went
around and looked at whetherit's our risk management team or
underwriting team, thatengagement is where we stand out
and that personal touch and theability to really answer the
(31:12):
phone and solve problems sets usapart a little bit from others
that are out there.
Jeremy, I really appreciatehaving you on this episode.
I think this is always helpfuljust to revisit every so often,
because it is confusing.
One thing I've really beentrying to focus on in my own
life, and even with the podcastover the last couple of years,
is gratitude.
I felt like we live in a worldwhere there is a lot of noise,
(31:36):
and I think there could be a lotmore happiness if we focus on
the things that are mostimportant and the things that
we're really grateful for, andit's something that I've been
working towards.
So I would love it today if youcould, jeremy, and it doesn't
have to be work-related or itcan be, but what's something
you're grateful for.
Jeremy Morrison (31:53):
Well that's wonderful to ask and I
appreciate it, but I'm going tostay right where we're at and
I'm extremely grateful for thework I do.
I'm grateful to work for WRBerkeley and Berkeley Industrial
.
We've got a fantastic team andI'm probably one of the you know
(32:14):
maybe not a lot of people thatwake up every day and love their
job, love going to work, but Iabsolutely do.
We have fantastic co-workers.
As you know, we work with a lotof great people.
Yeah, very, very grateful tohave the opportunity to work
here.
It's awesome.
Greg Hamlin (32:40):
Well, I'm going to hop on that same bandwagon,
Jeremy.
This last week I went throughsome challenging stuff where I
had to.
It's awesome thing thatnormally I would be worried
about was taken care of, and weeven had some really challenging
losses that came in thateverything was covered and I
felt supported.
I felt appreciated and gratefulthat I get to work with people
(33:03):
who really not only do I callthem my colleagues, but they're
my friends, and that means a lotto me.
So I'm going to stay in thatsame lane with you and certainly
encourage our listeners to doright, think differently and
don't forget to care.
And like to also encourage you.
(33:23):
If you haven't, please go oniTunes or Apple or wherever your
streaming platform is.
Give us a five-star rating,Leave us some comments so we can
help some other people find thepodcast.
We feel like we're doing somegood things and putting some
good vibes out in the universe.
We'd love this to reach someothers.
So if you can, please do that.
And then we encourage you tofollow us and look for our
(33:44):
episodes to release every twoweeks, as they do on Monday.
Take care everybody.
Hello everybody and welcome to Adjusted.
I'm your host, greg Hamlin,coming at you from beautiful
Birmingham, Alabama, and with metoday is our special guest,
jeremy Morrison, director ofUnderwriting.
Jeremy, if you could introduceyourself to everyone.
Jeremy Morrison (00:29):
Yeah, hi.
Good morning, thanks, greg.
I am, as you said, jeremyMorrison, director of
Underwriting at BerkeleyIndustrial.
I've been with BerkeleyIndustrial going on six years in
July and have been in theworkers' compensation space for
about 20 years, believe it ornot.
Greg Hamlin (00:46):
It's amazing how time flies right.
Yes, it is.
I was just telling my wife wewent out last night for ice
cream and I was telling her,like we were talking about AI,
and I said people are nevergoing to believe that when I
started in claims 20 years ago,we still had paper files and we
had walls of files that wepulled back and forth to like
(01:07):
yeah, like that's just like mindblowing and I'd have to hand
type notes to the file,otherwise we'd have to go pull
the paper file.
So the world's definitelychanging Absolutely.
Jeremy Morrison (01:17):
Yeah, no, I'm right there with you.
Greg Hamlin (01:19):
Well, one of the things I thought was interesting
we're going to be talking todayabout experience modifications
the myths, the facts and thesolutions.
But one things I thought wasinteresting we're going to be
talking today about experiencemodifications the myths, the
facts and the solutions, but onething I thought was interesting
as we go into this is that, asI was doing some research on
this topic, that claims that arelate reported in the fourth or
fifth week following an injuryare actually 45% more expensive
(01:44):
than those reported in the firstweek.
So I thought that was aninteresting fact, and, as we go
into this, I think we're goingto get to the why behind some of
that.
So I thought first though,jeremy, I think we've had you on
before, but I would still loveto hear and remind our listeners
about how you got into theindustry.
Yeah, yeah absolutely Well.
Jeremy Morrison (02:01):
I was fortunate enough to have a family
connection that was involved ina small workers' compensation
carrier when I was in highschool and college and started
doing some internship work forthem in the claims department.
When I graduated college I wasable to join their team as an
associate underwriter and havebeen in underwriting ever since.
(02:22):
So it was really through thegood fortune of a family
connection that kind of got mestarted in the insurance space.
I would not have thought ofinsurance really as a career
when I was younger, butcertainly glad for that good
fortune and very, very gratefulfor the opportunity and it's
been a very nice career.
Greg Hamlin (02:41):
That's awesome.
So, if you don't mind me asking, jeremy, when you went to
school, what were your thoughtsat the time you were in college,
of where you were going to gowith your career?
Jeremy Morrison (02:51):
Yeah, I wasn't sure, man.
I just really wanted to land ajob.
I was thinking about perhapsgoing back to graduate school,
but I just felt like I needed toget a job and start paying off
student loans and just reallywanted to just get hired
somewhere, anywhere, and thatwas my focus.
I was just looking for anopportunity to go anywhere and I
(03:12):
was living in North Carolina atthe time, going to school there
, and drove back to Pennsylvaniafor the job interview.
It started the next day and Iwas just really grateful to have
a job.
But yeah, I wouldn't havethought of insurance as a career
Wasn't on the foremost of mymind.
I just really wanted to get ajob and start working.
Greg Hamlin (03:32):
Totally can relate.
I actually very similar path inthat I was a criminal justice
major and was planning to go tolaw school.
That was the thought process atthe time.
And then, while I was doing myundergrad work, I met my wife.
We got married, had a babywhile I was still finishing up
school, so then it was time toget a job.
I was like man.
(03:52):
I got a daughter to feed and mywife wants more and so I need to
go figure this out.
And knew nothing aboutinsurance, but it's been a great
career over the last 20 years,so definitely for our listeners.
Just would encourage you likethis is one of those industries
that does need more talent and Ithink we don't always do a good
job of just getting people intothe field, so I recommend a
(04:14):
friend.
Jeremy Morrison (04:14):
Absolutely yeah .
There's a desperate need oftalent in all disciplines.
I believe yeah.
Greg Hamlin (04:22):
So, jeremy, when I used to do career fairs it's
been a while since I've been toone, but we would often recruit
for both claims and underwritingand I remember having people
who are English majors coming upto me saying, oh, I'm such a
great writer, this sounds great.
And they didn't reallyunderstand what underwriting is.
Not that they couldn't havedone well at it.
Yeah, for those who might notknow what underwriting is, maybe
they're on the claim side orthey have limited insurance
(04:43):
experience Can you talk a littlebit about what underwriting is
and why it's even called that?
Jeremy Morrison (04:48):
Yeah, Well, I think I have to go back to the
early days in London, the firstinsurance policies that were
created.
But we're not going to get intothe history of underwriting, I
don't think.
But the name underwriting kindof derives from that origin a
long, long time ago from what Irecall.
But the underwriter's role isreally to price the risk, it's
to assess the risk and determinean acceptable premium for the
(05:11):
risk that we're assuming.
And we're in the workers' compspace.
But underwriters are needed inall financial fields where
there's some risk that's beingassumed.
And for us specifically, wehave to assumed.
And for us specifically, wehave to evaluate a business and
their management, their culture,their employees, their loss
experience, the jurisdictionsthey work, the characteristics
(05:34):
of what they're doing, whetherthey're ground level, in
vehicles, at heights,underground, in ditches or
trenches, if they climb, if theyhave exposure to chemicals or
dust or other things that maycause loss.
But it's really assessing allaspects and facets of the risk
(05:56):
and then trying to use thatinformation to come up with a
premium that will support lossesprofitably over time.
We won't stay in business if wedon't make the underwriting
decisions.
We have to be able to cover ourliabilities and our expenses
and that's very, very important.
So I think underwriting is alittle bit more art than science
(06:18):
, but it's interesting to talkabout a misconception about.
You know, I'm an English majorand I like to write.
You know we don't writecreative stories in underwriting
and we're not writing essays orpapers or anything like that.
But there is an element tobeing able to communicate and
articulate that is really reallyimportant and I think that
(06:38):
communication is a critical,critical skill and can make an
underwriter very effective ifthey're a good communicator, and
that's both verbally andwritten.
A lot of our work is donethrough the phone, some via
email, you know, in text, butyou got to be able to listen and
you got to be able tocommunicate.
So there is an element tocommunication and writing that
(07:00):
is inherent to underwriting, Ithink.
Greg Hamlin (07:01):
I couldn't agree more and I actually think, as we
move forward over the nextdecade, communication skills are
going to be one of the mostvaluable tools for young,
talented people looking to enterany industry.
Really, as we look at how muchAI is going to automate so many
things that wereprocess-oriented.
So from there, one of thethings that we hear a lot or I
(07:25):
do, at least on the claim side,and I think even if you turned
your TV on and you saw insuranceads for personal lines like
house and auto, people arealways concerned about price.
They're always concerned aboutwhat their rates are going to be
and nobody wants their rates togo up.
And I know in the world we'rein that in workers comp that's
their experience mod or theirear E mod.
And I know in the world we'rein that in workers' comp that's
(07:46):
related to their experience modor their e-mod.
And I wanted you if you couldjust talk a little bit about
what that is and how thatimpacts an insured's rates For
sure.
Jeremy Morrison (07:58):
For sure.
The experience modificationfactor is a component of the
pricing.
Experience modification factoris a component of the pricing.
It's usually thought to besomething that the insured can
control to an extent toinfluence their pricing up or
down.
There's a number of states thathave independent bureaus that
publish experience mods forbusinesses and then the NCCI is
(08:20):
a group of many states that alsopublishes experience mod
factors for businesses.
So larger risks.
Generally speaking, if you'rederiving $10,000 or $15,000 of
premium on your policy, you'regoing to be considered large
enough to be experience ratedand the rating bureaus or NCCI
(08:40):
will take your experience fromthree years, not including the
most recent year your lost data,the losses that you've had and
also your payroll data, and runit through a formula and come up
with a modification factorthat's applied to the policy.
Of course, if it's over 1.0,that's a debit to the policy and
(09:04):
it will add more premium, andif it's under 1.0, it's a credit
and will subtract premium fromyour policy.
So it is a factor of thepricing, but it's not the only
thing that matters.
Carriers have a lot of tools attheir disposal to assess and
price a risk and the rates andthe lost costs are part of that
pricing.
The experience mod is part ofthat pricing.
(09:26):
Underwriters typically haveschedule rating right.
If you'd use 1.0 as a baseline,that's kind of the big part of
(09:48):
the bell curve and risks thatare above a one are considered
to have performed maybe a littleless satisfactory than risks
that have performed with a modunder 1.0.
So you kind of get compared torisks that are in your class of
business and the data sets forinsurance you're being compared
with other risks that are inyour class of business and the
data sets for insureds you'rebeing compared with other risks
(10:08):
that are similar to you.
But that's kind of theexperience mod component to the
rating.
And they often do get a lot ofattention from insureds because
larger insureds can besignificantly impacted by their
modification factor going up orgoing down depending on how
their historical losses havebeen.
Greg Hamlin (10:28):
So if I'm following you, say I'm a roofer or I have
a roofing company and I've got,you know, several hundred
employees, I'm big enough that Ihave one of these experience
mods how far back, first of all,does that go?
You might have mentioned thishow many years back are they
looking at my loss history?
And the other question that Ihave is let's say that I'm
(10:51):
completely average, I'm at a 1.0as far as that history goes,
and maybe I'm paying 20,000 inpremium.
If I'm completely average, ifI'm paying 20,000 in premium,
how far back does that go?
And then kind of talk about ifI'm worse than average or better
than average, how that couldchange that number with the EMOD
(11:11):
Sure.
Jeremy Morrison (11:13):
Okay, well, in your scenario as the roofing
contractor, the rating bureausare going to go back three years
, not including the most recentyear.
So for 2025, payroll data isgoing to be used for 2023, 2022,
and 2021.
Your audit's not going to havebeen completed for 2024, most
likely and the losses that areincurred for 2024 are going to
(11:34):
be considered too new or toogreen to be evaluated fully and,
frankly, the experience mod for2025 is published several
months in advance of youreffective date, so that's
another reason why the mostcurrent year's data is not used.
So 23, 22, and 21, right, thelast three years, not including
the most recent year, will beutilized payroll data and loss
(11:56):
data.
And in the scenario youdescribed, the premium is
$20,000 and you have a 1.0experience not going to impact
that pricing for that premiumreally at all.
But if you've had some lossesin the rating period that you're
being evaluated for and yourexperience mod goes up to a 1.10
(12:18):
, like a 10% surcharge or a 10%debit so that premium that was
$20,000 would now be 10% higher.
On the other side of it, ifyour losses have been better
than average and your experiencemod is published at a 0.9,
you'll have a 10% discountapplied to your rating.
(12:39):
So that $20,000 premium you maynot think well, that's not a
ton of premium to go up 10% ordown 10%.
But the larger the risk getsand the more premium that is
involved in the rating,obviously the more of an impact
and the more significant a debitor credit mod is to the insurer
.
Greg Hamlin (12:59):
Absolutely Well, and if I'm a small business
owner, a couple thousand dollarsis a big deal to me.
Jeremy Morrison (13:02):
Correct, yes, I think all small businesses
would agree with that for sure.
Greg Hamlin (13:07):
So I could definitely see that.
So talk to me a little bitabout I mean.
Obviously there's differenttypes of claims that go into
those losses.
There's med only claims andthen there's lost time claims,
or we call them indemnity claims, where the injured worker is
actually off work receiving wageloss, and the other instance,
when it's a med only file, maybethey go to the doctor but
they're back to work and it'smore of a treat-and-release
(13:29):
situation.
How do those impact theexperience month differently?
Jeremy Morrison (13:34):
Yeah, the med-only claims that are smaller
and don't have lost timeassociated when they are
reported to NCCI or other staterating bureaus.
I'm going to be very generaland broad here because there's a
lot of nuance.
So in general, medical-onlyclaims are discounted by the
rating bureaus by variouspercentages.
(13:55):
It just kind of depends on whatstate you're in.
But the cost of themedical-only claim if you had a
$1,000 claim, it's going to bediscounted.
If there was no lost time andit hits your experience model
worksheet, it's going to bediscounted.
If there was no lost time andit hits your experience model
worksheet, it's going to reflecta value that is not the same
value on your loss run.
It's going to be discounted.
(14:16):
And that's something that Ithink NQCI utilizes as a way to
keep mods from inflating toomuch in the face of medical cost
inflation.
Lost time claims are generally alittle bit more expensive and
are probably going to have ahigher claim dollar because not
only do you have to providemedical treatment for the
employee and make them whole,but there may be some time off
of work, right, they may be outof work for a couple of days or
(14:39):
a couple of weeks or months,depending on the nature of the
injury and while the medicalcosts and things of that nature
will be discounted, it's stillgoing to be a sizable claim and
so most state bureaus and NCCIwill cap the maximum value of a
(15:00):
loss on the experience modworksheet and every year that
changes.
That changes a little bit yearto year based on what the
actuaries do.
But for instance, if you have a$50,000 claim that was a lost
time claim for one of youremployees, that value is going
to be capped on the modworksheet and it's, I think,
(15:20):
right now again depending on thestate, maybe $18,500 or
$19,000,.
There's a claim cap, againbased on different states.
People that are interested canlook that up on MCCI or the
various state bureaus.
But the capping of losses againis designed to help keep the
(15:40):
mods from swinging toosignificantly just because of
one claim.
Greg Hamlin (15:46):
Those are really important points because I think
this is one of the pitfalls wesometimes see on the claim side
is there's a thought process.
And so I'll go back in time to16-year-old Greg, who I wouldn't
trust with anything.
But my first car was a minivanwith wood paneling.
It was really cool, ahand-me-down from my parents.
Minivan with wood paneling itwas really cool, a hand-me-down
(16:09):
from my parents.
And one night I went to watch amovie with a friend who lived in
an apartment and I was a newdriver and I backed out of this
carport and I don't know how Idid this, but I somehow, backing
out, took out the driver's sidedoor with a pillar on this
carport and so, of course, youknow, cracks the window, breaks
up the door, and I'm telling mymom about this and she's like
(16:31):
not believing me.
But that's exactly whathappened.
And we drove there the next dayand of course there's nothing
like the carport's fine, youcan't even tell anything
happened and my car is likemessed up.
So I told my mom about it andshe's like well, we're going to
go to a junkyard and get a doorbecause I don't want to report
this to the insurance carrierthat's going to make our
insurance go up.
So for the rest of my highschool career I had this door
(16:55):
that was a different color thanthe rest of the van as a
reminder of being a dumbsix-year-old driver.
But I think sometimes, when wetalk to our insureds, there's a
misconception that if I pay forthat med only claim myself and I
don't report it to the carrier,that's going to keep my
insurance rates down, and whatwe see on the claim side is that
(17:15):
often is a pretty bigmisconception, because if they
were to go to the ER and thatbill's $2,500 for I don't know,
a laceration where they get somestitches, by the time we would
pay the PPO fee and everythingelse associated with our
discounts and the fee schedule,that bill might be $800.
(17:35):
And then, if you take intoaccount NCCI's rating right and
how they're discounting, it mayimpact them half of that by the
time.
It's all done for a med onlyfile, and so what ends up
happening, though, is, in thoseclaims where it's more
significant and we don't knowabout it.
Going back to that initial fact, what happens when a claim's
late reported in the fourth orfifth week?
(17:57):
Sometimes we see those claimsget off the rails, and so I
think that's a really importantthing to educate those who are
listening about is there reallyis value in just getting those
met-onlys reported to us,because it's not going to really
make that huge of a differenceon your e-mod in the grand
scheme of things and it's goingto actually save you money
(18:17):
probably in the long run.
Jeremy Morrison (18:20):
Would you agree , jeremy?
And contractors in particularare in a tough spot because a
lot of times to get on job sitesor to be used as a
subcontractor or a primecontractor, you've got to show
that your experience mod isunder a 1.0 because that's
considered safer and better thanaverage.
(18:42):
So contractors are in a toughspot and a lot of times this
question comes up withcontractors in particular and we
insure a lot of contractors.
But I think the points you'remaking are very, very good
points.
You started this call with kindof that fact about Claims that
are reported late generally aresignificantly more expensive
(19:03):
than claims that are reportedtimely within the first day or
the first couple days.
I certainly am empathetic tocontractors that really have to
manage that experience mod andkeep it under a 1.0 to keep
their jobs and their livelihoodslined up.
I totally get that.
However, I also do agree thatreporting claims reporting all
(19:24):
claims timely is a best practice.
You know.
I just think that's the bestway to make sure that things
don't become that a small youknow, a small issue does not
become a larger significantissue for the insured down the
road and again everybody's gotto manage their business
differently.
But I agree.
If you're reporting claimsbased on fee schedules, there's
(19:45):
going to be discounting of aclaim.
Ncci is going to discount theclaim even further in all
likelihood, and what might havebeen a few thousand dollars will
show up on the mod worksheettypically as significantly less.
Ncci, the actuaries, penalizefrequency and so if you have a
lot of claims, even if they're alot of small claims, the mod
formula is harsher for claimfrequency than it is for one
(20:11):
large claim because of thecapping.
The belief there is that riskwith many claims is unsafer than
a risk with one claim thathappened to be a large claim of
significance.
And you know we could debatethose points and talk about you
know if in fact that is or isnot valid.
But that's what the actuariesdo.
That's the rationale behind it.
(20:32):
But there is mechanisms inplace to keep those costs very
low on the bottom work sheet.
Greg Hamlin (20:37):
And I think, going back to everything you just said
, that's where teamwork makesthe dream work.
If dream work, you really wantto have a partnership with your
carrier and you want to makesure that, if you're a
contractor and you have certaingoals that you're trying to
achieve, that you're workinglockstep with your carrier, with
your claims team, with yourunderwriter, with their safety
department, because that's whenthe really good results happen.
(20:58):
And I can tell you from myexperience, when things do get
off the rails, it's oftenbecause there's not good
communication with all thoseparties on what the goals are
and how we can work together toachieve them.
So I think you hit on someimportant things.
There's a lot pulling at aninsured to try to manage their
risk and I think this whole EMODprocess is very confusing If
(21:22):
this isn't what you do all daylong.
Trying to understand this whileyou're running a small business
is hard From your end.
I'm going to switch gears alittle bit and talk about
reserving.
This is more of a claims thing.
How does accurate reservingimpact an underwriter and how
does not getting reserves uptimely impact what your team's
trying to do?
Jeremy Morrison (21:40):
Well, the reserves when we're looking at a
risk, whether it's a piece ofnew business or whether it's a
renewal.
If there's open claims thathave a reserve posted, that
reflects what the claimprofessional and their
management team believes isgoing to be the ultimate value
of that claim or the ultimatecost of that claim.
(22:01):
Again, I think that reservingclaims is a really difficult
science or a difficult art toreally master, but the claim
reps have a lot of experience inhow much certain treatments or
procedures are going to cost.
They're experts in this is howlong they're going to be out of
work until they're able to goback to work.
So we need to allocate thismuch for their payment or their
(22:22):
paychecks in lieu of working,and it reflects what the final
cost of a claim is likely to be.
It helps us price the riskbecause we're trying to
determine what the premium forthis year is going to be, and
one element of that is what havethe losses been in the past
five or seven years?
So, if the reserve is accurateor close to accurate, that kind
(22:47):
of helps us get into an areawhere we can see, based on the
last couple of years, the last60 months or 72 months.
This is what we think we'regoing to need for the next 12
months If the reserves are notadequate, if the claim isn't
reserved correctly or doesn'thave any reserves.
That can be a little bit trickyIf you're working on an account
(23:10):
that you wrote coverage on andyou look at their loss
experience on the mod worksheetin 2025 and you see a claim from
2022 developed and, and lastyear when you evaluated the risk
it was a $2,000 claim on thelast run in the mod sheet and
then this year at renewal it's a$100,000 claim.
(23:33):
Boy, that's a tough thing tokind of evaluate because
somebody thought it was a notonly claim and actually is much,
much more significant.
So maybe that was the claimthat would have been kind of a
late report, or maybe thecompany didn't have good
information or who knows whatthe circumstances could be.
But we do see that actuallymore than you'd believe in
underwriting and it does makethe pricing a little bit tricky
(23:55):
because we have to say well,what happened on this claim.
On the last run it says it wasa minor issue and on the mod
sheet this year it's reserved at$100,000.
Something must have happened.
Do we have our hands aroundwhat the exposures are?
So it does lead to somequestions and it kind of leads
to some pricing steps for thecarrier.
But yeah, reserving practicesare critical and really do
(24:17):
impact kind of how the pricingis going to be for an
underwriter.
Greg Hamlin (24:20):
So, jeremy, I've had that exact circumstance
happen in a prior life.
I've been in claims for a while.
This isn't a recent example,but we had a injured worker I
think it might have beensomething minor like came in as
like a shoulder sprain orsomething like that and
eventually that injured workerneeded to have surgery and the
employer was one of theseamazing employers that had
(24:43):
modified duty.
The guy was family.
They got him in to work rightaway, so there really wasn't any
lost time on that claim.
But in that particular statethere was still an impairment
rating that was due, which fallsunder the indemnity category
along with lost time, whichmakes it considered a lost time
claim, even though he hadn'tmissed any days from work.
Really, the adjuster justdidn't think about that and two
(25:06):
years later they put this largereserve up for his settlement
for his impairment rating andthat really frustrated the
underwriter because they hadalready quoted the account
without that information.
So I just put that story outthere as a cautionary tale for
adjusters that what they do whenthey're reserving a file really
does impact what theunderwriters are trying to do on
(25:28):
your side.
So I appreciate you spendingsome time on that to explain
that and I want to take that astep further than you know.
I know some companies arereally large and claims and
underwriting maybe don't talk asmuch as they should, but why do
you feel like that?
Partnership between claims andunderwriting is important?
That's critical.
It's critical.
Jeremy Morrison (25:48):
Underwriting companies' profitability is not
just on the underwriting team,right, it's on everybody.
It's everybody working togetherand claims is a big part of
that.
Many, many times.
The claims team and the riskmanagement team are really the
eyes and ears for us.
We don't often see a lot of ourinsureds.
We don't talk to our insureds,we're not really engaging with
(26:11):
our insureds and we rely on ourrisk management team.
Have a client or an insured thatmaybe isn't as cooperative as
we'd like, we feel like they'rehiding something or just not
being forthright.
That's good information for usto know.
(26:31):
It's probably not a greatpartnership then for our company
and that insured and thankfullythat hardly ever happens.
But being able to communicatewith our claims team on a
regular basis before ourrecording today I got a note
from one of our adjusters onthat very thing, on something
that one of our insured needed,and I just don't think that
(26:53):
happens at a lot of places whereclaims and underwriting are
separate silos and there'sreally not a unified
togetherness about servicing apolicy.
So, yeah, communication onwhat's happening with accounts
and if there's any challengesthat claims is experiencing and
needs, those things are criticalto help keep the policy going
(27:15):
smoothly.
So I can't stress that enough.
Communication is criticalbetween disciplines.
Greg Hamlin (27:21):
And then let's take it a step further.
Jeremy, I know you and I workin a specialty niche in workers'
comp where we ensure somepretty difficult risks, so we're
probably built a littledifferent than some of our
competition out there.
What are some of the solutionsthat we offer to the marketplace
that maybe others don't?
(27:41):
Tools that we can help them asfar as their e-mod goes, things
that we can do to really helpthem with their business.
Jeremy Morrison (27:50):
Yeah.
Well, I think every carrier issimilar in a lot of ways and
there's a lot of good peoplethat work at a lot of great
underwriting companies.
There's no doubt about that.
I think one of the things thatmakes Berkeley Industrial
special and a great solution forinsureds and the agents and
brokers that represent us isthat we are very agile and very
(28:13):
nimble.
Right, we have a veryresponsive team that is here to
help.
I think our risk managers aresome of the finest that you can
find anywhere.
There's a lot of good riskmanagement professionals and
workers' compensation.
Our guys are right up there.
They're all experienced in thefield.
They have industry experiencebefore they've come to us on the
(28:33):
carrier side and they reallytry to work collaboratively with
our insurers to help make theirprograms better and safer in a
realistic fashion.
Right, in a fashion that is notmicro ticky-tack,
inspector-type, checklist-typeof consulting.
(28:55):
It's a very partnership-heavy.
How can we collaborate to helpwith the realities of what you
guys are insured, what they do?
Likewise, I think our claimsteam is really special, because
the claims team that you built,greg, are really experienced
professionals who do a fantasticjob.
(29:17):
You have built the department tohave folks that have, I would
call, industry lows in terms ofwhat their desk claim count is
is, and that's on purposebecause, as we mentioned earlier
, we don't necessarily write alot of companies that have a lot
of claims in terms of thefrequency with which they have
(29:40):
claims Our customers.
When they have claims, they'retypically lost time and
sometimes they're a little bitdifficult or challenging because
of the nature of what we insure.
So our claims team, which youbuilt strategically, are able to
respond and provide a bettercustomer service experience
(30:01):
because they're not trying tomanage hundreds of claims at the
same time and bouncing fromfile to file.
They can really work with ourinsureds, I think, in a little
more collaborative fashion, andthose factors are significant
with the space that we're in.
So again, I don't want to knockany other company or carrier.
(30:22):
There's a lot of wonderfulworkers' comp carriers that do a
great job, but I think ourfolks are top notch as well.
Greg Hamlin (30:29):
I agree.
I agree with everything yousaid there.
I think we do a lot of thingsthat are pretty special.
I've worked a number of placesand in good places, but the
underwriting team, the claimsteam and the risk management
team really are in lockstep andI had our attorney in the office
last month, does a lot of workfor us and one of the things he
(30:49):
had told me he's like I have myassociates handle some of my
other accounts, but I alwayshandle yours because your people
are fantastic to work with andI don't have to pull them
through the claim.
They're working lockstep withme and I think, if you went
around and looked at whetherit's our risk management team or
underwriting team, thatengagement is where we stand out
and that personal touch and theability to really answer the
(31:12):
phone and solve problems sets usapart a little bit from others
that are out there.
Jeremy, I really appreciatehaving you on this episode.
I think this is always helpfuljust to revisit every so often,
because it is confusing.
One thing I've really beentrying to focus on in my own
life, and even with the podcastover the last couple of years,
is gratitude.
I felt like we live in a worldwhere there is a lot of noise,
(31:36):
and I think there could be a lotmore happiness if we focus on
the things that are mostimportant and the things that
we're really grateful for, andit's something that I've been
working towards.
So I would love it today if youcould, jeremy, and it doesn't
have to be work-related or itcan be, but what's something
you're grateful for.
Jeremy Morrison (31:53):
Well that's wonderful to ask and I
appreciate it, but I'm going tostay right where we're at and
I'm extremely grateful for thework I do.
I'm grateful to work for WRBerkeley and Berkeley Industrial
.
We've got a fantastic team andI'm probably one of the you know
(32:14):
maybe not a lot of people thatwake up every day and love their
job, love going to work, but Iabsolutely do.
We have fantastic co-workers.
As you know, we work with a lotof great people.
Yeah, very, very grateful tohave the opportunity to work
here.
It's awesome.
Greg Hamlin (32:40):
Well, I'm going to hop on that same bandwagon,
Jeremy.
This last week I went throughsome challenging stuff where I
had to.
It's awesome thing thatnormally I would be worried
about was taken care of, and weeven had some really challenging
losses that came in thateverything was covered and I
felt supported.
I felt appreciated and gratefulthat I get to work with people
(33:03):
who really not only do I callthem my colleagues, but they're
my friends, and that means a lotto me.
So I'm going to stay in thatsame lane with you and certainly
encourage our listeners to doright, think differently and
don't forget to care.
And like to also encourage you.
(33:23):
If you haven't, please go oniTunes or Apple or wherever your
streaming platform is.
Give us a five-star rating,Leave us some comments so we can
help some other people find thepodcast.
We feel like we're doing somegood things and putting some
good vibes out in the universe.
We'd love this to reach someothers.
So if you can, please do that.
And then we encourage you tofollow us and look for our
(33:44):
episodes to release every twoweeks, as they do on Monday.
Take care everybody.
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