They pass a portion of that risk to reinsurance companies that specialize in that market. Self-insurers do not assume the full risk either. Reinsurance limits risk in the aggregate as well as per occurrence. That is, aggregate coverage caps the total amount of losses at a predetermined amount. The specific or per occurrence coverage provides protection over a predetermined deductible for one occurrence regardless of the number of claims in that one event.
Reinsurance takes the uncertainty out of self-insurance.
With a claim procedure established by the self-insurer and the claims organization, clear cut claims should be paid immediately. This improves employee relations. At least, with the employees that are important to the employer. The new procedures for return to work, preferred provider organizations and utilization review along with other managed care techniques, all contribute to lower cost of claims along with early return to work of the employee. All of this, without any cost or obligation.