Getting the Paperwork Right With Self Insurance

Paperwork may not make the world go round, but it can use up a lot of time and patience. For busy people, paperwork needs to be pinned down, and an efficient management system needs to be in place to do it. There are a few ways of doing this, internally and externally. The “admin factor” in self insurance requires a level of expertise, and management needs to decide the best fit for its operations.

Doing your paperwork in house issues

The main issues with self insurance administration are twofold:

Administration costs and efficiencies: There’s an obvious dichotomy for business in terms of administration costs in specialised areas. The work must be done, but it’s also resource intensive in some cases, particularly when the work is undertaken by in-house professionals whose jobs are designed to cope with workloads generated by the business. In house management may or may not be cost efficient, based on the requirements of the workload.
Accounts and financial management issues: Self insurance is a financial management issue, and it is necessary for the business to conduct its self insurance operations according to statutory requirements. Input from financial managers is required, and in-house reporting systems are involved. However, the justification of costs in terms of additional resources committed to paperwork is also a potential issue.
External support- A working option

External support eliminates any additional requirements on internal administration, while retaining the valuable reporting functions of the self insurance management scheme. External services provide all the information required for financial management, allowing the financial managers to deal with issues without the added burden of administrative costs and resource issues.

Expert assistance from risk management consultants also provides a very useful administrative backup for managers who need to deal with the sometimes complex issues raised by self insurance. The external support approach covers all angles seamlessly, creating a good ongoing management methodology.

Figuring out the best approach

Best practice for self insurance administration consists of several stages of development and related options:

Consultants are engaged to set up the self insurance programs and systems. They provide a full operational schematic. These consultants also provide a full range of monitoring and safety management system support service.
Businesses may administer these operations themselves, or retain the consultants for both administrative and advisory purposes.
Businesses that administer their own self insurance engage consultants as required to upgrade their safety management systems and undertake safety audits.
Option 1 is basically an outsourcing approach, eliminating the administrative costs and creating a working management system.

Option 2 may be appropriate for businesses which are able to manage the administrative issues but still require support and advisory services.

Option 3 is a compliance-based approach, ensuring both reporting and proper conduct of self insurance administration on a needs basis.

The best options are chosen for cost-effectiveness and a good fit with the administrative and financial management needs of businesses. External services improve self insurance management efficiency greatly, whichever option is preferred.

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