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James Marta CPA, CGMA, ARPMJames Marta & Company LLPCertified Public Accountants
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If all you have to offer your members is a lower price, why will they stay in the long-run?
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1. Shared vision and right culture. 2. Pooling is a long-term commitment. 3. The pool can only be your coach. 4. Loss control and claims management is the
key focus. 5. You need to think about capital in the
long-term.
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Soft skills of board and management Agree on a long-term vision Understand what it takes to achieve this
vision◦ Willingness to connect and commit your
intelligence, passion and service to others Establishing the culture
What do the members share
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You are on the board to make board decisions related to the pool’s needs. ◦ Leave your member hat at the door.
Board role – which is it?◦ Represent the interest of the member?◦ Work at meeting the shared goal of the
organization? Show up◦ Be prepared◦ Be engaged
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◦ Right People, Processes and Training (create the right culture)◦ Positions Executive Director/Program Manager Loss control Claims Management Finance◦ Consultants Actuary Investment advisor
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Action:1. Know your other members and board
members.2. Establish common ground on what your
core concerns are.3. Create a shared vision on how to address
these concerns.4. Staff your organization with the right people
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Once members and the board fully understand this, making decisions is easier. It is a philosophy It is a way of life It is taking ownership of the cause and
effect It is financing for the long run variabilityAre you getting notices of withdrawal every year?
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Action: Understand and educate; where you were◦ History of industry◦ History of your organization◦ History of the pool
Provide information: where you are◦ Industry◦ Programs and members◦ Capital
Establish specific goals: Where you want to be◦ Responding to industry◦ Programs and members◦ Capital
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Risk management checklists are a tool but they must be reinforced by:◦ Right behaviors◦ Training◦ Resources◦ Coaching◦ Development of tone at the top
Each member must put in the work Culture makes or breaks the poolAre you having a problem getting a quorum, members on committees. Do they engage?
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The pool can coach ◦ Safety committees◦ Return to work programs◦ Development of policies and procedures
Board and member management◦ Emphasize the tone◦ Include safety and risk management as part of
supervisor and administrator’s evaluation Measure activities Measure results
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Action:1. Get commitment from member management 2. Assist members in setting up safety committees3. Advise on linking activities and results to
supervisor and manager performance evaluations.
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"I am a great believer in luck, and I find the harder I work, the more I have of it.“ Thomas Jefferson
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Whether you have in-house claims management or an outside claims administrator you need to own your claims◦ Know your claims◦ Manage your claims There needs to be an established process of
reviewing claims Analyzing claims data No surprises
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When to settle, when to fight; is it business or is it personal?
Reach a fair settlement Pre-litigation – prior to it becoming a claim◦ Cyclical nature of entities◦ Helping an agency have operations reviewed (what can
go wrong,)◦ Good list of resources◦ Mediators that are acceptable to claimants.◦ Effective attorney panels- do they work on settling or
focus on litigation? Are they working for you?◦ Preventing litigation
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You need a long-term capital policy ◦ You need to deal with variability◦ The past is not necessarily a predictor of the
future Understanding exposure Understanding large loss trends Given long enough periods you will have
experiences across the curve◦ Your needs grow with time and changes in
your program – costs increase.
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James Marta & Company Certified Public Accountants17
Market Rates
Optimal pooled rates
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James Marta & Company Certified Public Accountants18
Claims are an estimate So your largest expense is an estimate Your losses are based on historical and other
predictive information The future may or may not follow that pattern. You need to quantify or measure risk
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Understanding exposure Understanding large loss trends Given long enough periods you will have
experiences across the curve Bad things happen all together◦ Underwriting◦ Investment earnings◦ Giving money back◦ Large losses
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James Marta & Company Certified Public Accountants20
“When a pool has money the pool has options”
Equity becomes the buffer between the losses and the member.
This enables the pool to provide a more stable rate to members over time.
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1. Shared vision and right culture. 2. Pooling is a long-term commitment. 3. The pool can only be your coach. 4. Loss control and claims management is the
key focus. 5. You need to think about capital in the
long-term
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James Marta CPA, CGMA, ARPMJames Marta & Company LLPCertified Public Accountants& CAJPA Accreditation Manager
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