Approach proudly represents the employers of the SMART Dream Team, an invitation-only group whose members are the who’s who of the top construction firms in Washington state. Even among this group, certain employers stand out each year for some remarkable achievements. One that caught our eye recently is University Mechanical Contractors, Inc. of Mukilteo, which achieved an incredible loss ratio of just 0.67% in 2017, the lowest loss ratio in the Dream Team.
What’s a loss ratio?
When it comes to any insurance, including workers’ comp, the loss ratio is simply the amount of claims costs divided by the amount paid in premium:
Loss ratio = Claims costs ÷ Premium paid
Of course, L&I and other insurance providers want to make sure they’re collecting more in premium than they’ll need to pay out in claims. So,
- L&I set rates for 2017 assuming that the average construction contractor would have workers’ comp claims that cost about $71 for every $100 paid in premium. That’s a loss ratio of 71%.
- By comparison, UMC’s claims costs in 2017 were just 67 cents for every $100 paid in premium!
Normally, you wouldn’t be too thrilled to save money for your insurance provider! But, as a Retro participant, UMC earns a substantial refund because their rates get recalculated based on their actual, amazingly low loss ratio. It helps their future rates as well.
How did University Mechanical Contractors, Inc. do it?
UMC has been a leading Puget Sound-area firm for many years (they’ll celebrate 100 years in business in 2020) and a Dream Team member for 20 years. As their Approach Retro Coordinator says, “Their lowest loss ratio award was not easy—they work very hard at their safety program.” That’s probably an understatement, as UMC achieved 1 million consecutive safe hours in January 2019, having gone 578 days without a recordable injury. Their loss ratio achievement comes on the heels of major state and national safety award recognition this year.
UMC’s leaders and employees hold safety as their number one core value.
“UMC established our new safety program to inspire the overarching principle that motivates UMC’s crews to work safely and to look out for one another—pride,” said Kirk Baisch, safety director and firm partner.
In UMC’s pride-based safety culture, safety training begins on day-one of an employee’s employment and continues regularly in one-on-one and group sessions throughout his or her tenure. For UMC, the keys to successfully managing any project include communication, accountability, pre-planning, safety orientations for all crew members, and effective weekly safety meetings.
Their pride-based safety culture consists of simple, yet powerful, strategies that always keep safety top of mind:
- Lead by Example – Do the right thing, not because it’s a rule, but because it’s right.
- Own Your Zone – Evaluate your work area to ensure it’s clean, organized and hazard-free.
- 5 for 5 – Every five minutes, do a five-second visual risk assessment.
- Know When to Stop – If you’re unsure, STOP, ask, and get more information.
“The most successful way to maximize a safety excellence culture is to tap into the pride and professionalism of the whole team,” said Baisch.
How can your company do it?
Even if you can’t get your loss ratio under one percent (few can!), every bit it goes down will help your company to earn lower premiums and higher Retro refunds. The first step is safety, of course, as the cheapest claim is the one that never happens. Why not schedule a safety visit if you haven’t had one in the past year? And, our new Claims 201 class is perfect for motivated employers looking to go beyond the basics and take control of their workers’ comp claims. There’s no cost for these programs if you’re an Approach client, so sign up today:
