Study By The Hartford Demonstrates That 'Time is Money' For Worker's Comp. Claims

Latest research from one of the top providers of workers' compensation insurance shows a direct link between quick reporting and cost savings

A new study by The Hartford Financial Services Group (NYSE: HIG - News), one of the nation's top providers of workers' compensation, found that claims filed a month or more after an injury cost an average of 48 percent more to settle than those reported the first week.

The study also shows that the cost disparity is increasing. When the insurer first quantified the cost of a reporting delay in a similar study four years ago, it found that workers' compensation claims reported a month after an injury averaged 45 percent more to settle - three percent less than in the current study.

"Workers' compensation has been a boon has provided valuable protection to workers for nearly 100 years, but it is a significant expense for businesses - - whether they buy insurance or self-insure," said Tom Johnston, senior vice present and chief actuary of The Hartford's property-casualty operations. "Our latest findings show the inflationary effect of rising medical and lost-time costs on claim-reporting delay, and how prompt reporting has become an even more important tool to control claim costs."

In its study, The Hartford analyzed more than 41,000 lost-time workers' compensation claims filed between 2000 and 2003. The injuries that prompted the claims fell into three categories - back injuries, carpal-tunnel syndrome and other nerve disorders, and miscellaneous injuries - which together represent about two-thirds of all lost-time workers' compensation claims. The study excluded claims for open wounds, fractures and dislocations, which are almost always reported within 48 hours of occurrence. The analysis shows that reporting back sprain and back strain during the first week can save an average of 25 percent of medical and lost-time costs, up from a 10 percent savings in The Hartford's previous study of 53,000 claims from 1996 to 1999.

"A delay in reporting a claim often means a delay in starting appropriate treatment. This adds to the recovery time and the cost of medical care and wage replacement - and can even make the difference in whether the worker will ever return to the job," said Cal Hudson, The Hartford's senior vice president, property-casualty claims. "These costs are exacerbated by today's approach to treatment for back injuries and other soft-tissue injuries with different, more expensive pain-management techniques than medical providers had previously employed, including more high-priced drugs and greater use of physical therapy and chiropractic services," he added.

Data show that earlier reporting of injuries reduces their ultimate cost for treatment, and that the potential savings has increased significantly since The Hartford conducted a similar study four years ago. Carpal-tunnel syndrome and other nervous system-inflammation injuries cost 23 percent less if reported the first week, up from 20 percent in the earlier study four years ago. The miscellaneous category of injuries cost 18 percent less, up from 12 percent from four years ago.

"The Hartford's study clearly demonstrates that early reporting of workers' compensation claims saves money," said Hudson. "When policyholders report claims promptly, The Hartford can quickly bring in its case-management services to oversee the claim and ensure that injured workers receive prompt, appropriate medical services and assistance in returning to the workplace as quickly as the medically possible."

Many businesses, especially larger businesses, are reporting injuries more quickly. Smaller businesses often have few worker injuries so they are less likely to have an early reporting procedure in place when accidents do happen.

"Most businesses have become extremely cost-conscious, so controlling workers' compensation expenses is even more important than it was four years ago," said Hudson. "Companies should take steps to prevent injuries, but it's equally important to control claim costs. Early reporting can make that happen easily."

The Hartford is one of the nation's largest financial services and insurance companies, with 2003 revenues of $18.7 billion. The company is a leading provider of investment products, life insurance and group benefits; automobile and homeowners products; and business property-casualty insurance. The Hartford's Internet address is www.thehartford.com.

Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include those discussed in our Quarterly Reports on Form 10-Q, our 2003 Annual Report on Form 10-K and the other filings we make with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.