By Bill Donnell, CPCU, President and Chief Executive Officer, NCCI
Do you remember the days when you had to make a trip to Blockbuster to rent a movie? Most kids now have no idea of that concept, thanks to streaming services like Netflix.
Did you know that Blockbuster had the opportunity to partner with Netflix? But it turned the offer down. At the time, Blockbuster was at the top of its game with thousands of locations and millions of customers like me.
But we all know how that story ended—Blockbuster declared bankruptcy and Netflix is now worth tens of billions of dollars.
At the National Council on Compensation Insurance (NCCI) Annual Issues Symposium (AIS) 2017 in May, my main question, or challenge, to the industry was, how do we ensure that the workers compensation system does not share the same fate as Blockbuster? Our workers comp system is important to ensuring safer work environments, aiding injured workers, and protecting employers.
The key is staying relevant. History clearly shows that bad things happen to companies and industries that don’t adapt to change and become irrelevant.
We all know that change is inevitable—and it’s coming faster than ever before. Technology is reshaping the very definition of worker and workplace, not to mention its profound effect on medical treatments.
But we’ve been here before. If it were the 1950s, I would be talking about similar challenges: a changing workforce, changing workplace, workers needing new skills, and new technologies. While we don’t yet have a clear picture of what these changes will exactly look like, we do know that change will create different needs for both workers and employers—and the workers comp system will need to adapt to meet those needs.
Relevancy is a moving target, so staying relevant takes perseverance. The workers comp system is resilient and our history has shown that we can adapt and evolve. In our 100-plus year history, the system has adapted to major shifts in the workforce with great success.
Today, workers compensation is a relevant industry—95% of full-time workers in the US are covered by the system. And the system has kept its relevance, in part, by focusing on safety; over the last 20 years, claim frequency has dropped by nearly 50%. For a long time we’ve focused on return-to-work programs, which has contributed significant value to employees and employers alike, not to mention positive social benefits. And underneath it all, our industry financial health is strong.
However, to remain relevant, we as an industry must take on four challenges:
- We must better communicate our successes to ensure key stakeholders understand the value of the system
- We must be even more mindful of the balance needed across our stakeholder groups
- We need greater data-driven Thought Leadership to dispel misinformation
- Perhaps most importantly—with change happening quickly in the 21st century—we must pick up the pace in adapting to meet our customers’ needs
When we are successful in these efforts, we will not only stay “real-time relevant,” but we will enable the workers comp system to continue to provide value and support for the next generation of workers and employers.
Not an easy task, but one that the workers compensation industry must pursue.
NCCI is privileged to play a big part—offering data, insights, tools, and services to help adapt to the changes ahead and continue to foster a healthy workers compensation system.
About Bill Donnell
Bill Donnell is president and CEO of the National Council on Compensation Insurance (NCCI),
which was founded in 1923. NCCI’s mission is to foster a healthy workers compensation system. In pursuit of this mission, NCCI gathers data, analyzes industry trends, and prepares objective insurance rate and loss cost recommendations. These activities—together with research, analytical services and tools, and an overall commitment to excellence—have positioned NCCI as the trusted source for workers compensation information. To learn more about NCCI, please visit ncci.com.