Ernie Williams, Ltd. Slashes its Workers Comp Expenses

The client

Ernie Williams, Ltd., is a thriving business operating in Algona, Iowa, and north central Iowa. Founded in 1950 by Ernie Williams, the company today is led by president Jim Wilcox and counts a successful group of John Deere lawn and farm implement dealerships and Harley-Davidson motorcycle dealerships among its holdings. Together, the businesses employ [XXX] people and are leaders in their market.

Even with everything it had going for it, Ernie Williams, Ltd., had an expensive problem to solve.

The challenge

According to Wilcox, the company was having difficulties containing its workers’ compensation premiums and was experiencing lots headaches due to an increasing MOD rate.

The MOD rate is a comparison of the number of claims one company makes against an industry average. MODs determine whether an insured will pay more or less for workers’ comp premiums.

“We were spending $60,000 more in MODs than we should have,” recalls Wilcox. “I’d rather have given that money to our employees than to an insurance company, so we were looking to reduce where we could.”

Under Wilcox’s direction, the company developed incentive programs that rewarded employees for wearing safety apparel and gear, and for minimizing workplace distractions such as using cell phones. Wilcox also relied on a detailed spreadsheet to help him understand what was causing its claims problems.

But while its insurance company applauded these efforts, the company was not seeing cost reductions. Between 2012 and 2015, the company had recorded 18 workers’ comp claims with paid time off. These worked against the company’s MOD, significantly increasing the cost of its coverage.

The solution

Ryan Smith of Kingsgate Insurance met with Jim Wilcox in 2015 and offered a different approach.

“We looked at reclassifying some items and changing other things to reduce their costs,” says Smith. “But just as important, we recommended a program of aggressively attacking and controlling their MOD costs.”

A paid time of three hours could represent expenses of $8,000 - $9,000 more in a MOD over three years.

Kingsgate focused on identifying all the activities that were driving claim frequency and severity for the company, then implemented an action plan to contain losses. Solutions included finding alternate work-related activities employees could do after rehabilitation, even if they weren’t ready to resume their primary roles. This helped the company reduce expenses for paid time off. The plan also recognized training needs and ways to ensure a safe work environment for the company—both of which helped reduce claims.

Other responsibilities Kingsgate assumed:

  • Continuously tracking and monitoring all claims at all locations
  • Serving as a liaison between the company, the insurer, and any claims servicing parties
  • Acting as the company’s advocate on disputes, issues, and problems
  • Providing claim status updates

Today, Kingsgate works directly with the company’s HR director to make sure employees get the proper coverage while minimizing the company’s expenses. Controlling costs helps the company do a better job for its employees

“We look at what can be done to get employees rehabilitated and back to work as soon as possible,” says Smith. “And we help companies like Ernie Williams minimize their risks and exposure to reduce their MOD.”

The results

According to Wilcox, Kingsgate delivered on its promises for Ernie Williams, Ltd.

“Since working with Kingsgate, we’ve gone from 18 workers comp claims to zero,” says Wilcox. “I’ve been able to put away my spreadsheet because I truly have what I wanted: control of our MOD and our comp costs. It’s no longer a concern for me.”

A review of activity since 2015 shows some of Kingsgate’s actions on behalf of the company:

  • Monitored 23 claims: $0 in wages paid by the insurance company; 3 with permanent partial disability payments
  • Provided alternative work assignments for 4 claims, assigning training videos to the employees
  • Lowered the loss reserve on a specific claim by more than $40,000
  • Resolved audit dispute resulting in a refund of more than $24,000 to the company
  • Instituted a Return to Work Program
  • Provided an Accident Investigation form to the company

The bottom line savings for Ernie Williams, Ltd.: $85,320

Wilcox said the company used to buy its workers’ comp coverage through its property and casualty provider, and while the other insurance company was reputable, its approach was reactive. Wilcox says it’s different working with Kingsgate.

“Since we signed with Kingsgate, we just haven’t had lost time,” says Wilcox. “They deliver on all they promise. They’re proactive—and that makes all the difference.”

As far as referring Kingsgate to others, Wilcox is ready to receive the call.

“Kingsgate does what they say they’ll do,” he says. “There are few opportunities that you can look back on and smile about—and our relationship with Kingsgate is one of those.”

 

 

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