James Marta CPA, CGMA, ARPMJames Marta & Company LLPCertified Public Accountants

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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Market Rates

Optimal pooled rates

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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

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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“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.

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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