Mo n t a n a S t a te Fu n d. FY 2011 Business Plan Performance September 23, 2011

Transcription

1 Mo n t a n a S t a te Fu n d FY 2011 Business Plan Performance September 23, 2011

2 Up to the Challenge September 23, 2011 FY 2011 Business Plan Performance 2

3 Agenda Introduction Business Plan Key Success Measures Enterprise-Wide Initiatives Financial Summary Questions/Answers September 23, 2011 FY 2011 Business Plan Performance 3

4 Key Success Measures Generate Total Net Earned Premium of $153.9M Achieve Fiscal Year Loss Ratio of 83.6% Achieve Expense Ratio of 27.8% or Less Attain Investment Income of $46.3M Generate Net Operating Income $23.9M (Before Dividend) Achieve Enterprise-Wide Initiatives September 23, 2011 FY 2011 Business Plan Performance 4

5 Enterprise-Wide Initiatives Workforce Duane/Parisian Customer Service Root/Strauss/Parisian/Butler Document Management External First Notice of Loss Utilization & Treatment Guidelines Reserve Re-Write Claim Management and QA Review WorkSafe Champions Infrastructure Root/Barry/Butler Business Team Alignment Enterprise Risk Management September 23, 2011 FY 2011 Business Plan Performance 5

6 Generate Net Earned Premium of $153.9M Achieved $173.6M Key Performance Indicators Implement Board Approved Rate Action Produce $12.7M of New GPW Achieve 88.3% Premium Retention Ratio Accomplishments Implemented Board Approved Rate Action Generated $15.4M in New GPW Achieved Premium Retention Ratio of 89.4% September 23, 2011 FY 2011 Business Plan Performance 6

7 Achieve Fiscal Year Loss Ratio of 83.6% Achieved 75.2% Key Performance Indicators Achieve Current AY Loss Ratio of 77.0% Manage Prior Period Reserve Adjustments and Reserve Strengthening to $9.0M or Less Accomplishments Achieved Current AY Loss Ratio of 73.9% Managed Prior Period Reserve Adjustments and reserve Strengthening to $2.3M September 23, 2011 FY 2011 Business Plan Performance 7

8 Achieve Expense Ratio of 27.8% or Less Achieved 36.5% Key Performance Indicators Manage Acquisition Expense to 6.9% Manage Loss Adjustment Expense to 15.9% Manage Operating Expenses to 13.8% Reinsurance Contingency Commission Offset of (8.8%) Accomplishments Managed Acquisition Expense to 5.8% Managed Loss Adjustment Expense to 18.9% Managed Operating Expenses to 13.4% Reinsurance Contingency Commission Offset of (1.6%) September 23, 2011 FY 2011 Business Plan Performance 8

9 Achieve Investment Income of $46.3M Achieved $50.5M Key Performance Indicators Achieve Portfolio Composition Bonds (89.8%) Equities (8.5%) Short-Term Investments (1.7%) Match Return on Barclay s Government Credit and S&P 500 Indices Accomplishments Achieved Portfolio Composition Bonds (86.4%) Equities (11.9%) Short-Term Investments (1.7%) Returns Barclay s (3.77%) MSF (4.81%) S&P 500 (30.69%) MSF (31.06%) September 23, 2011 FY 2011 Business Plan Performance 9

10 Achieve Net Operating Income of $23.9M Achieved $26.3M Statutory Ratio Premium to Surplus FY 2011 Business Plan 0.55:1 FY 2011 Actual 0.58:1 September 23, 2011 FY 2011 Business Plan Performance 10

11 Enterprise-Wide Initiatives Workforce Duane/Parisian Customer Service Root/Strauss/Parisian/Butler Document Management External First Notice of Loss Utilization & Treatment Guidelines Reserve Re-Write Claim Management and QA Review WorkSafe Champions Infrastructure Root/Barry/Butler Business Team Alignment Enterprise Risk Management September 23, 2011 FY 2011 Business Plan Performance 11

12 Workforce Continue to enhance the MSF work environment, allowing us to attract and retain high-performance employees. Provide opportunities for personal and professional development to strengthen and improve business and industry skills and retain institutional knowledge. September 23, 2011 FY 2011 Business Plan Performance 12

13 Workforce Talent Retention/Knowledge Transfer Executive Evaluation: (Completed) Mentor/Mentee Relationships Job Reassignment Pilot Succession Management Focus Groups September 23, 2011 FY 2011 Business Plan Performance 13

14 Talent Retention/ Knowledge Transfer Mentor/Mentee Relationships Tested process with real time situations and business needs Exceeded planned number of mentoring engagements Results were successful Will carry forward to develop template/guide to use as needed September 23, 2011 FY 2011 Business Plan Performance 14

15 Talent Retention/ Knowledge Transfer Job Reassignment Pilot Apprenticeship Pilot offshoot of initial direction Developed training materials, trainers, and process Implemented as CE apprentice on Operations Team 3 Competitively selected candidate to participate Required commitment of coaching and mentoring by team members and others Resulted in improved job enrichment and engagement for all participants Successful as an additional talent development tool September 23, 2011 FY 2011 Business Plan Performance 15

16 Talent Retention/ Knowledge Transfer Succession Management (beyond CEO) Secured and evaluated 360 degree feedback on Leaders Conducted 1 X 1 follow-up discussions with survey participants regarding their feedback results Executives conducted Talent Talk session with each participant Designed customized developmental plans for each Leader September 23, 2011 FY 2011 Business Plan Performance 16

17 Talent Retention/ Knowledge Transfer Focus Groups Goal to identify knowledge transfer and retention issues/opportunities Focus group participants were cross-functional and represented diverse demographics (tenure, age, gender, background) Gained important insight to address employee needs and organizational opportunities Shared results with all participants and solicited individuals with interest for continued participation in an advisory capacity September 23, 2011 FY 2011 Business Plan Performance 17

18 Talent Retention/ Knowledge Transfer Focus Groups Results Employees are encouraged and engaged by MSF s high performance culture Need for consistent on-boarding program for new and existing employees Need for formal mentor/coach relationships ( buddy system) Would like more formal career progression opportunities Research alternative work arrangements for existing employees (pre-/post-retirement) Research web-based programs for knowledge transfer, information/resource referencing, and continuous learning September 23, 2011 FY 2011 Business Plan Performance 18

19 Workforce Success Measures Complete Focus Group activities, implement Mentor/Mentee and job reassignment pilots and gain feedback and evaluations Proceed with development plans identified in CEO succession planning Move to VP/Leadership phase of succession planning evaluations and initiate development plans Results Five Focus Groups formed, meetings conducted, results assembled, and presented to Executive Staff. Eleven employees from four departments participated in five knowledge transfer events CEO succession planning ongoing VP/Leadership succession development plans in place September 23, 2011 FY 2011 Business Plan Performance 19

20 Customer Service Develop and foster a culture of safety within Montana businesses. Streamline and refine the systems and processes we use to enhance our service level to our stakeholders. September 23, 2011 FY 2011 Business Plan Performance 20

21 Customer Service Document Management External First Notice of Loss Utilization & Treatment Guidelines Reserve Re-Write Claim Management and QA Review WorkSafe Champions September 23, 2011 FY 2011 Business Plan Performance 21

22 Document Management Executive Evaluation: (FY 11 Complete) Developed and released RFP that was met with lukewarm response Investigated cost/benefit of in house development option Re-issued revised RFP which garnered greater interest from vendor community Entered into contractual agreement with CinCom in June 2011 September 23, 2011 FY 2011 Business Plan Performance 22

23 External First Notice of Loss Executive Evaluation: (Completed) Launched FNOL capability with on-line user friendly mechanism to capture critical claim information and instant claim number generation, ahead of schedule Provides greater support for first fill prescriptions and medical benefits Positive policyholder feedback regarding reporting and tracking initial report of injuries September 23, 2011 FY 2011 Business Plan Performance 23

24 Utilization & Treatment Guidelines Executive Evaluation: (Completed) Training provided to MSF claim, legal, and nursing staff Training also provided as a courtesy to DoLI and local self-insured groups Medical communication program included physicians (for treatment standards) and their nursing and administrative staff (for billing and pre-authorization issues) September 23, 2011 FY 2011 Business Plan Performance 24

25 Reserve Re-Write Executive Evaluation: (Completed) Existing claim reserve workflow cumbersome and required repetitive inputs increasing opportunity for error New program launched, providing system efficiencies and resulting claim examiner management and review of claim file efficiencies User acceptance accomplished September 23, 2011 FY 2011 Business Plan Performance 25

26 Claim Management and QA Review Executive Evaluation: (Completed) Retention of Deloitte for claim file management and QA process review Report provided prior to due date MSF meeting industry standards overall, and leading industry in early medical intervention, large loss management and data system Recommendations for minor changes accepted and implementation underway September 23, 2011 FY 2011 Business Plan Performance 26

27 WorkSafe Champions Executive Evaluation: (FY 11 Complete) 160 WSC Alumni Safety program participants Safety message contributors Local market safety advocates Class I performance results Indemnity frequency % decrease Medical frequency - 6.5% decrease Loss costs % decrease September 23, 2011 FY 2011 Business Plan Performance 27

28 WorkSafe Champions Executive Evaluation: (FY 11 Complete) Class II performance results Indemnity frequency 9.9% decrease* Medical frequency 3.7% increase* Loss costs 18.0% decrease* Class III graduated 56 participants Class IV participants selected (67) * Preliminary September 23, 2011 FY 2011 Business Plan Performance 28

29 Customer Service Success Measures Achieve fiscal year loss ratio at or below FY 2011 plan Key Success Measure Manage prior period development to less than $5.0M Quarterly evaluation by Communications to develop baseline of customer service perception Deliver projects on time and within approved budgets Results Fiscal year loss ratio of 75.2% against FY 2011 plan KSM of 83.6% Prior period development of $2.3M Speakers Bureau (effectiveness rating of 98%), reliance on MSF for press material, and positive image in all articles 5 of 6 projects delivered on time (2 early), all within budget September 23, 2011 FY 2011 Business Plan Performance 29

30 Infrastructure Incorporate a risk management process at Montana State Fund, creating a framework to identify and define our risk tolerance, limits, and scope and to establish the processes to measure, model, and manage risk. Adapt claim handling workflows that enhance our ability to deliver a differentiated level of service to our customers and improve claim outcomes. September 23, 2011 FY 2011 Business Plan Performance 30

31 Infrastructure Business Team Alignment Enterprise Risk Management September 23, 2011 FY 2011 Business Plan Performance 31

32 Business Team Alignment Executive Evaluation: (Completed) Initiated by Operations Teams as efficiency measure Supplemented with stakeholder input gathered during in person interviews Modified initial vision with differentiation in assignment of underwriting and claim expertise/personnel September 23, 2011 FY 2011 Business Plan Performance 32

33 Enterprise Risk Management Executive Evaluation: (FY 11 Complete) Engaged Eide Baily to assist with implementation of ERM process Provided training to MSF Leadership on October 12 & 26, 2010 Defined Risk Appetite and Ranking (Low-Extreme) and established Probability scale (Remote-Almost Certain) Established roles and responsibilities for Executive oversight Identified Risk Universe segregated by category Identified existing risk mitigation and control strategies to evaluate gaps and prioritize risk areas of focus for mitigation plans Established Phase II project timeline for completion of project in FY 2012 September 23, 2011 FY 2011 Business Plan Performance 33

34 Infrastructure Success Measures Provide a report with recommendations on financial and customer service improvements as a result of the review of business team alignment Decrease internal claim transfers Results Received input from 80 MSF employees, 26 agency partners, and 60 policyholders indicating the most important factor is relationships. Agents valued underwriting and service teams while policyholders valued having the same claim examiner. Existing multi-function team alignment viewed as viable. September 23, 2011 FY 2011 Business Plan Performance 34

35 Infrastructure Success Measures Train and educate MSF leadership on the concepts, processes and procedures involved in establishing the Enterprise Risk Management program Results Provided training to MSF Leadership on October 12 & 26, 2010 September 23, 2011 FY 2011 Business Plan Performance 35

36 Infrastructure Success Measures Establish the ERM Framework with the following steps: Review current risk management environment Conduct gap analysis and develop recommendations Establish specific ERM framework that includes the goals and objectives of the program, the organization and governance methodology, and the measurements and reporting processes to monitor and track progress in meeting MSF risk objectives Develop ERM Road Map of Priorities for implementation of the program in FY 2012 Results Identified Risk Universe segregated by category of 400 risks initially Identified existing risk management and control strategies to evaluate gaps and prioritize areas of focus for mitigation plans in Phase II Defined Risk Appetite and Ranking (Low Extreme) and established Probability scale (Remote Almost Certain) Established roles and responsibilities for Executive oversight Established Phase II project completion timeline for FY 2012 September 23, 2011 FY 2011 Business Plan Performance 36

37 Key Success Measures Summary KSM FY 2011 Business Plan FY 2011 Actual NEP $153.9M $173.6M FY Loss Ratio 83.6% 75.2% Expense Ratio 27.8% 36.5% Investment Income $46.3M $50.5M Net Operating Income $23.9M $26.3M September 23, 2011 FY 2011 Business Plan Performance 37

38 WORKFORCE Enterprise-Wide Initiatives Summary Category Detail Executive Evaluation Talent Retention & Knowledge Transfer Completed CUSTOMER SERVICE Document Management FY 11 Complete* External First Notice of Loss U & T Guidelines Reserve Re-Write Claim QA Review WorkSafe Champions Completed Completed Completed Completed FY 11 Complete* INFRASTRUCTURE Business Team Alignment Completed * Multi-year Initiative Enterprise Risk Management FY 11 Complete* September 23, 2011 FY 2011 Business Plan Performance 38

39 Questions September 23, 2011 FY 2011 Business Plan Performance 39