There's no question that an effective loss control effort is an essential step in the risk management process. All too often, risk pool management attempts to launch loss control & safety programs before substantially defining the "why" - in other words, knowing the mission of the effort, and fully understanding the business philosophy behind that mission. Therefore, it is critical that an organization "get their thinking right" before establishing a program. Every pool loss control group needs to build a framework for success and then identify the people that can help accomplish the mission. Once the loss control effort is fully mission-driven, the group must prioritize efforts and work to identify the root causes of accidents. Ultimately, loss control's task is to consistently take a slice out of the loss/claims pie.
Pooling and insurance, in general, is a financial mechanism. This mechanism is based upon a foundation of analyzing, understanding and addressing probabilities of loss. Therefore, loss control is the discipline of reducing those probabilities. It is best to keep loss control solutions simple because implementation happens across a very diverse set of public entities. While your total risk picture will be complex and involve many types of exposures, it is best to begin by focusing on three broad areas: the people (on-the-job safety), the public (liability) and the property (conservation).
The loss reduction effort will require people and tools. People are listed first for a reason as the loss control function in pools is almost entirely dependent on relationship-building. Only developing new policies or drafting procedural improvements may make you feel accomplished, but if you haven't developed a positive working relationship with both your internal and external customers, your success will be limited.
People. To carry out this mission, look to identify people with excellent character and interpersonal skills. Ideal candidates are those that can relate well with others and develop the working relationship needed to implement change in policy and behaviors. Typically, organizations try to identify loss control candidates with a particular skill set and excellent technical knowledge, but, it is more important to locate a person with good interpersonal skills and high character. Then, teach them the technical side of the industry. In other words, you're not looking for inspectors; you're looking for people who desire to be a valued resource to your internal and external customers. The best candidate would be someone with excellent interpersonal skills and vast technical knowledge, but if you can only find one set of skills, make sure you err on the interpersonal side.
Tools. Once the group has identified the right people, it's time to develop a framework. The plan should include the tools and loss control elements necessary to assist a team in influencing change. While every public entity loss control effort will need to include certain basic things, every loss control framework should be tailored to the specific loss exposures facing the pool. Most good loss control professionals desire to prevent every claim, but that is likely impossible. So, it's best to prioritize efforts and develop a plan to reduce losses in the short term for the entity's high-priority set of claim causes. Do this by identifying the top three to five causes of claims in each line of coverage offered and develop a strategy to reduce losses in those areas. Don't spend too much time in "compliance" areas of safety and loss control if you're not experiencing significant declines in those areas.
Framework. Each pool loss control effort will be different, but all should have a general framework of five elements.
- Build relationships. Sound familiar?
- Create a process of "being there," including for contact, analysis, and review with members. Accomplish this through onsite surveys, pre-survey and post-survey analysis of claims history, and telephonic communication and guidance. Further, be active in statewide associations within the functional areas of the pool's public entities.
- Create a program for education, training, and information dissemination, including regional training, onsite classes and training, and making staff available for presentations at statewide associations and conferences.
Within the pool's financial capabilities, fund grant programs within critical exposure areas. For example, in Tennessee, successful grant programs include a workers' comp and safety grant, a driver safety grant for members with Auto General Liability coverage, a Property Conservation grant for those with property and crime coverage, and a police liability supplemental grant for POST-approved online police training.
- Again, within your pool's financial capabilities, fund scholarships, and continuing education opportunities for staff members from the pool membership. In Tennessee, sending pool members to the PRIMA Annual Conference, PRIMA Institute, and state chapter TnPRIMA Annual Conference, as well as police officers to specialized training, focused on the use of force, response-to-resistance, and de-escalation techniques have been very beneficial.
An excellent underlying service mantra is co-opted from a quote from Abraham Lincoln: Do for your pool members what no one else will do for them, but don't do for them what they can and should do for themselves.
In closing, you want to build a team and an effort designed for implementing change: change in behaviors, change in policy, and change in practices. In Tennessee, the focus is on building a team and a framework within the "Dirty Dozen." Some of the internal Dirty Dozen standards include:
- Be a resource, not a police force
- Be a consultant, not an inspector or auditor
- Be teachable
- Be diligent
- Be accountable
- Be duplicable
In the end, your loss control staff shouldn't simply be "on the team" or just "part of the team" with their pool members. They should be essential "teammates" with your membership.
By: Michael Fann, ARM-P, MBA
Director of Loss Control, Public Entity Partners
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