Can the progress in operational safety be quantified to assess potential changes in accident-related liabilities or insurance premiums?

Created August 06, 2025 at 07:42 PM

Short answer:

The press‑release you provided only tells us that Excel orate’s 2024 Sustainability Report mentions progress on operational safety, but it does not give any specific numbers (e.g., incident counts, Lost‑Time Injury (LTI) rates, Total Recordable Incident Rate (TRIR), or safety‑culture scores). Consequently, we cannot directly calculate the impact on accident‑related liabilities or insurance premiums from the information at hand.

However, you can quantify the safety‑performance improvements and translate them into an estimate of liability/insurance impact by following a systematic, data‑driven approach. Below is a step‑by‑step framework you can use once the detailed safety metrics are obtained from the full sustainability report (or from internal safety‑performance dashboards).

1. Identify the Safety‑Performance Metrics that Matter to Insurers

Metric	Why it matters	Typical source in an ESG report
Total Recordable Incident Rate (TRIR) – incidents per 200,000 work‑hours	Standard industry benchmark; directly linked to workers’ compensation costs	“Safety performance” section, usually includes TRIR, LTIR (Lost‑Time Incident Rate)
Lost‑Time Injury Frequency (LTIF)	Measures severity (days lost) → higher indemnity claims	Same as above
Severity Rate (lost days per incident)	Indicates cost per incident	Typically in a “Safety outcomes” table
Number of Lost‑Time Injuries (LTIs)	Absolute count used for frequency calculations	Report’s “Incident summary”
Near‑miss reporting rate	Leading indicator of safety culture	Often in “Safety culture and training” paragraph
Safety‑Culture Scores (e.g., safety climate surveys)	Predicts future incidents; insurers look at leading‑indicator scores	“Safety culture” or “Employee engagement” sub‑section
Environmental‑Health‑Safety (EHS) audit compliance %	Compliance risk reduction	“Governance” or “EHS management” sections
Root‑cause analysis completion %	Demonstrates corrective‑action capability	“Operational excellence” description
Investments in safety tech (e.g., wearables, AI‑based monitoring)	Shows proactive risk mitigation	“Capital expenditures for safety”
Incident trend (year‑over‑year change)	Trend direction informs future liability	Usually shown as a line chart or table

Takeaway: If you can extract at least three of these metrics for 2024 and compare them to 2023, you have a quantifiable baseline to discuss with actuaries or insurance underwriters.

2. Quantify the Change (Illustrative Example)

Assume the 2024 report provides the following data (hypothetical numbers; replace with actual figures from the report):

Metric	2023	2024
TRIR (incidents/200k hrs)	3.2	2.5
LTIF (incidents/200k hrs)	1.8	1.3
Total LTIs	12	8
Lost‑time days	150	90
Safety‑culture score (out of 100)	78	84

Step‑by‑step calculation

Calculate percentage improvement:
- TRIR reduction: (3.2‑2.5)/3.2 = 21.9% reduction
- LTIF reduction: (1.8‑1.3)/1.8 = 27.8% reduction
- LTI count reduction: (12‑8)/12 = 33.3% reduction
- Lost‑time days reduction: (150‑90)/150 = 40% reduction
- Safety‑culture score increase: (84‑78)/78 = 7.7% increase
Convert to financial impact (rough estimate):
- Average workers‑comp cost per LTI (industry average for the sector) ≈ $80,000–$120,000 per lost‑time event.
- Estimated cost reduction: 4 fewer LTIs × $100,000 (mid‑point) = $400,000 lower expected claims for 2024.
- Lost‑time days reduction reduces wage‑replacement costs: 60 fewer days × average daily wage ($250) = $15,000 additional savings.
Insurance premium impact:
- Insurers often discount premiums 2‑5% for each 10% improvement in TRIR/ LTIF (the exact factor depends on insurer policy).
- With a ~22% TRIR improvement, you might expect 4–10% premium reduction, ceteris paribus (no other rating changes).

Result: If the above numbers were real, Excel orate could argue a $400k+ reduction in expected claims plus a 4–10% reduction in insurance premiums for the next underwriting cycle.

3. How to Use the Data in Practice

Gather the exact figures from the full 2024 Sustainability Report (or internal safety dashboards).
Create a “Safety KPI Dashboard” that tracks the key metrics listed above on a quarterly basis.
Model liability exposure:
- Use an actuarial model or simple “frequency‑severity” calculation (e.g., Expected claims = Incident frequency × Severity per incident).
- Plug your 2024 numbers into the model and compare to 2023 baseline.
Engage your insurance broker or actuary:
- Provide the KPI trend chart (e.g., TRIR 2023‑2024) and the financial impact estimate.
- Discuss whether the insurer can apply a safety‑performance discount or a loss‑prevention rebate.
Document the “control” environment:
- Evidence of safety‑technology investments, safety‑culture surveys, and root‑cause analysis completion rates strengthens the case for lower premiums.

4. What to Do Next (Action Checklist)

Action	Why it matters	Where to find/ how
Obtain the full 2024 Sustainability Report	It will contain the exact safety numbers, trend graphs, and narrative about safety initiatives.	Company website → Investor Relations → ESG/ Sustainability Reports
Extract the raw incident data (numbers of LTIs, total incident hours)	Enables precise calculation of TRIR/LTIF.	“Safety Performance” or “Operations” section of the report
Verify the methodology (e.g., whether incident counts are “recordable” per OSHA/ISO standards)	Consistency with insurer’s definition is needed.	Appendices of the report or internal safety SOPs
Collect the same metrics for the prior year(s) (2022, 2023)	Trend analysis requires at least two prior points.	Prior-year sustainability reports or internal safety logs
Compute year‑over‑year change (percentage & absolute)	Quantitative basis for discussion.	Excel/Power BI
Translate to financial terms (cost per incident, lost‑time day cost)	Shows monetary impact.	Use internal cost data or industry averages
Engage a risk‑management consultant (optional)	To validate methodology and present to insurer.	External risk consultants or actuarial services
Request a premium review with your insurer	Present quantified improvements and request premium adjustment.	Insurance broker or insurer’s account manager
Update the KPI dashboard quarterly to track ongoing progress.	Demonstrates continued improvement.	Internal KPI dashboard, shared with insurer for future renewals

5. Caveats & Limitations

Limitation	Impact on your analysis
No numeric data in the press‑release	The above calculations are illustrative; you need actual numbers.
Industry‑specific premium formulas are confidential	Insurance premium adjustments are discretionary and depend on the insurer’s rating model.
Other ESG factors can affect premiums (e.g., environmental spills, ESG‑linked financing).	A holistic ESG score may also affect the premium (sometimes a “bundle discount”).
Regulatory changes (e.g., new OSHA rules) could alter liability exposures despite safety improvements.	Monitor regulatory updates in each operating jurisdiction.
Geographic diversification – Excel orate operates globally, and insurance rates vary by country.	Breakdown safety metrics by region to isolate high‑risk locations.

6. Bottom‑Line Recommendation

Get the exact 2024 safety metrics from the full report.
Calculate the concrete changes (TRIR, LTIF, LTI count, lost‑time days, safety‑culture score).
Translate those changes into a quantitative estimate of reduced liability (e.g., $400‑$600k in reduced expected claims based on industry‑average cost per lost‑time incident).
Present this quantitative case (including trend charts and financial impact) to your insurer; request a risk‑based premium adjustment or a safety‑performance discount.

If the full report confirms significant improvements (≥20% reduction in incident rates, a higher safety‑culture score, and tangible safety‑technology investments), there is a strong basis for negotiating lower accident‑related liability exposure and possibly securing a 4–12% reduction in the next-year insurance premium—subject to the insurer’s internal rating criteria.

Next steps: Download the full 2024 Sustainability Report, extract the data, run the quick “frequency‑severity” calculations outlined above, and bring the results to your insurance underwriting team. They will ask for the same data you will be using to quantify liability; having the numbers prepared ahead of time will speed up the negotiation and potentially result in lower insurance costs for the next policy period.