Disney’s Tim East Tapped for NWCDC Keynote
When your brand is synonymous with happiness, there’s a lot riding on making everything look effortless — no easy feat when you’re managing risk. Tim East knows that better than most — he’s been doing it for decades.
Burbank, Calif.-based East, one of the risk management directors for The Walt Disney Company, is positioning his company to keep pace with a world that’s moving faster than a ride on Space Mountain.
That is why the advisory board of the 25th annual National Workers’ Compensation and Disability Conference® & Expo selected East to deliver the opening keynote presentation at this year’s event, scheduled for Nov. 30-Dec. 2 at the Ernest N. Morial Convention Center in New Orleans.
From the Ground Up
East currently oversees risk financing, construction insurance programs, risk management government affairs, and risk management for the company’s international theme parks.
But he got his start in 1974, in the administrative services area.
“I was in the janitorial department at Disneyland. That’s where I started,” he said. By 1982, he was Supervisor of Safety, involved with “training and preparing the policies and procedures and training the executives of the park’s operations.” He was also involved with training and supporting the opening of Tokyo Disneyland.
From there, East served in a variety of risk management positions at The Disneyland Resort in Anaheim. From his role in safety, he went on to head the workers’ compensation claims department and implemented the first Limited Work Program at Disneyland. He assumed his current role in January 1996.
Outside his company role, East is the chair of the California Self-Insurers Security Fund, a past chair of the California Coalition on Workers’ Compensation, and a trustee of the California Self Insurers Trust Fund. He regularly meets with lawmakers, policy advisors, trade organizations, and the California governor’s office on insurance and workers’ comp issues.
East’s resume boasts an impressive list of degrees and certifications. He was named the Insurance Institute of America’s Distinguished Graduate in 1995. That same year, he also received the Christy Award from the Risk and Insurance Management Society for having the highest composite score of 1,400 associate risk management candidates.
Change With the Times
If, like East, you were in the industry in the ’80s, you may recall it was common to see mail clerks walking through claims offices pushing carts loaded with files for claims examiners. When a claim went before an appeals board, it was typical to see attorneys and others on both sides carrying 10-inch files.
The move to a paperless system was a sea change in that era. East believes the time has come for another profound shift in the way the workers’ comp system conducts business.
In his keynote address, East will explore strategies for leveraging rapidly changing technology to engage injured workers and facilitate recovery.
“We have to make another transformation in our use of technology, and we’ve got to link technology and social media change so we bring the two together in a way that makes us more effective in our roles,” East said.
Communicating with injured workers is a key piece of managing claims, and East says that’s one area where the power of technology can effectively be harnessed.
“Twenty or 30 years ago we would send a ‘hello’ letter [to the injured worker]; a two- to three-page letter with everything they needed to know. It was very personal,” he said. “Nobody reads a two-page letter. That is so counterproductive today. It’s like horse and buggies at an Indy 500.”
Instead, East said, many people, especially younger workers, use electronic forms of communication. The industry needs to take notice.
“The injured worker of today, the next generation, wants shorter communication from employers. Brief bits of information that help them, and that they find useful and relevant,” East said. “Young people want to know, ‘How is this going to help me?’ We’ve got to find a way to communicate.”
The same applies to physicians’ offices and supervisors. Snail mail, he says, “is not necessarily the way they want to be communicated with. We have to change that.”
As businesses are increasingly driven by attaining better outcomes, East says many are starting to come around to the idea of providing shorter, more frequent, succinct information to their employees and others involved in the workers’ comp system.
“Young people want to know, ‘How is this going to help me?’ We’ve got to find a way to communicate.” — Tim East, director of risk management, The Walt Disney Company
“It is finding new platforms, new ways of communicating,” he says, “be it text, Twitter, and social networks to actually parse information down to small little packets to injured workers who don’t want a letter, form, or phone call. Letters, forms, and phone calls were the biggest tools in the toolbox once. They are bygones.”
The same changes need to occur throughout the industry’s efforts to attract and retain talent, East said. Outdated modes of communication are hampering recruitment efforts.
“Young people are looking for relevancy in their roles,” he said. “I don’t think there is anything more relevant than helping people maintain their jobs and health. We have the relevancy, but we are not communicating it. I don’t think we help people feel the relevancy and see how important their roles are.”
East also says it’s time for a move away from what he calls the focus on big massive claims administrative systems.
“It’s a necessary infrastructure, but it needs to change in two directions — toward the injured worker and the employer,” he says. “The first is leveraging these massive claims administration systems and data systems to provide better analytics, better information that [employers] can make decisions more accurately, more timely, and formatted so employers can grasp the message.”
That involves extracting information from the huge amounts of robust data. Additionally, there’s a need to link the systems to better focus on the injured worker and manage the process more effectively.
To hear more of East’s thoughts on the future of employee engagement, join your fellow industry professionals at NWCDC this fall.
Teddy Awards 2016: Share Your Success
Last November in Las Vegas, the 2015 Teddy Award winners faced a packed session at National Workers’ Compensation and Disability Conference® & Expo, with attendees eager to learn more about their successful programs.The session was enthusiastically received.
Afterward, attendees were overheard saying to colleagues, “We should start doing that … let’s discuss it when we get back to the office … .” Clearly, conference organizers were spot-on when naming that session “Steal These Ideas!”
Does your company have ideas worth stealing too? Are you proud of what you have been accomplishing with your workers’ compensation and injury prevention programs? We’d like to learn more about them.
The application is now available online for the 2016 Theodore Roosevelt Workers’ Compensation and Disability Management Awards, aka The Teddys.
The awards are open to both for-profit and nonprofit employers, as well as governmental entities. And while there are quite a few large employers among our list of past winners, small and mid-size entities are encouraged to apply.
Our judges look for quality rather than quantity, and plenty of past winners have proven that it’s possible to accomplish great things even with limited resources.
Some food for thought as you prepare your application. We are looking for well-rounded programs that take a holistic approach to safety, workers’ comp and disability management. Teddy Award winning companies, no matter their size or industry, have several core characteristics in common.
They do everything possible to protect their most valuable asset: their people. They strive daily to reduce workplace risks and prevent injuries from happening.
When injuries do happen, winning companies waste no time securing expert care for their workers. They also have systems and practices to ensure that they’re getting the best possible outcomes for their medical spend.
Our judges look for quality rather than quantity, and plenty of past winners have proven that it’s possible to accomplish great things even with limited resources.
Teddy winners frequently amaze us with their 110 percent commitment to getting all injured employees back to work, using imaginative strategies that turn the old model of return-to-work on its head.
They also track and measure everything — continuously and aggressively looking for opportunities to improve outcomes while eliminating wasted expense.
Along the way, many of them also develop effective strategies that help manage challenges such as union negotiations, legacy claims, litigation and fraud.
Not least of all, Teddy winners get results. We look at the last five years’ worth of performance data to gauge whether the company’s programs really help achieve the intended goals.
Judges factor in every element potentially affecting that performance, including the intensity of the challenges faced, as well as the age of the program.
Teddy winners go above and beyond best practices, and they have a firm grasp of the big picture. They leverage the talent of internal teams as well as vendor partners to build programs that enable them to drive year-over-year improvement for the long-term.
For inspiration, read about last year’s Teddy Award winners. It could be your organization whose praises we’re singing this year.
The 2016 Teddy Award winners will be profiled in the November 2016 issue of Risk & Insurance®, and will be recognized at the National Workers’ Compensation and Disability Conference® & Expo in New Orleans, held Nov. 30 – Dec. 2, 2016.
For questions about the awards or the application process, please contact Michelle Kerr at [email protected] or 215-784-0910, ext. 6216.
Commercial Auto Warning: Emerging Frequency and Severity Trends Threaten Policyholders
The slow but steady climb out of the Great Recession means businesses can finally transition out of survival mode and set their sights on growth and expansion.
The construction, retail and energy sectors in particular are enjoying an influx of business — but getting back on their feet doesn’t come free of challenges.
Increasingly, expensive commercial auto losses hamper the upward trend. From 2012 to 2015, auto loss costs increased a cumulative 20 percent, according to the Insurance Services Office.
“Since the recession ended, commercial auto losses have challenged businesses trying to grow,” said David Blessing, SVP and Chief Underwriting Officer for National Insurance Casualty at Liberty Mutual Insurance. “As the economy improves and businesses expand, it means there are more vehicles on the road covering more miles. That is pushing up the frequency of auto accidents.”
For companies with transportation exposure, costly auto losses can hinder continued growth. Buyers who partner closely with their insurance brokers and carriers to understand these risks – and the consultative support and tools available to manage them – are better positioned to protect their employees, fleets, and businesses.
Liberty Mutual’s David Blessing discusses key challenges in the commercial auto market.
“Since the recession ended, commercial auto losses have challenged businesses trying to grow. As the economy improves and businesses expand, it means there are more vehicles on the road covering more miles. That is pushing up the frequency of auto accidents.”
–David Blessing, SVP and Chief Underwriting Officer for National Insurance Casualty, Liberty Mutual Insurance
More Accidents, More Dollars
Rising claims costs typically stem from either increased frequency or severity — but in the case of commercial auto, it’s both. This presents risk managers with the unique challenge of blunting a double-edged sword.
Cumulative miles driven in February, 2016, were up 5.6 percent compared to February, 2015, Blessing said. Unfortunately, inexperienced drivers are at the helm for a good portion of those miles.
A severe shortage of experienced commercial drivers — nearing 50,000 by the end of 2015, according to the American Trucking Association — means a limited pool to choose from. Drivers completing unfamiliar routes or lacking practice behind the wheel translate into more accidents, but companies facing intense competition for experienced drivers with good driving records may be tempted to let risk management best practices slip, like proper driver screening and training.
Distracted driving, whether it’s as a result of using a phone, eating, or reading directions, is another factor contributing to the number of accidents on the road. Recent findings from the National Safety Council indicate that as much as 27% of crashes involved drivers talking or texting on cell phones.
The factors driving increased frequency in the commercial auto market.
In addition to increased frequency, a variety of other factors are driving up claim severity, resulting in higher payments for both bodily injury and property damage.
Treating those injured in a commercial auto accident is more expensive than ever as medical costs rise at a faster rate than the overall Consumer Price Index.
“Medical inflation continues to go up by about three percent, whereas the core CPI is closer to two percent,” Blessing said.
Changing physical medicine fee schedules in some states also drive up commercial auto claim costs. California, for example, increased the cost of physical medicine by 38 percent over the past two years and will increase it by a total of 64 percent by the end of 2017.
And then there is the cost of repairing and replacing damaged vehicles.
“There are a lot of new vehicles on the road, and those cost more to repair and replace,” Blessing said. “In the last few years, heavy truck sales have increased at double digit rates — 15 percent in 2014, followed by an additional 11 percent in 2015.”
The impact is seen in the industry-wide combined ratio for commercial auto coverage, which per Conning, increased from 103 in 2014 to 105 for 2015, and is forecast to grow to nearly 110 by 2018.
None of these trends show signs of slowing or reversing, especially as the advent of driverless technology introduces its own risks and makes new vehicles all the more valuable. Now is the time to reign in auto exposure, before the cost of claims balloons even further.
The factors driving up commercial auto claims severity.
Data Opens Window to Driver Behavior
To better manage the total cost of commercial auto insurance, Blessing believes risk management should focus on the driver, not just the vehicle. In this journey, fleet telematics data plays a key role, unlocking insight on the driver behavior that contributes to accidents.
“Roughly half of large fleets have telematics built into their trucks,” Blessing said. “Traditionally, they are used to improve business performance by managing maintenance and routing to better control fuel costs. But we see opportunity there to improve driver performance, and so do risk managers.”
Liberty Mutual’s Managing Vital Driver Performance tool helps clients parse through data provided by telematics vendors and apply it toward cultivating safer driving habits.
“Risk managers can get overwhelmed with all of the data coming out of telematics. They may not know how to set the right parameters, or they get too many alerts from the provider,” Blessing said.
“We can help take that data and turn it into a concrete plan of action the customer can use to build a better risk management program by monitoring driver behavior, identifying the root causes of poor driving performance and developing training and other approaches to improve performance.”
Actions risk managers can take to better manage commercial auto frequency and severity trends.
Rather than focusing on the vehicle, the Managing Vital Driver Performance tool focuses on the driver, looking for indicators of aggressive driving that may lead to accidents, such as speeding, sharp turns and hard or sudden braking.
The tool helps a risk manager see if drivers consistently exhibit any of these behaviors, and take actions to improve driving performance before an accident happens. Liberty’s risk control consultants can also interview drivers to drill deeper into the data and find out what causes those behaviors in the first place.
Sometimes patterns of unsafe driving reveal issues at the management level.
“Our behavior-based program is also for supervisors and managers, not just drivers,” Blessing said. “This is where we help them set the tone and expectations with their drivers.”
For example, if data analysis and interviews reveal that fatigue factors into poor driving performance, management can identify ways to address that fatigue, including changing assigned work levels and requirements. Are drivers expected to make too many deliveries in a single shift, or are they required to interact with dispatch while driving?
“Management support of safety is so important, and work levels and expectations should be realistic,” Blessing said.
A Consultative Approach
In addition to its Managing Vital Driver Performance tool, Liberty’s team of risk control consultants helps commercial auto policyholders establish screening criteria for new drivers, creating a “driver scorecard” to reflect a potential new hire’s driving record, any Motor Vehicle Reports, years of experience, and familiarity with the type of vehicle that a company uses.
“Our whole approach is consultative,” Blessing said. “We probe and listen and try to understand a client’s strengths and challenges, and then make recommendations to help them establish the best practices they need.”
“With our approach and tools, we do something no one else in the industry does, which is perform the root cause analysis to help prevent accidents, better protecting a commercial auto policyholder’s employees and bottom line.”
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.