The Client and Its Challenge
Outstanding workers’ compensation liabilities were negatively impacting this large food processor’s balance sheet. The client faced an aging inventory of more than 300 claims that were more than a year old and realized the company needed to establish a more aggressive claims closure strategy.

Initially, the client team only focused on closing catastrophic claims — those reserved for more than $100,000. However, there were only a handful of these cases in the inventory, and the client needed a broader approach in order to make a significant impact on outstanding liabilities.

The Risk Consulting Solution
The client retained Marsh to help manage its claims to closure by focusing on those that could be impacted through more aggressive oversight. Marsh consultants began the process by trending and calculating all of the client’s outstanding workers’ compensation liabilities, excluding retentions, and completing a raw count of all open claims. This became the baseline to measure progress in the quarterly reports that Marsh delivered to the client.

Marsh consultants then began the claims inventory workout process by sorting all open workers' compensation claims into several categories, including claims that could be settled immediately, claims that required some action to move them closer to settlement, and those that would be unlikely to close. Marsh made specific settlement recommendations to close select claims immediately.

The team addressed other open claims by focusing on specific actions that could help bring the file to closure. Claims were then migrated to priority status and eventually moved to closure. Consultants closely managed the third-party administrator (TPA), making sure follow-up was aggressive and identified claims were closed.

Results
Through aggressive claims workout procedures, Marsh closed 72 percent of the open claims and reduced outstanding liabilities by 63 percent, resulting in savings of more than $13 million. The project reduced the client’s outstanding workers’ compensation liabilities by more than 50 percent.