Risk Management Report 2010
Presented below is Clackamas County Risk Management’s Annual Report. It contains graphs and statistics spanning the five-year period of July 1, 2005 through June 30, 2010.
The purpose of this report is to provide information, both programmatic and statistical, to help us understand and incorporate risk management measures into the everyday tasks we perform. Some general and unique challenges that have faced Clackamas County will be addressed as well. Knowing there is no crystal ball for forecasting the future needs of the County, we must rely on the experiences and statistics of previous years to project potential areas of future loss.
General Overview
Clackamas County has 380,430 residents living within an area of 1,879 square miles. The county is primarily rural but does include 17 cities and local governments. Clackamas County employs approximately 2,285 full-time, part-time, seasonal and temporary employees, along with many volunteers. County government consists of departments organized to provide the following services: transportation and development, sewer, public safety/law enforcement, tourism, public and governmental affairs, libraries, community health and social services, taxation and assessment, as well as internal administrative services.
It is the intention of Clackamas County to preserve and protect the assets of the County from accidental loss at the most economical cost. Also, just as importantly, the County’s goal is to provide a safe, secure and healthful working environment for its employees. The County has elected to retain exposure to loss primarily through self-insurance and transfer exposure through purchased insurance only when the premium cost has been determined to be cost-efficient compared to the exposure.
The management and control of the County’s risk management program is a function of the Risk and Benefits Division, within the Department of Employee Services. A Risk Management Committee provides oversight of this function with the day to day management provided by the Risk Manager. Our philosophy is that risk management must be so much a part of County culture that it becomes a value rather than merely a priority that shifts as other priorities change. The primary areas managed through this program are: liability, workers’ compensation, vehicles and unemployment claims administration, loss control services, insurance, and contracts.
To compare our program with like entities, we calculate the cost of risk as a percentage of budget and payroll. Costs include: actual claims expenditures, insurance premiums, staff salaries and benefits, materials and supplies, consultants and contractors. From the graph you will see that our cost of risk increased slightly (Budget - .004 and Payroll - .03) in the 09/10 fiscal year. The majority of this increase relates to an increase in claims costs. You may notice that the Summary of Overall Costs graph shows a decrease in claims costs. The reason for this apparent discrepancy is because the claims cost figure used in the cost of risk calculation is the amount paid on claims from all years and the Overall Costs graph figures are the amounts paid on claims filed in each particular fiscal year. We still have claims from older years that continue to generate costs significant enough to cause the cost of risk to increase.
Services to the Organization
Risk Management staff provides the following services to the organization:
- Internal consulting services for departmental staff on preventing and controlling risks, including risk assessments;
- Workers’ compensation, liability, vehicle, property and unemployment claims administration;
- Marketing, purchasing, and administration of property, excess liability and workers’ compensation, and other miscellaneous insurance policies and bonds;
- Review of County contracts for insurance requirements and indemnification language;
- Employee and supervisory training on risk-related topics, including tort liability, workers’ compensation, loss control and employee safety;
- Coordination of modified duty assignments and physical rehabilitation programs for injured workers;
- Loss control consultative services for employee safety and environmental issues;
- Ergonomic consultations.
Executive Summary
The 2009/10 fiscal year was a challenging year on a number of fronts. A struggling economy resulting in lay-offs and shrinking resources cannot help but impact risk management measures. Unemployment costs rose to a new high and the attention on safety is stressed because departments need to continue providing high quality service with dwindling resources.
We often analyze claims performance as a means of determining how the risk management picture looks, but risk management is much more than how we do in our claim performance. It is only as we look at the larger picture (in risk management circles we call this “enterprise” risk management) of all aspects of risk that we will be able to better understand the ways to “preserve and protect the assets of the County”.
From the graphs below you will see that the number of liability claims went down, vehicle claims were flat and workers’ compensation claims increased (quite dramatically). The reasons for this increase will be explained further in the workers’ compensation section. To briefly summarize, it relates to, in one case, a single incident with multiple claims and in another case, one type of activity that generated multiple claims.
Of perhaps greater interest is how these numbers impacted our costs. The second graph reflects the costs associated with these three areas. Only vehicle claims went up - and only slightly. In the workers’ compensation area, the fact costs did not increase even though the number did was due to the minimal medical treatment that resulted from the single incident mentioned above.
Just a note of caution lest we rejoice too quickly in the cost reduction; please keep in mind that the more claims we have, the greater the odds of generating claims with significant costs. Our focus should be on risk identification, prevention and mitigation.
Claims data reflects that from FY 08-09 to FY 09-10 costs changed by the following:
- Liability down 29%
- Workers’ Compensation down 36%.
- Vehicle up 21%.
The OSHA Incidence Rate graph shows how we have done in preventing injuries. FY 09/10 increased by 33% from the prior year. The challenge is to put into place those actions (e.g. heightened awareness) that will prevent greater than first aid injuries so we don't have to hope they won't cost us much.
