Companies require a fresh approach to curb costs: Marsh Report
HONG KONG, Dec. 4, 2012 /PRNewswire/ -- Companies in Hong Kong continue to see employees' compensation (EC) costs soar as the frequency and severity of employee injuries push insurance premiums to new heights, Marsh said in a report entitled Curbing the Costs of Employees' Compensation in Hong Kong, published today.
The report reveals that companies have experienced a 20% to 30% increase in EC costs each year, making employees' compensation the largest insurance cost for most businesses. For mid- to large-sized companies in certain industries, employees' compensation insurance costs are on par with costs for raw materials and power.
Rates are expected to continue rising, driven both by the increased frequency and severity of claims over the last five years and reductions in available insurance capacity as major insurers withdraw from the local EC market.
In the report, Marsh recommends companies adopt a new approach to EC, detailing a four-pronged approach that can reduce these costs by 30% or more, including safety management, injury management, claim management and insurer management.
Michael Lewis, Senior Vice President and Marsh's Workforce Strategies Practice Leader for Hong Kong commented: "The employees' compensation situation in Hong Kong is becoming untenable for companies operating here. The rising costs are hurting companies' productivity and competitiveness, and unnecessarily eating into their margins."
"By implementing pre-injury and post-injury strategies, companies can reduce their employees' compensation insurance premium costs by 30% or more and decrease the frequency of injury by 20% or more. This includes giving safety management board accountability and ensuring injured employees see appropriate specialists to speed up recovery times," added Mr Lewis.
About Marsh
Marsh, a global leader in insurance broking and risk management, teams with its clients to define, design, and deliver innovative industry-specific solutions that help them protect their future and thrive. It has approximately 26,000 colleagues who collaborate to provide advice and transactional capabilities to clients in over 100 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 53,000 employees worldwide and annual revenue exceeding $11 billion, Marsh & McLennan Companies is also the parent company of Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; Mercer, a global leader in human resource consulting and related services; and Oliver Wyman, a global leader in management consulting. Follow Marsh on Twitter @Marsh_Inc.
About Marsh's Workforce Strategies Practice
Marsh Risk Consulting's Workforce Strategies Practice comprises experienced and credentialed consultants who assist organizations with their risk management, employees' compensation cost containment, and workplace safety challenges.
Our consultants help organizations to achieve optimal performance through reducing employees' compensation loss costs, improving productivity and profitability, reinforcing behaviours in support of key business objectives, and developing and implementing sustainable safety and health management systems.
In the experience of Marsh's Workforce Strategies experts, certain businesses may have the ability to decrease the frequency of employee injuries by 20% or more, and reduce their employees' compensation risks and premium costs by 30% or more.
