Safety Groups New Rebate Model - PowerPoint PPT Presentation

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Safety Groups New Rebate Model

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Able to calculate rebates by spring following the year of participation. ... Rebates are generated 22 months following a firm registering in the program. ... – PowerPoint PPT presentation

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Title: Safety Groups New Rebate Model


1
Safety Groups New Rebate Model
The Rubber Association Of Canada Safety Group
2
Safety Groups4-2-2 Rebate Formula
  • Maximum group rebate of 8 of combined group
    premium
  • 4 earned for successful completion of Safety
    Group Achievement Elements
  • 2 earned for improvement to LTI frequency for
    the group compared to a three year average (only
    claims gt 7 days)
  • 2 earned for improved LTI severity for the group
    compared to a three year average
  • -1 for groups with 10 worse LTI frequency
  • -1 for groups with 10 worse LTI severity
  • Program Cap of 20,000,000.00

3
Example of 4-2-2 Formula
  • Combined Group Premium 12,879,870
  • Safety Group Achievement 80
  • Group LTI Freq. reduction 15
  • Group Severity reduction 15
  • Achievement (80 of 4) 3.2
  • LTI Freq. improvement 1.5
  • Severity improvement 1.5
  • GROUP REBATE (6.2 of premium) 798,551

4
New vs Old Formula
  • New Formula
  • Rebate directly linked to outcomes.
  • No risk of a zero rebate.
  • Able to calculate rebates by spring following the
    year of participation.
  • Able to create accurate estimates of the rebate
    once a group is formed.
  • Simple to understand and track performance.
  • In line with our current incentive programs.
  • Old Formula
  • Rebates are based on a comparison
    experience-rating outcomes.
  • Risk of receiving Zero rebate.
  • Rebates are generated 22 months following a firm
    registering in the program.
  • Unable to accurately estimate rebates due to the
    components of the different experience-rating
    programs.
  • Not in line with current incentive programs.
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