He voiced concern, however, over future trends. "When underwriting is good, the conventional wisdom is the industry then decides to go and shoot itself in the foot with the underwriting cycle."

Mr. Schuford noted that investment income relative to premium has remained flat for the last five years.

John Santulli, senior vice president of marketing and field operations for PMA Insurance Group, talked about market conditions from the risk manager's perspective.

Mr. Santulli described current market conditions as the "intersection of a lot of different forces," including economic conditions, loss drivers and "what's happening in the general industry that may drive capacity into a line of business or take capacity out of a line of business."

He noted that there are always concerns with regulative issues and how they will impact carrier performance and profitability. Legislative reforms could be impacted by court actions. This, in turn, could create issues and market pressure, influencing carrier behavior, he said.

Mr. Santulli advised risk managers to "ride the wave." He said that "things are pretty good right now, the environment is generally positive, but you have to be aware. Stay informed. Understand what's going on with the industry, know what's going on in the states where you have operations and where are the hot spots."

Maureen McCarthy, vice president/manager, national market workers' compensation claims with Liberty Mutual Group in Boston, said that rising medical costs mean risk managers need to put together the best program possible.

To manage and control medical loss, she recommended specialization. At Liberty Mutual, she said, "5 percent of our open claims account for about 42 percent of our outstanding medical dollars. That's an opportunity for incredible specialization." She added that only 25 percent of that 5 percent are actual catastrophic losses. The rest are "slow developing, high exposure medical claims."

Ms. McCarthy described these as claims that "look like everything else," and usually start as soft tissue injuries. She noted there are usually signs in the first year that a claim will not be typical.

She also recommended making sure "you're not a passive recipient of reform, but you're an active participant in making sure the reform is successful--starting with the crafting of the law and moving on to the promulgation of the regulations."

Pamela Rippens, senior vice president, operations, with Specialty Risk Services, said that reform offers opportunities and challenges for risk managers.

She said California, with $118 billion in premium, has had a significant impact on the workers' comp market. Some of the keys to success in California are:

o Use of utilization review regulations with evidence-based medicine since 2004.

o Legislation dictating tight control of outpatient facility fees and treatment limits.

o Aggressive implementation by many employers of certified medical providers.