1. Accident Reporting – Why Improve? *Claims reported after 7 days typically cost 18% more on average and have 17% longer disability. The Potential Benefits of Improved Reporting Practices Include: Better direction to the most appropriate medical providers, resulting in lower medical cost; Timely payment of benefits to injured employees; Lower rates of litigation; Shorter periods of disability; A lower average cost per claim and More accurate accident investigations that help to improve safety for everyone.

2. Liberty Mutual Insurance 2 Risk Management Models

3. Liberty Mutual Insurance 3 Risk Assessment / Identification Checklists – Gap Analysis By Line of Insurance Coverage Loss Analysis / Loss Probability Distribution Financial Statements Industry Exposures / Hazards Interviews and workshops – Safety Committee Process Analysis Computer Programs – RiskMaster, RiskTrak, R3 Bottom Up / Top Down – Undercover Boss – Gets employees involved Employee Safety Perception Surveys What If Scenarios SWOT Analysis Risk Registers – Frequency, Liklihood, severity Risk Maps Contracts Internal Policy & Procedure Reviews External Professionals – Agencies, Insurance Company, DOL, Associations

4. Liberty Mutual Insurance 4 Loss Analysis Claims Count And Incurred Cost Claims Count And Incurred Cost Claims Count vs. Payroll (inflation adjusted) Claims Count vs. Payroll (inflation adjusted) Frequency Rate Per $100,000 payroll Frequency Rate Per $100,000 payroll Time of Day, Day of Week, and Month Time of Day, Day of Week, and Month Tenure and Age Tenure and Age Body Part / Type of Accident Body Part / Type of Accident Location or Department Location or Department Lost Time Lost Time Experience Modification Experience Modification

5. Liberty Mutual Insurance 5 Risk Finance -Insurance and Self Insured Retentions Calculate – Loss Probability Distribution (E(L)) 10/30

6. Liberty Mutual Insurance 6 Measure and Evaluate

7. Liberty Mutual Insurance 7 Ruin Probability and Retention Fund

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9. 9 Risk Assessment / Identification – Risk Mapping

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11. Liberty Mutual Insurance 11 Risk Treatment Avoidance / Elimination Prevention / Reduction Diversification / Separation / Duplication Transfer / Insure Retain

12. Liberty Mutual Insurance 12 Prevention / Reduction - Employee Safety 29 CFR OSHA 1910 OSHA 1926

13. Liberty Mutual Insurance 13 “Train as though your life depends on it” New Hire Orientation

14. Liberty Mutual Insurance 14 New Hire Orientation - Training  Common Sense VS. Paradigm –“sound and prudent judgment based on a simple perception of the situation or facts” Some are better than others based on acumen, age/ experience, how inquisitive or curious and degree of risk aversion Paradigm –The way one perceives a situation based on evidence, experience, observation, etc. –Ex. Fire Extinguisher Risk Manager

15. Liberty Mutual Insurance Total Cost Per Case – Structured vs Unstructured RTW Program Source: National Council on Compensation Insurance (NCCI)

16. Liberty Mutual Insurance 16 Think Out of the Box

17. Liberty Mutual Insurance 17 ERPL – Employee Policy Handbook & Hiring Practices The key here is consistence

18. Liberty Mutual Insurance 18 Auto – Fleet Management CDL Driver Qualification Files Load Securement Regulations D & A Testing Transportation of Hazmat MVR – Negligent Entrustment Driving Policy with Standards Hands Free