I was able to spend some time with a top-level loss control consultant with one of the nation’s largest brokerages recently, and asked her about current loss trends in this the shaky economy. Troubled economic times impact losses, usually increasing claims in many cases. This consultant works with some of the top governmental and private sector entities in the
On the health side of risk management, there have been increased requests for employee assistance, mainly due to stress, some no doubt brought on by financial difficulties. Many employees are concerned about job security, which is driving stress claims both in the health sector and, to some initial degree, in workers’ compensation claims. Increasingly, employees are borrowing money from their 401Ks, she said, to meet debt obligations or for every day needs.
Many laid-off employees are simply abandoning the job search and returning to school or taking any part-time employment they can find. Colleges and universities are seeing increased enrollment requests; however, many colleges recently reduced faculty and staff, so they do not have enough employees to cope with the increased demand, she said. Watch for increased workers’ compensation and other employment claims as a result, an inevitable outcome in this economic environment.
Another trend is deferring maintenance, which can be deadly if fire safety lags or tire replacement is neglected. And speaking of autos, the increased number of photo radar units operating in states like
Her retail clients have reported a sharp increase in security-related claims, because more people are shoplifting to provide for their families. Where people previously stole food, there is increased theft of medications like diapers, baby formula and other commodities. Retail stores are beefing up their security, as well. More aggressive security may mean more false imprisonment and other security-related claims, and as security employees become frustrated with increased theft, get injured trying to prevent it. To mitigate this risk, be sure that you provide new security and other retail hires with adequate training and refresher training for more experienced employees, as well.
On the workers’ compensation side, this consultant has seen a drop in lost-time injury claims because employees are simply to afraid to miss work in this economic climate. However, as layoffs loom, she expects more workers’ compensation claims to be filed pre-layoff, so as we have said before in this column, be sure any pre-layoff injury claims are thoroughly investigated.
On the property side, insurance carriers are reporting more suspicious fires as homeowners and businesses alike face foreclosures and bankruptcy. Just as troubling are little publicized suicides and act of violence when homeowners are faced with eviction. According to an online article on Alternet.com entitled, “Arson, Suicide and Murder Mark the Economic Crisis, and We’re Not Hearing About It, “There are no real counts of the many extreme acts born of the financial crisis, but assuredly other murders, suicides, self-inflicted injuries, acts of arson and of armed self-defense have simply gone unnoticed outside of economically hard-hit neighborhoods in cities and small towns across America.”
All these acts will impact risk management as we continue to weather the current economic crisis.