Tag Archives: walls

Essential Elements on School Risk Control

At the 2017 annual PRIMA conference, Ariel Jenkins and Kevin O’Sadnick of Safety National led a conversation on the essential elements of school risk control programs.

School visitor management consists of entrance hardening (add extra set of doors or windows, and visitors have to check in), criteria for visitors (parents, teacher visitors and grandparents), 100% use of photo ID for staff/visitors and use of security cameras.

Violent, Combative and Disruptive Students

De-escalation/assault cycle training should be able to recognize this behavior and early intervention and keep an event from getting out of hand. There need to be clear protocols that consist of restraint training and use of school resource officers. Violence against teachers needs to be reported and documented.

See also: Future of Insurance: Risk Pools of One  

Active Shooter Event

Effective methods to reduce active shooters events are visitor screening procedures, school/district website content, training for staff (Run,Hide, Fight method), and lockdown procedures (general or emergency lockdown). Post-incident procedures include an emergency communication (is there a procedure in place and specific to each event?), PR/news/press releases and crisis and grief counseling.

Controlling Special Education Risks

  • 46% alleged discrimination against students with disabilities
  • Claim of not receiving “free appropriate public education”
  • Increased complaints related to retained and isolation

Is a special education teacher considered a high-risk job? Yes. There is more emphasis on motor skills learning activities. A student-assisted transfer requires hands-on physical assistance to move a student. The risk of these are biting, hitting and back injuries. The transfers are not normally voluntary. In a school setting, the safe patient handling policy should address the use of mechanical devices to the place of manually lifting and transferring students with disabilities. Training in positive behavior management and de-escalation. For a lift policy, best practices is 30 to 35 pounds maximum lift without equipment and no two-person lifts or transfers without using equipment. If a student cannot safely, reliably and cooperatively stand and pivot for a student-assisted transfer, use adaptive mobility devices.

Social Media and Bullying

There are different measures and different trends we can look at to create student and teacher interaction policies. Make sure to document any instances that occur. There are outside vendors that have training for monitoring social media. There need to be consequences and repercussions for bullying and social media intimidation. These policies and procedures need to be shared with parents.

See also: Space, Aviation Risks and Higher Education  

Risk management is ever-changing and evolving in K-12 schools. It is vital to stay informed and stay on top of emerging issues that can affect the safety of the staff and students in your school districts. It is important to create policies and procedures to ensure the safety of all involved.

Opportunities for Treatment Guidelines

Medical treatment guidelines can be a great benefit to any workers’ compensation system. They can prevent unnecessary medical procedures and the prescribing of potentially harmful medications. However, they are not all the same, nor are they without challenges. Understanding a jurisdiction’s strengths and shortcomings, taking a strategic approach to developing treatment guidelines and following some common-sense tips can lead to better outcomes for injured workers — and, ultimately, lower costs for payers.

That’s the view of workers’ compensation experts who spoke during our Out Front Ideas webinar on the subject. The panel included representatives from the regulatory, medical, pharmacy benefit management and third-party administrator communities. They were:

  • Amy Lee – special advisor, Texas Department of Insurance, Division of Workers Compensation
  • Dr. Douglas Benner, MD – chief medical officer from EK Health and national medical director of Macy’s Inc, Claims Services
  • Mark Pew – senior vice president, PRIUM
  • Darrell Brown – executive vice president, chief claims officer – Sedgwick.

Dr. Benner brought a unique and important viewpoint to the panel. As a practicing physician for over 30 years, he has firsthand experience practicing medicine under guidelines. He has also been involved in the development of treatment guidelines for both the Official Disability Guidelines (ODG) and the American College of Occupational and Environmental Medicine (ACOEM).

A majority of states now have some type of medical treatment or return-to-work guidelines in their workers’ compensation systems, and nearly half either have or are considering drug formularies. But there is some confusion about how they work within various jurisdictions and how effective they are. The speakers gave us great insights to better understand how to develop and implement successful treatment guidelines and how to get the most out of them.

Texas’ Example

Many in our industry look to Texas as a state with highly effective treatment guidelines. Texas had some of the highest workers’ compensation costs in the nation, along with some of the poorest return-to-work and patient satisfaction outcomes. After implementing treatment guidelines and a drug formulary, the state now boasts some of the best workers’ compensation outcomes in the nation, as well as lower costs.

But the Texas story is not quite as simple or transferrable as you may think. As our panel explained, it took a multi-year, painstaking effort by representatives in all facets of the system to develop and implement the model now in place. The change also required a deep understanding of the workers’ compensation system as it existed in Texas for the treatment guidelines to get to the point they did.

The changes in Texas began with legislative reforms in 2005. It would be two more years before the treatment guidelines were implemented and three years after that for the drug formulary to begin being phased in — first with new claims, then with legacy claims. One of the keys to Texas’ success was a change to include evidence-based medicine in the guidelines.

See also: Texas Work Comp: Rising Above Critics  

EBM

Evidence-based medicine (EBM) is a term we hear often these days, but there’s disagreement about what it truly means. Texas sought to clarify the issue by including a statutory definition in the treatment guidelines, so it defined EBM as follows:

“Evidence-based medicine means the use of current best quality scientific and medical evidence formulated from credible scientific studies, including peer-reviewed medical literature and other current scientifically based texts, and treatment and practice guidelines in making decisions about the care of individual patients.”

Texas switched to basing the guidelines on EBM to reform the previous consensus-based model, which was perceived as allowing for too much unnecessary medical care. EBM was chosen as the standard for selecting treatment guidelines, return-to-work guidelines and adjudicating claim level disputes on medical care. It is also the standard expected from healthcare providers, payers and others.

The idea of EBM is to provide a systematic approach to treating injured workers based on the best available science. Ideally, medical providers should base their treatment regimens on EBM, although it is also important to consider the specific needs of each individual patient.

Unfortunately, some of the most pervasive medical conditions among injured workers have not been as heavily researched as other ailments, such as heart disease or hypertension. This means EBM is not the basis for every single medical condition. The developers of EBM for workers’ compensation consider all available research, ‘weigh it’ in terms of quality then fill in the ‘gaps’ with a consensus of expert panels. That does not mean those particular guidelines are not scientific. For example, there is little research indicating someone with chest pains should undergo an electrocardiogram (EKG), but medical common sense dictates that is the appropriate action to take.

Formularies

Ensuring injured workers are given the most appropriate medications for their conditions is, or should be, the goal of drug formularies in workers’ compensation, according to the panelists. Not all drug formularies are the same, and it is helpful to understand their differences.

As we learned in the webinar, drug formularies started in the group health area and were primarily a way to reduce costs, because out-of-pocket expenses are involved. There are different tiers to guide the best drug for the patients with the aim of finding the one that is the least expensive.

Because workers’ compensation does not typically include co-pays, the goal for many jurisdictions is clinical efficacy — finding the medication that will result in the best outcome for the injured worker and get him or her back to function and, ultimately, work.

See also: States of Confusion: Workers Comp Extraterritorial Issues

States such as Texas have a “closed” drug formulary, although compared to closed formularies in group health, it is not the same. Whereas in the group health context, some medications will be disallowed in terms of reimbursement, formularies in workers’ compensation instead require pre-authorization for certain medications. The term “preferred drug list” is more appropriate for workers’ compensation.

Texas uses the Official Disability Guidelines for its list of “Y” and “N” drugs. All FDA-approved drugs are included, but those on the “N” list are not automatically paid for through the workers’ compensation system.

Almost immediately after Texas implemented its drug formulary, prescribing patterns changed. Physicians began prescribing more medications on the “Y” list, rather than justifying the use of those on the “N” list. That was among the main goals of the drug formulary — to get prescribers to avoid prescribing opioids and other potentially dangerous drugs right from the start.

The formularies in workers’ compensation systems in other states differ. However, the goal is the same: to encourage providers and others to prescribe medications that are the best for the injured worker, considering his or her injury and any comorbid conditions. Patient safety, rather than lower costs, should be the goal.

Many in the industry are closely watching California as it faces a summer deadline to finalize its drug formulary. There are estimates that the state could see about 25% of its currently-prescribed medications put on the fast track for approval and thus avoid delays from utilization review once the formulary is implemented.

Challenges

Having heard about the many potential benefits of treatment guidelines, we then turned to the panelists to discuss some of the obstacles and how to overcome them. Educating all stakeholders was among the most important strategies they mentioned.

For example, a claims examiner may not see a recommended treatment in the guidelines for a particular jurisdiction and issue a denial for a requested procedure. But, upon further investigation, the treatment requested by the provider may be the best for all considered.

In a California case, a claim was halted for several years — with indemnity expenses continuing to be paid — as the parties awaited the outcome of a dispute over an MRI scan. The case points to the need for those involved in a claim to be flexible. While following the guidelines should be the general rule of thumb, it’s also important that those overseeing a claim take a holistic approach and see what really makes sense for the injured worker.

It is also vital to educate physicians on what to do to gain approval for treatments that stray from treatment guidelines. Often, little or no explanation is provided as to why a particular patient needs a certain procedure or medication. Without complete information, the rate of denials increases. Texas took the unique step of implementing Appendix B to provide guidance to physicians on how to document exceptions to its guidelines.

The consistency (or lack thereof) of guidelines can be frustrating, especially for organizations that operate in multiple jurisdictions. Again, those involved in the claim need to be informed about the guidelines used in each.

It is important that everyone involved in reviewing treatment recommendations — including claims examiners, nurses, physicians and even administrative judges — understand the treatment guidelines and their limits for the jurisdictions in which they operate. The decisions each person makes must be consistent for the guidelines to be most effective.

Keeping the guidelines current is another challenge for some jurisdictions. With medical science changing rapidly, it’s best if jurisdictions find a way to get updated information published as soon as possible and make it easily accessible.

The Future

While a majority of states have medical treatment guidelines in their workers’ compensation systems, 21 did not at the time of the webinar. About 20 states either have or are considering drug formularies.

There are additional efforts underway on the state level to address medical care for injured workers. Several Northeastern states, for example, have placed limits on the number of days for which opioids can be prescribed. Some have limited it to seven days, while New Jersey is imposing a five-day limit. That trend is expected to continue.

See also: 25 Axioms Of Medical Care In The Workers Compensation System  

Other states are looking at helping wean injured workers off opioids. New York recently rolled out a new hearing process to address claims that involve problematic drug taking.

Progress is being made to improve injured workers’ outcomes and treatment guidelines, and drug formularies are a big part of these efforts. The goals of better safety and clinical outcomes, quicker return-to-work, shorter treatment periods and better overall outcomes should drive the conversations going forward.

To listen to the complete Out Front Ideas with Kimberly and Mark webinar on this subject, please visit Out Front.

2017 Issues to Watch in Workers’ Comp

The first Out Front Ideas with Kimberly and Mark webinar of 2017 provided our thoughts on the 20 Workers’ Compensation Issues to Watch in 2017. What follows is a summary of the issues discussed:

1. Election Impact

The Department of Labor under President Obama had made it clear that they felt state workers’ compensation systems needed reform and they were prepared to recommend minimum benefit standards to the states. Trump’s recommendation for Secretary of Labor has been a vocal opponent of many federal labor regulations. For now, any talk of the Federal Government getting involved in state workers’ compensation issues seems to be on hold.

However, one issue that could involve the federal government is related to potential costs being shifted from workers’ compensation to social security disability. Efforts to preserve the solvency of social security could result in action intended to limit this cost shifting.

2. Healthcare Reform

Regardless of which side of the aisle we find ourselves, surveys have shown that most Americans believe the Affordable Care Act is not working as it was originally intended or as well as they would like.

A few things are clear, access to health insurance does not dictate better health. If care remains unaffordable, people will not access care for themselves or their family. Healthcare is increasingly complex and accessing the right care at the right time remains a struggle for the general public. We are challenged to advance the approach of well care when, in fact, we remain largely a sick-care system.

While we wait to see how the GOP evolves health reform, we are hopeful that efforts underway to shift from fee-for-service to value-based and outcomes-focused care will continue to advance. We hope healthcare suppliers will continue to advance population health wellness as much as they focus on chronic disease. Kimberly George views this as the single most important issue to watch in 2017.

3. OSHA

Another potential impact of the election results is the direction OSHA may take in 2017 and beyond. In recent years, employers have complained that OSHA was more focused on enforcement than education and training. In fact, OSHA did shift resources out of education into enforcement. Recent OSHA policies such as the publicly-accessible online database and restrictions on post-injury drug testing were met with significant resistance from the employer community. OSHA falls under the Department of Labor and, as mentioned before, the expectation is that the Department of Labor will have a new direction under the Trump administration.

4. ADA/FMLA

During the Obama administration, we saw an increase in enforcement actions and also broadening of regulations that placed more burdens on the employer. Leave-of-absence regulations have become increasingly more complex over the past eight years.

ADA accommodation requests were initially related to ergonomics and transitional work accommodations following an illness or injury. Today, they have become more complex, including everything from bringing service animals into the workplace, allergies and noise accommodations to establishing work-from-home accommodations. The list goes on and on. What constitutes a “covered” disability has evolved and employers are tasked with ensuring compliance. Under the Trump administration, the Feds are less likely to pursue actions that would expand existing boundaries of the law.

5. Rates and Premiums

One of the interesting things about workers’ compensation market cycles is that they are generally driven by changes in competition more than changes in exposures. If you look at claims costs over the last 20 years, they have steadily increased, yet premiums during this same period have gone up and down.

During the January 1 renewal cycle, rates trended flat or slightly down compared to expiring premiums. There are some problem states that saw higher rates, including California, New York, Illinois and Florida. The declining rates compared to increasing claims costs have caused A.M. Best, Fitch and others to issue a negative outlook on workers’ compensation. It is expected that this hyper-competitive market cycle is going to end soon as the new entrants into the marketplace start to see the long-tail losses from their business hitting the books.

See also: 25 Axioms Of Medical Care In The Workers Compensation System  

6. Long-Tail Exposures

One of the things that make workers’ compensation such a challenge for employers and carriers is the long-tail nature of the claims. “Long tail” means that premiums collected today must cover losses for years to come. The claims tail is an issue to watch because of the impact it has on both carriers and employers in terms of cost of insurance today and future reserves.

The biggest driver of increasing claims-tail costs are advances in medical science. Better medicine means life expectancies are getting longer. This increases the exposures for lifetime indemnity and medical benefits. In addition, new drugs and treatments almost always cost more than what they are replacing, especially when you consider the cost difference between brand name drugs and generic medication. Prosthetics are so much more advanced today than they were 10 years ago, but they also cost significantly more.

7. State Legislative Agendas

We expect to see new workers’ compensation legislation established in at least four states during 2017:

Florida
Last year, the Florida Supreme Court tossed out multiple elements of their workers’ compensation statutes as unconstitutional, which caused a significant increase in claims costs and premium rates. There will be bills introduced to address these issues.

Illinois
Last year, and again this year, Illinois Governor Rauner has made workers’ compensation reform a key element in his job-growth agenda. He is calling for medical fee schedule reductions, higher causation standards for conditions to be found compensable, and legislation to reverse court decisions that have expanded benefits.

New York
New York is another state where reform efforts stalled last year. Employers are pushing for limits on the time for an employee to reach maximum medical improvement, which triggers the 10-year cap on indemnity benefits.

California
Every year the legislature passes bills to reverse recent reforms, and with few exceptions the Governor has vetoed those bills. There will inevitably be more reform bills introduced in 2017, so we will see what those bills address and whether the Governor will approve any of them.

Options to Workers’ Compensation
In 2016, we saw efforts to push for options to workers’ compensation stall. Legislation in Tennessee and South Carolina did not move forward, and the Oklahoma Option was found unconstitutional by the State Supreme Court.

There is talk of a Texas-style opt-out bill being introduced in Florida in 2017. This bill would make workers’ compensation optional. There are also rumors about an option bill being reintroduced in Tennessee. It remains to be seen if there is enough momentum in either state to move this legislation forward.

8. Treatment Guidelines

Workers’ compensation stakeholders have become very familiar with medical treatment and return-to-work guidelines, along with evidence-based medicine. Payers and managed-care suppliers work diligently to embed guidelines in their systems for nurses and claims adjusters to improve efficiency with access to the guides and workflow for their colleagues. States have implemented a variety of guideline solutions, which include creating unique formularies and treatment guides, and also adopting industry-available workers’ compensation guidelines. The lack of guideline consensus across stakeholders including physicians, regulators, payers, and suppliers is an ongoing challenge to the system.

9. Constitutional Challenges

In 2016, elements of the workers’ compensation statutes in five states were found to be unconstitutional by such states’ respective Supreme Court. Among the issues found unconstitutional in 2016 were:

  • Caps on temporary total disability benefits
  • Exclusion of coverage for certain farm workers
  • Caps on attorney fees
  • Time limits for filing cumulative trauma clams
  • Use of current edition of AMA guidelines for impairment ratings

When an aspect of the law is found unconstitutional, that change goes back to when the law was enacted. In Florida, the rulings changed the laws governing years of existing claims, significantly increasing the exposure on such claims retroactively. This created unanticipated liabilities for carriers and self-insured employers.

The success of attorneys in challenging these statutes provides a road map for attorneys in other states to pursue similar challenges.

10. Mental Health

The notion that workers are not impacted by mental illness when a work injury occurs or that mental health is always separate from workers’ compensation is an increasing challenge for the industry. Mental health is among the top 3-5 reasons for short term disability absences across white and blue collar workers, mental health crosses industry verticals. More than ever employers understand that lack of mental health care impacts productivity, regardless of how an injury or illness occurred. Ways in which employers are addressing mental health and workers’ compensation include promoting EAP and behavioral health programs for employees regardless of how an injury or illness develops.

One challenging aspect of this issue is the fact that many states significantly limit or completely prohibit workers’ compensation benefits for mental injuries without any physical cause. There will be more discussions in the future about the need to revisit laws around the country dealing with mental injuries.

11. Impaired Workforce

After the November elections, eight states and DC allow for recreational use of marijuana. This means around one in five people live in a state where recreational marijuana is now legal.

For employers, this means the reality that a percentage of your workforce is likely impaired. Years ago many employers stopped doing pre-employment drug testing because they could not get enough applicants to pass to fill their jobs. New OSHA regulations from 2016 seek to significantly limit the use of post-injury drug testing, which further inhibits employers looking to maintain a drug-free workplace policy.

The answers to this issue is very challenging. Drug testing for marijuana always focused on whether the drug was present in the system because it was illegal. It can be detected in the system 30 days after use, but showing presence of the drug does not show impairment. This is an area where the science needs to catch up with social reality. We need an established standard for what constitutes impairment when it comes to marijuana.

See also: How Should Workers’ Compensation Evolve?  

12. Alternatives to Opioids for Chronic Pain

For a number of years, there has been significant focus on reducing prescription opioid use in workers’ compensation. With President Obama supporting awareness of the opioid epidemic in 2016, the management of opioids and opioid-related deaths became a household topic across America. In 2017, we believe there will be greater emphasis on the options outside of opioids for both acute and chronic pain. Admitting patients into functional restoration programs and multi-disciplinary integrated pain management programs have proven successful ways to eliminate opioid use. Meditation, exercise, mindfulness, yoga, and cognitive behavioral therapy have also shown success.

In the quest to offer non-opioid treatment options in workers’ compensation, one of the challenges is coverage. Insurers have been quick to pay for opioids and hesitant to pay for alternative treatments. One-size-fits-all approaches to care will not work for these patients. Treatment is outside of guidelines and requires coordination and care, rather than simply approving or denying treatment. 2017 should be our year to improve functionality for patients currently on opioids and alternative treatments must be considered.

13. Occupational Disease

We know that exposure to certain substances in the workplace can lead to diseases such as cancer. It can take years after the exposure for these diseases to manifest themselves. Yet most statutes only cover certain defined diseases and, in many states, the statute of limitations for reporting a claim is less than the manifestation period for the disease. This creates a hole in the coverage for these diseases.

This is an issue we are going to see in more courts around the nation, as these diseases continue to manifest themselves over time. Medical science is becoming more precise in identifying the sources of these diseases, and, as this happens, workers’ compensation statutes will need to be amended to provide better coverage for those workers who contract such diseases.

The opposite end of the spectrum when it comes to occupational disease coverage are the presumption laws that impact police, firefighters and other first responders. There are currently 34 states with various presumption laws covering a variety of cancers, diseases of the heart and lungs, and certain blood-borne diseases. Opponents of these bills argue that the science does not support an increased risk for disease due to the occupation alone and that these claims should be subject to the same causation standards as other occupational disease claims.

14. Transparency with Workers

How many times have you heard an injured worker say they didn’t understand the information that was provided to them? Often times injured workers retain attorneys simply because they are confused and do not feel like anyone is there to help them. Many of us in the industry believe the pendulum has swung too far towards the process of workers’ compensation instead of taking care of the injured worker.

There was great industry momentum in 2016 with advocacy-based claims models. In 2017, look for ways in which the advocacy discussion evolves into transparency discussions. Transparency is helping the injured worker be a good consumer within the workers’ compensation arena, helping them understand the process, and providing them the best available information to make proper decisions.

15. Insurance Talent Gap

We know that a significant percentage of the workforce in the insurance industry is expected to retire in the next 10 years. The pipeline of workers to replace these retiring employees is insufficient. To address this, we need a multi-faceted approach that includes working with colleges in developing risk management education and a focus on talent attraction and recruitment. Training programs need to continue to be refined so that the knowledge of retiring employees can be passed on. Finally, employee retention is also a concern. Employers need to be more flexible with working arrangements to compete with other occupations that allow for flexible hours and work-from-home options.

16. Workers’ Compensation’s Public Image

There is growing effort underway to promote the good in our industry. Everyday our companies and our colleagues are making the right decisions and helping people in their time of need. Yet, we also have such a long way to go in the area of public relations. We need to talk more about the good we do in helping injured workers regain their quality of life. This will not only help with the stakeholders in the system, but will go a long way with recruiting the next generation into our field. Workers’ compensation is about taking care of people and it is very meaningful work. Let’s all focus on improving workers’ compensation’s reputation this year.

17. The Evolution of Workers’ Compensation

In the last year, several industry groups have had discussions on how workers’ compensation should evolve to better meet the needs of today’s workforce. The threat of federal intervention was the driving force behind much of these discussions. With that threat on hold for now, it is important that the industry take this opportunity to continue these discussions while we can control the agenda. If change is needed, then we want to be the ones working with legislators and regulators to draft those changes.

18. Machine Learning and Artificial Intelligence

Predictive analytics have been around for over 10 years. Claims professionals began using predictive analytics to identify the claims that had a propensity for adverse development. Other models evolved to address litigation, sports medicine care opportunities and return-to-work goals. It is safe to say that nearly all payers have predictive models today and probably just as likely that there is little published data on the outcomes associated with these models.

In 2017, we believe the conversation will shift to machine learning. What payers have evolved or are building new claims systems to address artificial intelligence and machine learning? Should all claims be handled by a claims adjuster? Do interventions on every claims impact the ultimate exposure or are we at a point in the industry where processing a claim should be as easy as a warranty or auto claim? There is tremendous untapped potential in this area.

See also: Healthcare Reform’s Effects on Workers’ Compensation  

19. External Disruptors

Looking to the future, there are many areas where external disruptors could have a significant impact on workers’ compensation. Mark Walls feels this is the biggest issue for the industry to watch in 2017.

Many large employers have been looking at the merits of a 24-hour healthcare model. With medical making up close to 60% of workers’ compensation costs, what happens if that element is removed from the system?

Changing retail buying habits are also having an impact on workers’ compensation. Retailers are closing stores and going out of business. With more Americans doing their shopping online, what is the future for the retail industry?

Finally, automation is a reality that has potential to be a significant disruptor. The manufacturing and distribution industry has seen significant job loss due to automation. Think of all the jobs in the trucking, shipping and transportation industry that could be lost to self-driving vehicles. Automation could be the ultimate disruptor for the workers’ compensation industry.

20. Innovation in Action

While the insurance industry is traditionally not known for innovation, we are certainly hearing more about innovative solutions. Digital health, insurtech, med tech, machine learning, and automation are all terms we are becoming familiar with and each brings its own value to workers’ compensation. As the innovations come to fruition in the marketplace, we will be focused on understanding the value of the innovation. Is the innovation going to improve the experience of the user or is it designed for internal processes and workflow? Will the solution drive efficiency and speed to decision or process improvements? How will quality, compliance and outcomes be impacted and measured?

To listen to the complete webinar, click on this link.

How the C-Suite Sees the Future

At the 2016 PCI Annual Meeting, a panel of retiring insurance executives discussed lessons learned over their careers. The panel comprised:

  • Marguerite Tortorello – moderator
  • Terrance Cavanaugh – president and CEO – Erie Insurance Group
  • Kenneth Ciak – vice chairman – Ameriprise Auto & Home Insurance
  • Tad Montross – retired CEO – Gen Re
  • J. Douglas Robinson – chairman – Utica National Insurance Group

What keeps you up at night, then and now?

  • The Weather Channel!
  • Making sure that we are achieving responsible growth for our shareholders.
  • The emerging risk trend that had not yet been identified.
  • Worrying is one step. As CEO, you need to do something about the things that cause you worry.
  • The dramatic change our economy is undergoing and the impact it will have on our industry.
  • As CEO, everything keeps you awake.

See also: Blending the New With the Old

Where do you think the culture of the insurance industry should be moving?

  • Our industry used to be very sleepy and stagnant. Over time, we are seeing more specialization, which allows for better expertise. We need to continue to attract better and smarter new talent into our industry. Our industry needs to do a better job explaining the role insurance has in the economy and all the good things we do.
  • The question is – how much of the change we are seeing right now is cyclical versus permanent? How companies respond to this is important to their future direction. Companies are more intelligent now because of underwriting and claims models. We need to be cautious about becoming overly dependent on these models.
  • Is your business culture an accelerator or an inhibitor to future business. Going forward, we need to focus more on service instead of just the protection that we offer. Our clients expect us to be more proactive.
  • There is more emphasis on “work-life” balance, but this may have gone too far. New employees want to work less but be rewarded more. Our clients expect 24-7 service, which conflicts with our employees’ desire for less time at work.

What types of traits do executives need to look for in their management team to lead into the future?

  • You want people who are curious and will challenge the status quo. We cannot be overly dependent on what we have done in the past to make decisions about the future.
  • Leadership needs to have a clear vision about their long-term goals and not get distracted by short-term issues.
  • Leaders need to show their employees they care about them and that we relate to them. Our customers want the same thing.

How do you see the industry better marketing itself to millennials to attract new talent?

  • We need to emphasize the vast variety of tasks we perform and jobs available in our industry.
  • Stressing the “service” aspect of our industry versus just paying claims. We help people at a time of need.
  • We are an industry that is under attack at the state and federal levels. We need to do a much better job talking about the good things we do for society and the key role our industry plays in preserving the economy.
  • Everyone uses insurance products, but few actually understand the insurance products. The industry needs to do a better job explaining what we do and why it is so important. We need people to view insurance as an investment in protection instead of just an expense.

How will technology affect our industry in the future?

  • Consumers want instantaneous service, and we need to be able to deliver it.
  • We still deliver paper policies, so we have a long way to go in the technology area.
  • It is important to balance technology changes with regulatory requirements.
  • Technology is affecting almost every risk we underwrite. Industry leadership needs to pay attention to these changes so they make sure they are evaluating the risk correctly.
  • We probably have made more mistakes with technology innovation than other industries due to the significant amount of historical data we are dependent on. On the flip side, we may become better at evaluating risk than public policy wants us to be as certain segments may become uninsurable with better data and analysis.

What are your concerns around the regulatory environment?

  • This is a huge issue. Not only are regulators wanting to regulate how we do the business of insurance, but they are also wanting to regulate what we invest in, who we promote, how we compensate people and the makeup of our boards. At some point, we have to run a business.
  • The constant change of regulations creates so many challenges. For example, after Hurricane Sandy states, put out new regulations to govern how companies handled claims on in-force policies.

See also: Are You Ready for the New Paradigm?  

What regulatory impact do you think the pending elections will have?

  • Historically, the party in the White House has not had a significant impact on the financial markets.
  • We are already seeing so much regulation on our industry, it is hard to get much worse.
  • There is concern that politicians will not like the answers that our data gives us with regard to rates and coverage limitations.
  • The sharing economy is going to have a big impact on our industry. The state elections and how they are viewing this could have a significant impact.
  • The concern is that one party may control the presidency, House and Senate, which would not be best for consumers or our industry as it would allow that party to unilaterally advance their agenda.

How do you see the distribution model changing?

  • We have seen significant consolidation on the brokerage side, and this will continue.
  • We are likely to see more direct-to-consumer products, which is what consumers are requesting.
  • There needs to be a way to allow consumers to have flexibility and still involve the agent or broker in the transaction.

What is one thing you wish you knew then that you know now?

  • I wish we had made bigger investments in technology earlier rather than constantly trying to modify legacy systems.
  • Be mindful of your body language and demeanor as people pay close attention to this when listening to your message.
  • It is so important to have the right people in the right place. Intellectual capital still drives everything.
  • Don’t be afraid to make decisions. Too many let indecision inhibit them.
  • My greatest fear was that I would hire the wrong people for the job. We eventually developed better tools to assist in that, and I wish they had been available earlier.

Politics of Guns and Workplace Safety

The politics of guns in America are volatile, divisive and passionate, yet the risks that firearms present to organizations every day do not depend on the politics of the moment. Employers must deal with the reality of gun violence in America. A RIMS 2016 session discussed the legal aspects of what organizations can do and the practical implications of creating a firearms risk management program.

Speakers were:

  • Michael Lowry, attorney, Thorndal Armstrong Delk Balkenbush & Eisinger
  • Danielle Goodgion, director of human resources, Texas de Brazil

What Risks Do Firearms Pose?

OSHA states that an employer must provide “employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.”

See Also: Active Shooter Scenarios

There are several risks to your organization, including:

  • Operations can halt in the case of a shooting. You have issues like police investigations and possibly injured employees.
  • Workers’ compensation will kick in if employees become injured.
  • General liability will be activated to cover injuries of non-employees.
  • Reputational risks are possibly the largest risks. You do not want your business associated with a violent act.

Most think that the Second Amendment bars private businesses from banning guns, but this is incorrect. The amendment applies to governments, not private homes and businesses.

Some employers react by posting signs banning all guns. This simple sign can be a recipe for disaster for several reasons:

  • Have you created a duty? If you post a sign, you have officially created a duty.
  • Why did you create this policy?
  • What are you doing to enforce this policy? Did you have a manual? Did you put up X-ray detectors? Probably not. You have to be able to prove you are enforcing the policy if you post a sign.
  • Did you train your employees to enforce this policy? If this policy is not enforced, a person might be injured by a firearm on your property.

“Bring Your Gun to Work” Laws

This is not a good idea. According to the law, business may not bar a person who is legally entitled to possess a firearm from possessing a firearm, part of a firearm, ammunition or ammunition component in a vehicle on the property.

In Kentucky, an employee may retrieve the firearm in the case of self-defense, defense of another, defense of property or as authorized by the owner, lessee or occupant of the property. In Florida, the employer has been held liable for civil damages if it takes action against an employee exercising this right.

Reputational risks also can apply. You could either get special interest groups protesting against your business or people who refuse to do business with you.

The Middle Ground

It is best to create a policy. Even if you support the right to bear arms, you can do it subtly. There are several provisions on what type of carry you allow and what signs are required. Business owners also do have the ability to allow no guns on the premises.

See Also: Broader Approach to Workplace Violence

Your policy should describe exactly how to approach a customer if an employee sees a weapon, including who should approach the customer, what to say and the steps to take to address the issue. Training is important.

Why Train?

  • Researchers from the Harvard School of Public Health and Northeastern University found the rate of mass shootings has tripled since 2011.
  • In 2014, an FBI study considered 160 events between 2000 and 2013. 70% occurred in business or educational setting.
  • In 2000-2006, the annual average rate was 6.4 shootings. That jumped to 16.4 in 2007-2014.

This is clearly a problem that is getting worse, so why is training rarely provided? Places of business are a target – especially retail, restaurants and businesses in the hospitality industry. The active shooter wants soft, easy targets in large, open, public and crowded areas, and the goal is to kill indiscriminately. If your business is doing well with large crowds, you are a soft target.

Active Shooter Resources

To learn how to manage this risk, you can find resources from:

  • Law enforcement
  • Insurance partners
  • Government
  • Outside experts
  • Legal
  • Human Resources

Online resources include: