Mr. Kugler said his company's Workers' Compensation Management System (WCMS) has been so effective because it is run in partnership with Snap-on's safety program. “That's probably one of the big successes–the inner-connectivity between those two programs, which integrates safety throughout the company,” he said.

Mr. Kugler cited Snap-on's core safety philosophy: “We deeply believe in non-negotiable product and workplace safety,” he said, explaining that when safety objectives are met, reduction of claims and costs will follow.

Founded in 1920, Snap-on Inc. is a worldwide manufacturer and distributor of high-performance tools and equipment for technicians and professional tool users. It is an S&P 500 company with companywide revenue of $2.8 billion. Headquartered in Kenosha, Wis., the firm has about 5,700 “associates” in the United States.

Snap-on's U.S. workers' comp program has an approved self-insured plan in three states, and uses a high-deductible program in all other states–excluding monopolistic states. The company's Bermuda-based captive is used to finance the self-insured retentions for both programs.

Accountability for controlling workers' comp risks is driven down to the operating level, with each Snap-on location charged for its total incurred cost-per-claim, on an undeveloped basis, up to the self-insured retention level.

This retention reimbursement program increases the company's focus on safety, claim mitigation and return to work, Mr. Kugler explained.

Originally launched in 1999, the WCMS program was given new life when previous gains in workers' comp claim reduction and injury prevention began losing momentum in 2005.

“Our 2005 global OSHA Total Recordable Incident Rate was 10.5–a 9 percent decrease compared to 2004,” Snap-on noted in its award essay.

While this result was still above the industry average of 7.39, Snap-on noted, it was clear that loss control efforts at Snap-on's sites had “reached a plateau despite diligence by all involved parties. Occupational injuries were still occurring.”

Top leadership at the company responded to sluggish frequency reduction by establishing a team to implement a new injury prevention process, dubbed the “29 Action Items.”

Because of the success previously experienced with the WCMS process, it was determined that injury management and claim mitigation would be included in the new framework. Also, principles of the company's “3-Legged Stool” became key features of the 29 Action Items.

Those three guiding principles include: corporate performance standards, injury management standards, as well as injury prevention standards and safety.

The 29 Action Items focus on:

o Candidate hiring, associate safety training and specific safety performance appraisal items.

o Hazard identification and control, workplace design and development.

o Local claim management, incident investigation, corrective action and corporate incident review program.

o Local organization of resources to execute site plans.

o Streamlined processes for funding related to safety improvements.

To get the momentum on loss control going again, the risk management department began rewarding company sites that implemented behavior-related safety performance programs.

The sites designed their recognition programs, identifying positive contributions and proactive achievements made during each year–all funded by the risk management department.

Some of the locations recognized improvements in housekeeping between departments, while others ran contests for the best safety slogan of the month, but they all looked to recognize safe behaviors and activities to reduce workplace hazards, the company noted.

Also early in the process, a corporate safety philosophy was re-established that became a core company value. Indeed, it is the first belief cited in Snap-on's “Who We Are” mission statement. The statement reads: “We deeply believe in non-negotiable product and workplace safety.”

The 29 Action Items process was launched throughout the company in three phases.

o The first phase was identification and assignment of the project team, given the task of strategy deployment.

The initial rollout targeted six key U.S. locations that were identified as having the greatest risk potential. Historically, these locations had higher workers' comp claim frequency and severity. Phase one was completed in early fall of 2005.

o The second phase started in November 2005, and involved monitoring the progress at the six pilot locations.

o The third phase was the global rollout of the process, completed by the end of the first quarter in 2006.

Concurrent with the 29 Action Items rollout, project team members became more knowledgeable about manufacturing process improvement techniques within operational business units. The purpose of using the improvement techniques was to enhance productivity with the goal of increasing financial gains, as Snap-on's quality improvement structure was built on principles of lean manufacturing.

The efforts certainly paid off. Comparing benchmarks at year-end 2008 to 1999's results:

o Ultimate comp losses are down 42 percent.

o Claim frequency per $1 million in payroll fell 72 percent.

o The total number of comp claims is down 66 percent.

o The number of lost-time claims has plummeted 72 percent.

o Litigated claims are down 94 percent.

Despite the many improvements achieved, however, the company said it is far from satisfied.

Snap-on continues to deploy a capability called Rapid Continuous Improvement (RCI)–a structured set of tools and processes that help to eliminate waste, keep manufacturing lean, and make improvements in safety, quality, delivery and cost. In 2008, RCI techniques continued to by applied to risk management issues.

For example, the risk management department sponsored an ergonomic risk factor reduction RCI event for the Mobile Company Store business unit. Lessons learned from this event were shared with the franchise business group so they could adopt appropriate strategies for their store owners.

Recognizing that risk management is a never-ending journey rather than a destination, Snap-on made it clear it does not intend to rest on its laurels when it comes to workers' comp loss control.

“Moving forward, our risk management department will be undertaking a root-cause analysis project in 2009,” Snap-on noted in its award essay. “The purpose of the project will be to identify the triggers contributing to claim severity and tactics to eliminate identified workplace hazards.”

The project is also expected to “provide our sites with the tools to more effectively investigate claims, manage the claim process and influence positive outcomes,” Snap-on added.