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to To The Point list To the Point/October/2004 • The workers’ comp opportunity. At first, I wanted to say it was the Workers’ Comp problem. And then I changed my mind. What appears to be a problem is actually an opportunity. Because it’s very complicated, Workers’ Comp is subject to costly errors and mistakes that can drive up costs and linger for years. They’re costly because unlike any other type of insurance, the insurance company actually advances money to meet claims—and you pay it back through increased premiums. The opportunity is finding the mistakes and errors and correcting them. Both Judy Jacobs, our sales manager, and I are so serious about this we became Certified WorkComp Advisors. Now we’ve taken Workers’ Comp a step further and Mosinee Insurance has a new website dedicated exclusively to this issue: www.comp-save.com. Please visit it. If you have Workers’ Comp questions or issues, let us know through the website or call us. We can help. • It’s taking more to retire. That’s the conclusion of a recent study conducted by Aon Consulting and Georgia State University. In all likelihood, we’re going to have to work longer and save more in the future. The report found that an individual with a pre-retirement income of $20,000 would need to earn $17,800—or 89% of pre-retirement income—from income sources to maintain the same standard of living he or she enjoyed prior to retirement. That’s up from $16,600—or 83%—in 2001 to keep the same standard of living. The same study points out that the person earning $90,000 a year would need retirement income of $70,200—or 78% of previous income—in 2004 to maintain the same living standard in retirement, a jump from $68,400 in 2001. One reason for the rise in the so-called “replacement income ratios” is that the decline in basic tax rates has boosted employees’ pre-retirement disposable income. Translated, this means they have to take in more income in retirement to maintain the same standard of living. Now, you have something to look forward to—working longer and saving more. • Yes, some people believe their own baloney. It didn’t come as too much of a surprise that The Donald is trademarking “Trump University.” Why not? Paris Hilton is doing the same thing with her name. Who says narcissism is dead? Perhaps she thinks the effort will result in extending her 15-minutes of fame for an extra 120-seconds. But back to The Donald. When asked about the recent bankruptcy of his Casino empire and its impact on the Trump brand, The Donald responded quickly. “People that don’t understand finance might not understand…[but] for intelligent people, [the restructuring] enhances the [Trump] brand,” he said. That’s the stuff great universities are made of, isn’t it? Why didn’t UW, Harvard or Yale think of that? You probably haven’t thought of bankruptcy in those terms, have you? But now it’s all clear. The Donald has told us all how to enhance our brands! Go bankrupt! That may be his next TV series. See what you’ve learned—without even enrolling at Trump Tech. Should it be that The Donald is correct, then it’s quite possible that graduates of Trump University will take great pride in their ignorance. If so, they won’t be alone. • A little prevention goes a long way. When it’s cold, mothers always tell their kids to put on their coats when they go outside. And how many times have we heard that changing the oil every 3,000 miles prevents problems? Even though we know that an ounce of prevention is worth the proverbial pound of cure, we don’t always do it. Equipment sales companies say that it’s difficult to convince customers of the value of preventive maintenance programs. Perhaps we simply don’t want to spend money for something seemingly intangible. Yet, prevention can be very real. Take the case of Donna Childs, the owner of an economic development firm on Wall Street in downtown Manhattan. According to The Wall Street Journal, for weeks after Sept. 11, 2001, she had no landline phone, elevator service or regular power, except for a back up generator. Because of commuting problems, her employees didn’t return for three weeks. That’s the dismal part of the story. Actually, she was back in business in a couple of days because of what she had done to prepare for just such a disaster. As time consuming as it may seem, she had stored company files online so her employees could work from home or wherever they were. She also had taken digital photos of all the tangible assets in her business and put them online with scans of her original receipts to speed up insurance claim processing. She was prepared to avoid unnecessary disputes over values. Yes, you can guess whose claims were settled first. She has written a book, Contingency Planning and Disaster Recovery: A Small Business Guide. It describes what to do to come through a disaster so you’re still in business. According to the Institute for Business & Home Safety, 25% of businesses close after a disaster. As part of disaster preparation, there are ways to protect a business from a loss of income, as well as operational costs such as employee overtime, renting temporary facilities and so forth. It’s called business interruption coverage. And it’s a very good product. We’re noticing that fewer business owners are dismissing it as an unnecessary expense. • Get To The Point by email. If you would like to receive our newsletter by email, please send your request to info@mosineeins.com. Best regards,  Tom Helbach Back to To The Point list |
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