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A Reflection on the Las Vegas Slaughter

You just never know.

Wednesday, Jan. 16, 1991. I was on a flight to the West Coast when Desert Storm started. The pilot came on and told us about President Bush’s speech. He asked us to pray for our solders in harm’s way and for our country.

Tuesday, Sept. 11, 2001. I was at a conference in Disney World when a trickle of news reports quickly turned into the media tsunami that forever changed the trajectory of our culture. We gathered in the hotel ballroom to address questions as a group. Over the next couple of days, I had customers and friends melt in my arms, overcome with grief. We comforted one another as we struggled to try and make sense of the terrorist attacks, making arrangements to get people home, renting cars, vans and buses.

Friday, July 20, 2012. I was driving to a speaking engagement when I received a panicked call about the shooting in Aurora, CO, where our son and his wife live. They were safe, but he had to report to the scene immediately because some airmen in his charge were in the theater.

See also: Time to Mandate Flood Insurance?  

Sunday, Sept. 10, 2017. Hurricane Irma cut a wide swath of damage and flooding through central Florida, where we live. Our normally quiet small town is still abuzz with electrical and phone crews feverishly working to restore normal operations, making permanent repairs. Many homes in our area are a patch quilt of blue tarps. FEMA contractors are still removing debris as a convoy of trucks and equipment rumble through neighborhoods.

Monday, Oct. 2, 2017. Today, I’m in Las Vegas only to be awakened to the horrific news that we know all too well. I’ve received numerous messages over the entire spectrum of electronic communications, asking about our safety.

In these and other events, we will want to learn as much as possible. We want to know the who and struggle with the why. Much will be uncovered over the next hours and days. There are so many open questions waiting to be answered. There is so much that we don’t know.

But there is one thing that I know for certain, and I say this in all seriousness and respect. Insurance will play a vital role in the coming days, weeks and months, helping to rebuild lives, families and businesses devastated by this heartbreaking and senseless tragedy.

Working in insurance since 1972, I’ve been humbled over and over again to be part of an industry that helps people. While my career has been on the technology side of the business, there is a quiet assurance, knowing that what we do will help restore lives.

At the tender age of 19, I had my first “data processing” interview. It was for a junior terminal programmer trainee position at a large insurance company that no longer exists, paying an exorbitant $7,500 a year. After the interview, I walked to the bus stop and wondered about working for an insurance company. I replayed all the jabs and jokes that we know all too well in my mind that surround the insurance industry. Was I somehow going to be tainted by being a part of a profession that had a reputation equal to that of gas station attendants (true statistic)?

See also: Harvey: First Big Test for Insurtech 

There have been opportunities to leave the insurance industry over the years. But I kept coming back to the reality that there are precious few professions that can have such a direct, positive effect on the lives of so many as insurance.

Yes, we have our problems and detractors. Yes, we can sometimes be our own worst enemy when it comes to public perception. Yes, we could do a better job at communicating to and servicing our customers and the public as a whole.

But I count it a personal honor and privilege to serve in the insurance industry. I hope you do also.

Top 10 Changes Driven by Insurtech

With 2017 Insuretech Connect happening this week, below is one industry insider’s top 10 of the notable insurtech changes since the inaugural event this time last year:

See also: Insurtechs: 10 Super Agents, Power Brokers  

  1. Early-stage ventures are moving beyond the online/UI experience and are focused on the core industry economics — i.e. driving down the 56 cents of every premium dollar that is indemnity (loss costs), the further 12 cents needed to assess, value and pay those losses, and the circa 26 to 30 cents required to develop, distribute, select and price product.
  2. There is an increased presence of early-stage-focused VCs that have insurance chops, meaning that high-quality startups focused on more complex industry issues have smart capital for funding (there wasn’t much of that last year at this time).
  3. An extraordinary boom in insurtech investment capital means that too many businesses with little chance for success are getting funding. (How many new millennial-focused renters insurance ventures does the market actually need?)
  4. Despite the overwhelming level of capital focused on the space, valuations are generally rational. Yet, there are far too many high-profile investments that seem to make little sense, both in terms of funding levels and valuations. (I can personally attest to being recruited for two roles running pre-revenue startups that received term sheets from investors with pre-money valuations between $30 million and $40 million…exciting for the founder, but irrational in the cold light of day.)
  5. Insurance (viewed by some/many as old school and boring) is showing signs that it can lead in the commercializations of new technologies (IoT, blockchain, telematics, etc.). This can only be positive for attracting “A” talent to our industry.
  6. Lemonade has demonstrated that all of us in the industry can learn something from them. The most recent example is the zero-deductible product (and a no-rate-change protection for as many as two claims), which received unprecedented attention. While this is not new and is already offered by some, the lesson in this case is that being a marketing machine may be worth something (or Dan Ariely, the behavioral economist working with Lemonade, should be hired by us all).
  7. The intractable trend in new risk-taking capital (pensions fund, hedge funds, SWFs, etc.) is leading to “infrastructure light” risk takers — we now have some smart insurance entrepreneurs jumping in with solutions that enable this structural change.
  8. Well-established insurance vertical solution tech companies are now providing attractive exits for insurtech early-stage companies.
  9. Emergence of insurance-specific hot technologies in areas such as chatbots, machine learning and advanced analytics, etc. seems to be leading (in terms of trial by the insurance industry incumbents) the more established, industry-agnostic solutions — watch this space!
  10. The industry is all in on insurtech! Witness the presence of public company CEOs’ commentary on the topic, the abundance of CVCs, the number of corporate intra-ventures, etc. Also compare and contrast year-over-year presence at this conference.

Insurance Is NOT a Commodity!

Insurance technology was once the red-headed stepchild of financial technology. But with more than 800 insurtech startups garnering almost 150 deals totaling $3.5 billion of investment since 2015, insurtech is a force to be reckoned with.

With this infusion of new blood have come some interesting and provocative pronouncements about this great industry. Some have come from people who are smart, insightful and engaged, while others are just plain arrogant, full of hubris, with their feet firmly planted in the air. Some of these observations have been eye-opening and challenging, others benign, some uninformed, some just plain dead wrong.

Of all the things said, one is downright wrong. This pronouncement of misinformation is that insurance is a commodity, that all insurance policies are the same, that there is no real difference between policies issued from different companies.

What is a commodity?

The best definition of a commodity that I can find reads: a product or service that is indistinguishable from ones manufactured or provided by competing companies and that therefore sells primarily on the basis of price rather than quality or style.

The key word in that definition is “indistinguishable.” The products or services when put side by side act the same, delivering the same results.

A perfect example is a battery. When I need a AA battery, I go to the store and buy one. Now it does not matter what store I go to or what brand I buy. As long as it was labeled AA, I knew that it would both fit and work by delivering just the right amount of electricity (provided I put it in the right way, but we’ll save that story for another time).

See also: Has Auto Insurance Become a Commodity?  

Another example is gasoline for our cars. It really does not matter which gas station I go to, or which grade I select; the gas goes into the gas tank, and the car runs. Yes, we can debate the benefits of different additives and octane grades: regular (usually 87 octane), mid-grade (usually 89 octane), and premium (usually 92 or 93) and their impact on engine knock. But the simple truth is that I put any gas into my car and it runs.

In one sense, I understand that insurance can be thought of as a commodity. Go to a website, enter a handful of fields, and multiple quotes are presented for you to choose from. In this narrow and limited perspective, insurance can look like a commodity on the front side of the transaction.

But the real question is not if a handful of fields can get you a number of quotes, but if those policies are the same? Do they cover the same things? Will claims be paid at the same amount? If insurance truly is a commodity, policies will all pretty much look the same, covering the same things.

A Personal Example

I was in Las Vegas for InsureTech Connect when Hurricane Matthew came up the Florida coast. I got a text message from the airline that my return flight to Orlando was canceled, and I would be contacted about rebooking. Quickly looking at the Orlando airport website, I read that it was going to be closed starting Thursday noon and at least all day Friday. Once Matthew passed, airport personnel would assess the damage and then determine when to reopen and at what capacity.

I was now in full scramble mode, calling the hotel to extend my stay. The agents was very empathetic and most willing to help. This made me feel somewhat relieved until the agent cheerfully informed me that I certainly could extend my stay another night for $780! I almost said, “Is that with or without dancing girls?” But remembering that I was in Las Vegas, I found myself wondering if that might be an actual option. Holding my tongue, I thought best not to say anything other than to thank the agent for the kind offer.

Yes, I was able to find another hotel room that was less expensive. Hurricane Matthew passed without doing much damage in the Orlando area. The airport reopened on Saturday, and I was able to get home without much trouble.

The reason for telling you this story is to use it as a backdrop to see if insurance is a commodity, using perhaps the simplest form of insurance: trip insurance.

Go to a trip insurance website, enter four pieces of information, get a bunch of quotes, select one and pay for it via credit card. Very simple, very straightforward. Trip insurance certainly walks and talks like a commodity.

The question is, when did my trip insurance start? What was covered? What compensation was I due? How much could I expect? This is where our journey really begins.

Trip insurance will run you on average between 4% and 9% of the trip cost. But a survey of 10 different trip insurance policies found that the terms and payments were very different. Also, the most expensive policy did not have either the lowest deductibles or the highest benefits. As a matter of fact, one carrier that was priced around 5% of the trip cost had many of the highest benefits. Here are some details of the different policies.

 

Screen Shot 2016-11-27 at 11.07.23 AM

As you can clearly see, the coverages differ significantly in both their cost and potential benefit. Let’s walk through Delay Compensation as an example. One policy costs 4% of the trip and pays as much as $500 for a delay of 12 hours or more (not even covering the cost of my hotel room)/ Another policy costs 5% of the trip yet pays as much as $2,000 for a delay of five hours or more. The most expensive policy costs 9% of the trip but only pays as much as $1,000.

Pricing, coverage and benefits are not just mildly different, they are wildly different based on product differentiation and competition. This example is based on a simple trip insurance model. When it comes to healthcare choices, “Comparing plan premiums and deductibles only scratches the surface of what you should evaluate before selecting a plan this fall. Policy details can make an important difference in coverage and costs, but it may take some digging to uncover them.”

This caution also applies to personal insurance sold directly to the public. I’m familiar with one person who selected a personal auto carrier because it was the low-cost policy. However, when he had an accident, he discovered that the policy had no collision coverage. The few dollars he saved on the premium were insignificant compared with the $3,800 repair he had to pay for.

See also: A Brave New World: Move Away From the Commodity Trap  

Differences in coverage and payment, inclusions and exclusions across different types of insurance are as numerous as options on a Rubik’s Cube.

There are a number of other ways that insurance is not a commodity.

  • Users – a commodity does not care who is using it; it just works. The fuel in your car does not care who is behind the wheel or in passenger seats. Insurance, however, does care who is using it. With insurance, depending on circumstances and policy wording, not all drivers of your car are covered by your personal auto policy.
  • Ownership – a commodity does not care who owns it; it works. With insurance, a vehicle may be owned by a company with a commercial auto policy, but that does not guarantee that the vehicle is covered.
  • Termination – a commodity works until it stops; the battery runs out of energy, the car runs out of fuel. That’s it. Insurance, however, is still in effect beyond its expiration date. Florida victims of Hurricane Matthew have five years to file a claim.
  • Location – a commodity behaves the same regardless of where it is used. Put a battery into a device, and it provides energy no matter where you go. With insurance, the location matters greatly. While most states have either two or three years to report a real estate property claim, the timeframe varies wildly from a low of one year to a high of 10 years depending on the state. Also, when you drive your car into Mexico, the gas still works, but your auto insurance stops at the border.
  • Consistency – a commodity does what it does; its specifications or requirements do not change over time. A battery is designed to deliver so much power over time based on its design. Batteries can lose their charge, and gas can degrade, but their basic function does not change. The same cannot be said about insurance, even if it is written into policy wording or legislative edict. Two recent court cases have dramatically changed the cost and coverage of workers’ compensation policies in Florida. The first removed limits on how many billable hours and cost can be accumulated by claimant attorneys. The second changed the duration that temporary total disability claims are to be paid, from two years to five years. Both these decisions were made long after the policies they affect were sold.
  • Cost – when a commodity is produced, its costs are known. You know all the parts of the battery, you source them, assemble the battery, distribute and sell them. The same can be said for gas. With a commodity, costs cannot suddenly go up for products already sold. But when you price and sell an insurance policy, you cannot predict all the costs or even what is to be paid and for how long. Think about the two Florida workers’ compensation examples above; policies were priced and sold based on “known” limitations on both claimant attorney fees and temporary total disability payments. Insurance companies will now pay unanticipated claim costs above and beyond what was originally covered, even though they were not factored into the original pricing. And there is no way to go back to the customer and charge extra for the added claim costs that are above and beyond the original policy.
  • Importance – if a battery fails, you throw it out and get another one. If fuel is old or contaminated, your car may sputter for a while, but that’s it. However, insurance is oh so much more important. Insurance gives stability to our financial markets. Insurance encourages entrepreneurial investment and risk taking. Insurance helps people rebuild their lives when tragedy happens.

Insurance is vitally important to our economy. Virtually no commerce is conducted without it. Insurance is also wildly complex, varying from state to state, company to company, policy to policy. It requires attention to detail, rigorous and serious thought.

For additional information on this topic, follow the links below;

Insurtech Has Found Right Question to Ask

Like many others, I took two days out of a busy week, flew to Las Vegas (why not?) and joined the standing-room-only crowd at the inaugural InsureTech Connect 2016, recognizing that Dreamforce, the HR Tech Conference and my day job of serving my clients were all competing for my attention.

I’m glad I did!

Not only did I reconnect with old friends/colleagues, meet new ones and conquer the Stratosphere, but I also spent two days surrounded by some of the best and brightest in insurance. It left me feeling that one immutable fact is clear: Change is in the air. In that spirit, here are some of the things I took away and the questions I’m going to keep in mind to help move my clients and the insurance industry forward.

[One note: I’ve resisted the urge to call out specific examples of startups that support my points. That’s not because I don’t have those examples. It’s because I didn’t meet every startup, I didn’t hear every panel and story, and there are too many great examples of creative work being done to solve some of the biggest challenges this industry faces. So I’ll err on the side of not creating potential bias. If you want to put me on the spot, feel free to call me and ask me who impressed me the most.]

“What’s Your Problem?”

The first time I heard that question, I did a double take. The second time I heard it, I understood. And the third time, I decided it’s the right question to ask.

See also: Insurtech: One More Sign of Renaissance  

Maybe it’s the fact that I spend most of my time talking to incumbents, but I’m not used to hearing the problem statement first. At the conference, every conversation I had with a startup began quite clearly with the problem that the startup is working to solve and the (potential) solution. It’s core to their introduction but, more importantly, it’s core to their DNA. It’s refreshing.

We should all wake up every day with the simple goal of solving one problem — a small one. Think about how much an organization could accomplish with that orientation. Think about the impact it could have on customers. Sure, not all problems can be solved in a day, and some, perhaps, can’t be solved — period. But think about the potential for idea generation, or, dare I say, innovation. Start with the problem.

Sure, I was interested in each person’s background. Where he/she was before, what experiences shaped his/her journey, etc. These are important questions that help qualify my impressions of whether that person can solve the problem. But all too often I hear people introduce themselves with their role/title, company, responsibilities, etc. I, for one, plan to remind myself to talk about what problem I’m solving — and how.

Product? Or User Experience?

There was also healthy debate at the conference as to whether a better experience was worth a premium and whether it could the answer to breaking the cycle of price commoditization. The startups surely believe it to be the case, and they aren’t wrong. An elegant experience is a compelling source of differentiation.

There was quite a bit of discussion, though, as to which comes first, user experience or the product. Is the user experience the key? Will product rule the day? The consensus was that both are necessary. No matter how great the product is, if you can’t sell and service it, it’s unlikely to be sustainable and successful. If the experience stinks, no one is likely to buy the product, no matter how much that product is wanted, is necessary or is great. Both are critical. Neither, alone, is enough. This is nothing new.

But, as I frequently discuss with clients, being great at everything (product, distribution and service) is hard, expensive — or both. I liken it to being the best “all-around athlete.” How many people wake up one day, decide “I’m going to be a decathlete” and execute? That would take too much time, too much effort and, in all likelihood, could result in being mediocre (or worse) at all 10 sports.

Pick where you want to be great, and be outstanding at it. Do it effectively, elegantly and unlike any other. Be good in most other areas. And where you have issues, start to solve one problem at a time. Rome wasn’t built in a day.

Incremental or Transformative?

How many times did we hear the word “incremental”? 10 times? 100 times? More? I lost count. My point is that small incremental changes can add up, potentially even to something big. Piece together a bunch of small ideas, small successes and now you’re beginning to talk about a meaningful and achievable plan. Piece together a few startups each solving a different problem — and maybe now you’ve veering into the realm of transformation.

See also: Calling all insurtech companies – Innovator’s Edge delivers marketing muscle and social connections

What is so bad about incremental change? Small problems are easier to understand, to dissect, to solve. It’s easier to gain support for small projects. It’s easier to measure the effect of small changes to measure the return on small investments. Maybe most importantly, it’s easier to stomach the loss on a small failure.

Is Failure OK?

I’ve spent my whole career avoiding failure, afraid of failure. I’ve even avoided the word. It was not an option. But, let’s be honest, there are very few places where failure is catastrophic. Sure, I’d like to avoid it entirely when it comes to flying, but, otherwise, is it so bad?

It was liberating to hear open and honest talk of failure. How many startups are going to make it? Not all of them; that’s for certain. Does anyone want to fail? Of course not. But learning from failure is part of the startup culture.

Looking out of my hotel room window, I was struck by the hulking darkness of a hotel north on the strip. Surely it was too large to be empty. A little research later, I came across the story of the Fontainebleau Las Vegas, a $2.9 billion, 3,889-room, 68-story, unfinished resort and casino development. Construction topped out in 2008, and it still stands as the second tallest structure in Las Vegas (second only to the Stratosphere, but more on that later). Yet at 70% complete, it fell into bankruptcy and sits unfinished to this day, nearly a decade later. It’s only one example of failure on the Strip — there are several unfinished hotel projects. But all of the other failures are smaller and less complete. The Fontainebleau Las Vegas stands as a lesson to me: if you’re going to fail, fail small, fail early and learn as much as possible from the experience along the way.

Days, Months or Years?

I’m not known for my patience. Startups aren’t either. Insurers, on the other hand, aren’t known for their agility. I’m reminded of the fable of the tortoise and the hare.

What struck me throughout the stories I heard in the two days was the need to quickly demonstrate value or to die trying. Startups have no choice; their business model depends on it. Insurers aren’t all that different, beholden to their stakeholders or Wall Street, but they tend to measure the horizon of projects in quarters or years, not days or weeks. Insurers with their “endless capital” don’t have the looming fear of running out of cash. But maybe that motivation would be beneficial.

I heard numerous stories of how startups proved possible in weeks what insurers might have otherwise spent months or more trying to build. Was the result production-strength? Probably not. Will it need to be? Sure.

Nothing can be more frustrating than watching a great idea die on the vine because the overall effort necessary is too big, too long, too costly and, therefore, impossible to justify, to start and to finish. Take a use case, prove it works in weeks, implement it, expand on it and move on to the next test. Success begets success. Small successes can compound. Projects shouldn’t take months or years.

No Risk, No Reward

My time at the conference ended with a personal test. In my last meeting, just as we were wrapping up and I was starting to think about settling in for a couple of hours to catch up on the better part of two days’ worth of missed email, I was posed a simple question: “Did you know there are rides on top of the Stratosphere?” Um, no. OK, I’ll bite. “There’s a ride that shoots you up in the air a couple hundred feet and then lets you free fall back down. Want to go with me?” Normally, I’d squeeze every minute of productivity I could out of a business trip. Normally, I’d miss out on an opportunity to stop, smell the roses and have a personal experience worth telling about. Normally, I’d say no.

But instead, I asked only one question: “Do I have to sign any waivers that make it clear that, if I die, my insurance policies won’t cover me? Because I’ve got a rule against any activities that nullify my insurance coverages.” I got a laugh but not an answer. (I was serious — that’s a rule of mine.) But I said yes. And I’ve got the views, the pictures and the story to remember as a result.

See also: 8 Exemplars of Insurtech Innovation  

The organizers of InsureTech Connect took a risk. Would speakers line up? Would people register? Would the panel discussions be enlightening? Would people stand on the little squares and make Brella a success? The answer was an unambiguous — and resounding — yes. And I’m thankful the organizers took this risk, because we all benefited greatly from the two days, from the healthy debate, from the new connections and from the experiences we collectively had.

I, for one, am counting the weeks (not months) until the second annual InsureTech Connect. What will we accomplish between now and then? I can’t wait to find out.

These are just my impressions. If you agree, please let me know. If these are trivial or obvious to you, please share your thoughts. If you disagree, tell me why. And for those of you who are in Vegas, did you know there are rides on the top of the Stratosphere?

The Lesson Behind the Florida Ruling on ‘Exclusive Remedy’

In an episode of the hit television show “The Big Bang Theory,” leading character Dr. Sheldon Cooper, in admonishing his friends over his correct assumptions as to when they should depart for a movie and thus avoid a long line, decided not to say “I told you so.” Instead, he opted for the much more refined, “I warned you thusly.” I plan to emulate Dr. Cooper and make liberal use of that phrase today.

While pundits and legal experts have been carefully watching major RICO cases and other test cases around the country that threaten the sanctity of “exclusive remedy” within workers’ compensation, out of the legal swamps of Florida an unexpected ruling from a previously undiscussed case has surged forth to consume the topic in its entirety. A Miami judge on Wednesday declared Florida workers’ compensation, as an exclusive remedy, unconstitutional based on the continued erosion of benefits from when the system was established. While the final act on this play has yet to take the stage, it is a potential wake up call for the industry. After all, most of us didn’t see this coming. Most of us, that is.

I, however, warned you thusly.

More than two years ago I wrote about a case in Tennessee that denied an electrical lineman workers’ comp benefits because he had “willfully” defied established safety rules and was severely shocked as a result. He had removed protective safety gloves to attach a small nut that was very difficult to handle when the gloves were in use. The court essentially assigned blame to him in the case and found he was not entitled to benefits for his injuries, because he had violated established safety protocols that otherwise would have prevented the accident. While insurance professionals and employers around the country were taking a victory lap over this decision, I assumed a position that put me at direct odds with many. I warned that the continued erosion of the no-fault doctrine of comp was a two-edged sword and that eventually employers would get cut by the same instrument they were championing at the time.

Specifically, I wrote:

“While this decision might be a short-term victory for employers and perhaps a strong reinforcement of safety protocol, I am concerned that it fundamentally undermines the notion of workers’ comp at its core, and ultimately threatens the benefits offered those same employers; namely the concept of exclusive remedy. Employers cannot have their cake and eat it, too.

The employee made a mistake. That is quite often how these accidents happen. While there are exceptions for horseplay, drug use and extreme negligence in some jurisdictions, largely comp pays these claims because, quite frankly, that was the deal. This company has other avenues with which to deal with this if it so chooses. It can document, demote, even terminate the employee for failing to follow required procedures. But by refusing to pay his claim, and successfully getting the courts to agree, the door is open for any accident, any “willful” mistake to be used in the denial of all claims. That might be logical on the surface, but it is entirely contradictory to the no-fault precept that workers’ comp is based on. It threatens the future of comp as it was envisioned and followed. Once the “blame game” begins, employers may not have to wait long to find that it is a two-edged sword.”

I warned you thusly. I so warned you thusly.

While the case in Florida is not related to our Tennessee lineman, the corrosive principles that led to the decision share a lineage; a line that leads to reduced benefits and coverage in exchange for cost reductions. They are both cases dealing with erosion of the “Great Compromise” that created workers’ comp to begin with.

The case in Florida hinges largely on 2003 reforms that eliminated benefits for permanent partial disability. The court found that eliminating those benefits violated injured workers’ rights and determined that workers are therefore free to pursue tort claims for work-related injuries. Two other challenges to the Florida comp statutes and 2003 reforms are already scheduled for review by the Florida Supreme Court, so the entire cost-reducing effort is currently at peril. Employers that celebrated the specific reduction in benefits and cost are now likely panicked at the prospect of a new and looming liability.

You cannot say I did not warn you thusly.

At a bloggers panel at the National Workers’ Compensation Conference in Las Vegas last year, we touched on this topic and were discussing cases that threatened exclusive remedy. One employer in the audience stated out loud, in response to the concept of denying benefits based on culpability, “but it is their fault.” I responded by reminding them of the “no-fault” concept of workers’ comp and the Great Compromise that brought it about in the first place. I then asked the audience which of them would like to be held personally liable, evenly criminally liable, when their company is found “at fault” for a worker’s injuries. Would employers willingly accept tort claims when it is shown they were negligent or at fault for an accident?

Not a single person in the crowd of 300 responded in the affirmative. Boy, were you warned thusly.

We are rapidly approaching a point where societal changes and entitlement expectations will require major overhauls in the thought processes within our industry. We need an attitude shift within workers’ comp. We can no longer manage claim cost and severity rating by legislative fiat. We, both the industry and the employers it serves, need to embrace a new philosophy for dealing with these challenging issues. A return to more personal claims management within a system geared for workers’ recovery is the only path that will accommodate the needs of all parties, while preserving the intent and scope of the original Great Compromise.

In the interim, we will continue to struggle with balance and reforms. I do not necessarily agree with the Florida court decision, but I understand what led us to this point. The legislature, depending on appeal activity, will no doubt address the issue if needed and restore certain benefits to preserve the exclusive remedy portion of its law, but I fear this will leave a lesson not yet learned. We must understand our history, or we will be bound to repeat it at some point in the not-too-distant future.

You cannot say you were not warned thusly.