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ATLANTA-As more countries shift responsibility for compensating injured workers to employers, risk managers of multinational companies must take a global approach to managing the costs of occupational injuries, experts say.

"The traditional view is that (occupational injury) is a local issue to be handled by the local management," said Andrew Berry, a consultant with Tillinghast-Towers Perrin in Boston.

This view has been reinforced because several systems are used to compensate injured workers in different areas of the world, he noted. But, some countries that have paid injury claims from the social security system are shifting the cost of workplace injuries back to employers.

Last year, Argentina ushered in a U.S.-style workers compensation system, moving responsibility from the state to either the employer or individual (BI, June 10, 1996). Other countries in Australasia and Europe, for example, are making similar reforms.

This has resulted in occupational injuries taking up an increasingly large part of an organization's global operations, said Mr. Berry.

"To control costs, multinationals need to look at commonalities and differences around the world," he advised.

Mr. Berry spoke on global responses to occupational injury during a session at the Risk & Insurance Management Society Inc. conference last week.

Compensation for workplace injuries and long-term disabilities typically is paid under two systems: workers comp, a no-fault system that excludes court remedies; and employers liability, in which courts determine compensation-which can include non-economic awards.

"In actuality, there is not a clear distinction between the two systems" in most countries, said Mr. Berry. In fact, where elements of both the employers liability and workers comp systems are used, EL awards are influenced by workers comp payouts, he said.

To take a global approach to occupational injury liabilities, risk managers must first identify the costs. He said these costs generally fall into three categories:

Direct costs, or those stemming from claims themselves.

Indirect costs, such as disability pensions and loss of productivity.

"Soft" costs, which may include low employee morale and may lead to lower productivity among uninjured workers.

The workers comp system is "considerably more efficient" than employers liability because it removes pain-and-suffering awards, reduces litigation costs, separates non-occupational from occupational injuries and makes more costs direct, Mr. Berry said. By showing the true costs of occupational injury, workers comp programs encourage employers to tackle those issues head-on.

Local regulations determine which system businesses may use, but cost/benefit analyses can help employers prioritize preventive measures, ranging from safety procedures to return-to-work policies, Mr. Berry said.

Hugh Roberts, international total cost of risk leader at J&H Marsh & McLennan Inc. in Philadelphia, also spoke during the session. He outlined how two U.S.-based multinational organizations had reduced costs through a global workers comp cost-containment plan.

Both organizations had a "high interest in employee welfare," explained Mr. Roberts, but also wanted to reduce the cost of injuries. Although operating in different businesses with different corporate cultures, the companies used similar techniques.

Each company's risk management team had strong support from senior management. This was a crucial factor, providing the necessary backing and motivation for regional operations to adopt the measures, Mr. Roberts said.

Also fundamental to success in both programs was teamwork across different areas within the organizations as well as across country borders.

While partnership with brokers and insurers is crucial, local staff must be included, he said.

Teaming with local brokers and insurers helped the home-office risk managers understand local customs and practices, including resistance to change, Mr. Roberts said.

Information-gathering and developing standard indicators of performance allowed the risk management teams to identify their priorities. These were then translated into standards applied worldwide, enabling local staff to act on recommendations for change.

Mr. Berry recommended that organizations wishing to implement a global occupational injury program look closely at how they measure performance.

Lost-time accidents and the length of time an employee is away from work allow for international comparisons, though Mr. Berry warned that it is crucial to ensure the measurement standards are the same.

In certain countries, a lost-time claim can be filed only after three days, while in others it may be just one day. Therefore, he said, multinational employers must adopt their own reporting requirements worldwide to ensure the resulting statistics can be compared on a uniform basis.

"Adoption of improved prevention and rehabilitation strategies will help multinationals introduce uniformity into their cost management programs and reduce the costs of occupational injuries on a global basis," said Mr. Berry.

Timothy Carter, manager of property insurance and accounting at The Boeing Co. in Seattle, moderated the session.