Quality Loss Control. What is it?

John A. Dirkse, Assistant Vice President

As many of you, who read these articles over the past four years, have surmised the thrust of my message has usually gravitated to the various techniques employed by risk managers in the implementation of their overall risk management programs. These past articles have discussed topics such as; the techniques themselves, insurance coverage, proper means of procuring insurance coverage and the risk management organization.

Since January, Vance Forrest and I have traveled the state speaking to counties interested in organizing or improving their loss control and safety efforts. One important point of discussion is the perception of what quality loss control is and how carriers may, as a result of the traditional service delivered to their clients, have directed that perception. We discovered that the general perception is that quality meant frequent inspections. We needed then to determine whether each county clearly understood how different the organizational structure the Wisconsin County Mutual had proposed was from this traditional perception of loss control.

Before I go any further, let me comment that the many carriers offering loss control services do a good job and fulfill a necessary function for both the insured and the insurance carrier and therefore, do not want my following comments to diminish the accomplishments of many of the very talented individuals I have had the opportunity to meet or work with. However, our approach, while not revolutionary, is different than the traditional loss control services offered and can be valuable to any type of organization.

We encountered general service arrangements where a loss control representative of the insurance carrier visited the county to conduct an inspection, visited several of the key departments, returned to their office and drafted recommendations for ways to improve certain situations that may cause loss. While this type of activity is important, it is not the essence of quality loss control service. The mere inspection service misses too much of the daily activity for it is only a snapshot of those activities that continue for the balance of the year. Without active management response, the observations and recommendations resulting from this visit are nothing more than ink on paper and the inspection has not produced the desired effect. This is the very reason we began to promote the "involved or focused" approach to the loss control or safety effort. An effort that functions 365 days a year and is not solely dependent on the "visit" for direction.

From our experiences as General Administrator of the Wisconsin County Mutual, we have developed an appreciation for the valuable and knowledgeable resources each and every county has at their disposal, their management and employees. Without this input and advice from the key resources of our member counties, the technical operating committees and the Board of Directors, the effort would be nothing more than another insurance carrier offering recommendations, with the hope that they will be acted on.

Rather than accept this traditional role, we sought to find a way to organize the loss control and risk management effort in such a fashion that it utilizes the valuable resource available through involving the department supervisors and employees of each member county. This involved and focused approach was implemented as a means of creating awareness and as a demonstration of concern for safety and the control of costs associated with losses. This is accomplished by actively involving the department supervisor and the employee in the effort and not merely passing on a recommendation for the insurance carrier's representative for compliance. In addition, by encouraging accountability and active management a county can begin to control and manage the effort more effectively.

The primary function of this focused approach is to use the daily input available from employees and managers aware of the concern for loss control and implement policies and procedures that match the personalities and individual characteristics present in each county. This will allow the Loss Control Committee or committee of jurisdiction for the loss control effort to respond to safety and loss control concerns from a focused and informed viewpoint. Further, through direct participation of the employee, these responses are generally accepted without much resistance.

In our suggested model, each department is initially asked to review their operations for any of the identified exposures that are present, conduct a self audit of these operations and present their findings to the proper focus group or sub-committee. The focus group is then asked to prioritize these findings and begin forming recommended policies and procedures for controlling the exposures within their department and make this information available to the Loss Control Committee for action.

This simplified explanation is meant to set the stage for discussion of the quality side of the support services available to support this type of effort. Loss control field visits are expensive. This expense is amplified, if the results do not match the effort and time spent during the visit. If the visit is for a purpose and the resulting recommendations valuable from response to a loss trend or safety concern, then the visit has value and is considered cost effective. From past experience, we have seen too many "rusty swing-set chain or crack in the sidewalk" observations from field visits. This comment is meant to accentuate or question the "quality" or value of such a general observation. One must ask, was the expense of this visit necessary? From our perspective, no. Truthfully, these are not the only observations that the carriers representatives make, however, they serve to demonstrate that merely having the visit without focus or direction may not be beneficial or cost effective. Please remember that someone has to pay for this service and it usually is you.

Our view of quality loss control and risk management support services is entirely different. While the inspection service has it's place in the overall loss control support service plan, it by itself is not the answer or an indication of "quality" in the service provided by a carrier. We suggest that quality loss control service is provided through education and specific attention to the needs and exposures identified by each county. In this fashion, we can respond to help support what needs to be addressed versus spending considerable amounts of time viewing snapshots of an organization's activities. Providing problem or issue specific consultative and educational support, via media materials and training, adds quality to the service support of the internal county loss control effort. This defined attention and focused response provides the quality side of the service arrangement that can be valuable and cost effective.

This article is written with the intent of encouraging any entity to evaluate their perception of quality loss control services and to suggest the importance of management response and action regarding the total loss control or risk management effort within their entity. As always, if this article has generated any questions, please direct them to your agent, company representative or myself.