If you think dealing with older insureds will be tough for auto insurers as reflexes, sight and hearing fail elderly drivers, imagine what challenges await workers' compensation carriers as the Baby Boom generation goes bust! The only consolation for underwriters might be that they are not alone. Unlike with coverage for individual drivers, insurers get to share the responsibility for limiting the hazards facing our exploding senior population with risk managers.
In the second part of his speech before the National Underwriter Company's recent annual Property-Casualty Executive Conference, Steven Weisbart, vice president and chief economist for the Insurance Information Institute, in his luncheon address on "The Effect Of The Aging Population On The Property-Casualty Insurance Industry," talked about the problems workers' comp carriers and their commercial policyholders will face before too long.
"More people will be working longer than they have ever been," he said. "Given the uncertainty of retirement income" (with defined benefit pension plans fading away), he added, "most people will have to work longer," while improvements in health care means most might like to keep active, personally and professionally.
The problem, however, is that "seniors tend to take longer to return to work" after being injured on the job, he noted, meaning higher indemnity and medical care costs for carriers. He also mentioned that the fatality rate for those over 65 on the job is triple that for the 35-to-44 age group.
Don't expect to dump any costs on Medicare or Social Security disability, he warned, noting that if workers' comp is available, Medicare won't pay--and they'll go to court to keep from paying if they must.
Risk managers will be challenged as well. "The workplace of the future will have to be redesigned to accommodate a surge in older workers," he said. Brighter lighting, larger-type signs and other changes to help seniors do their jobs better while assuring their safety will have to be made.
(Would more seniors consider telecommuting? That would be especially helpful to keep those off the road whose senses or driving skills are at all impaired.)
The trends aren't all negative, Mr. Weisbart was quick to point out. "Seniors could help relieve the coming labor shortage for many industries, including insurance, even if they only want to work part time," he said, noting that elderly claim adjusters, customer service representatives and even insurance agents could become the norm rather than the exception.
Instead of seeing this trend only as a threat to be managed, insurers and risk managers should seize the opportunity to bolster their workforce with seniors while improving loss control for everyone.
After all, if the country remains determined to keep immigration to a minimum (legal or otherwise), and with such a low domestic birth rate, where else will we get the workers necessary (not just in numbers, but in quality) to keep our economy going?
These days, you often hear about companies offering buyouts to entice workers to retire early. Before long, you might hear about companies paying lucrative incentives to convince these experienced, knowledgeable workers to stick around.
As I am about to turn 50 next year, I don't mind the sound of that at all!
Comments (2)
As a longtime safety and health, and risk management executive, I found that older workers were less likely to be injured on the job than the younger workers.
Yes, in the event they were injured, the amount of time it took to return to work was greater, and often the results of an accident were far more serious than they might have been with a younger, more supple person.
But in the final analysis, the older worker had fewer losses, and thus overall, a company's lost-time days and loss costs could be significantly lower with a number of senior employees on the job.
One main issue I found is training. The old adage that it's "hard to teach an old dog new tricks" can be equated to a percentage of people re-entering the workforce.
Their perceptions and ideas are so set that training them in new methods and technology presents huge challenges. They use the, "That isn't the way we used to do it" argument against adapting to change, and that makes some unsuitable as employees.
Others don't learn as quickly as younger workers, so you need to take more time in training. That said, once they do learn, they usually don't forget, either.
The onus also has to be on the employer to place the senior worker in positions that will not expose them to health and safety hazards they cannot cope with. Testing and examinations of their abilities is a must before they are placed on the job.
Whether they are new to the job, or even if they did the same job several years ago and are returning, they need to be re-trained to assure the job fits their skills and vice versa, to avoid placing them in a position where they are over-tasked and unable to cope. That will inevitably lead to failure, property damage and/or injury.
Posted by BJ | November 21, 2007 1:20 PM
Posted on November 21, 2007 13:20
I like the way the article quotes Steven Weisbart about "not depending on Medicare because...they will go to court...if they must."
The flip side to that would be to imagine a system where we did not waste time in court or other pastimes just arguing which medical system (WC, No Fault, or private/Medicare) will pay for a particular injury, with the argument often based on which plan will pay the most in a given situation.
If your arm is broken, it gets fixed the best way medicine knows how, not based on whether it happened at work or in a car or in your back yard.
Of course I know that's a pipe dream (or is it?) and certainly puts me in the 'heretic' camp of the insurance industry, but so be it.
Then again, I think 'pay at the pump' for basic car insurance has merit too...
Posted by Aaron Stein | November 24, 2007 8:34 AM
Posted on November 24, 2007 08:34