Newsroom / Risk Management
Early reporting of workers comp claims alone may not reduce costs

injured employeeLockton experts dig into claims data to clarify relationship between report lag and claims costs

KANSAS CITY, Mo., June 14, 2018 – Lockton experts recently released new data that dispels a long-held belief about report lag time for workers’ compensation claims.

Report lag is the number of calendar days between an injury occurring and that injury being reported to the carrier or third-party administrator. Traditionally, it has been believed that reducing report lag would reduce workers’ compensation claims costs. Lockton dug into their database that contains information about more than $21 billion in workers’ compensation claims and found that reducing report lag isn’t the only strategy to undertake to reduce claims costs.

Here are the conclusions Lockton’s experts reached after examining the data:

  • Report lag has no statistically significant relationship with claim cost if reported within 12 days of injury.
  • After 12 days of report lag, the correlation between report lag and claim cost is largely driven by the type of claim.
  • Increases in allocated loss adjustment expenses, which are costs that fall outside of medical payments or wage replacements, are correlated with increases in report lag.

To dig into the details behind these conclusions and learn about actions a company can take to potentially reduce claims costs, check out Report lag: Truths and myths.

About Lockton

Lockton is a global professional services firm with 6,500 Associates who advise clients on protecting their people, property and reputations. Lockton has grown to become the world’s largest privately held, independent insurance broker by helping clients achieve their objectives. For nine consecutive years, Business Insurance magazine has recognized Lockton as a "Best Place to Work in Insurance.”

    
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