Total Worker Health

Healthier Workforce, Healthier Bottom Line

Programs that focus on total worker health are becoming an integral part of the way companies manage employee safety and workers' comp costs.
By: | July 11, 2016 • 6 min read
Classic blue truck with the sign oversized load on the truck stop on the background of a gas station with truck and buses. Front view opens up a powerful vehicle with a grille, the turned wheel, the side signal flags and rear-view mirrors, attached to the hood.

Wellness programs started catching on around a decade ago as a way for human resources to reduce medical costs and absenteeism. Typical programs included weight loss competitions, daily step goals or smoking cessation assistance.

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Eventually, it began to catch on that healthier workers are also less prone to injury.

That led to what you might call “Wellness 2.0” … a combined wellness and safety program experts call “Total Worker Health.”

Deteriorating Health

When trucking company Tradewinds Transportation LLC updated its equipment and safety gear, it also added a wellness program.

Its workers’ compensation program saw clear benefits. Tradewinds’ experience mod fell to .71 from 1.01 in the decade since the wellness and safety program was first introduced.

Heather Hayes, operations manager, Tradewinds Transportation

Heather Hayes, operations manager, Tradewinds Transportation

The company’s annual workers’ comp premium fell to $98,000 from $122,000 — even as payroll, truck fleet and headcount tripled.

But the greatest gains started to show up two years ago when Tradewinds beefed up its safety program with an addition of a wellness program as an employee retention tool, said Heather Hayes, operations manager at Tradewinds.

Hayes was researching the causes behind the industry’s driver shortage when she found shocking statistics: Truck drivers live about 16 years less than the average employee; about 85 percent have hypertension and 80 percent are obese.

“Their deteriorating health was scary, statistically,” Hayes said. “And we were only contributing to the cause of the problem.”

Tradewinds looked everywhere for opportunities to improve. It built a walking trail around their Oregon office. It switched kitchen offerings to more healthy, grab-and-go options such as fruits, eggs, nuts and yogurt.

“Their deteriorating health was scary, statistically. And we were only contributing to the cause of the problem.” — Heather Hayes, operations manager, Tradewinds Transportation

Drivers received water bottles and rice cookers to take on the road so they could avoid the rest stop standard fare, like 72-ounce sodas and cheeseburgers. A nutritionist surveyed the most frequently visited truck stops to create a list of healthy options.

They also received resistance bands and on-the-road exercise programs. Each driver got a pedometer and information guide which told them how many loops walked around the truck equals a mile.

Employees received diet and exercise education, healthy recipes and mindfulness classes for stress management. They even allow drivers to bring kids along for short stints to help with their work/life balance.

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During the 12-week pilot program, drivers lost an average 13 pounds.

Research conducted by the National Safety Institute found that after two years on the wellness program, those drivers who initially ranked in the “high risk” group fell to “medium risk” and stayed there.

Those initially labeled “medium risk” dropped to “low risk.”

“Once they learn it, they cannot unlearn it,” Hayes said. “Employees did not return to their old habits.”

Drivers quit smoking and lost weight; one employee lost more than 80 pounds. In an industry that has an average annual turnover rate of 110 percent, Tradewinds’ is 17 percent, and its experience mod continues to fall.

The program is so successful that Tradewinds now offers it year round.

Whole-Person Approach

The U.S. National Institute for Occupational Safety and Health (NIOSH) created a Total Worker Health program in 2011 and offers its template and research for companies to start their own.

Deb Fell-Carlson, a policyholder safety and wellness adviser at SAIF, Oregon’s not-for-profit, state-chartered workers’ compensation insurance company, said she sees companies using wellness to reduce workers’ comp costs in a big way.

“There’s no reason wellness and safety can’t come together. It’s more efficient and you can make your programs more effective.” — Tom Heebner, senior vice president/risk consultant, HUB International

SAIF issues almost half of the policies in Oregon and provides coverage to more than 600,000 workers. Fell-Carlson helps clients, including Tradewinds, combine safety practices with wellness program to offer a total worker health program.

Pinnacol Assurance, based in Colorado, studied the effect its wellness offerings had on clients’ costs and found that for every $1 invested in a worksite wellness program, companies saved $2 in medical costs and productivity improvements.

Approximately 97 percent of participants in Pinnacol’s workplace wellness program reported improvement in employee safety.

Workplace wellness helps employees achieve better health in seven key areas: cancer, coronary, fitness, nutrition, safety, stress and weight management.

Addressing certain health risk factors, such as smoking, obesity and diabetes, can reduce the risk of workplace injuries in less than a year, according to Pinnacol research.

“People who enjoy work are less likely to file workers’ comp claims.” — Ron Z. Goetzel,vice president, consulting and applied research, Truven Health Analytics, and senior scientist, Johns Hopkins Bloomberg School of Public Health

For example, obese workers can cost employers $5,000 more each year than their non-obese peers. When an obese worker is injured, it takes five times longer than their peers for them to return to work.

A 2007 Duke University study found maintaining healthy weight not only is important to workers but should also be a high priority for their employers given the strong effect of BMI on workers’ injuries. It recommends companies create work-based programs targeting healthy eating and physical activity.

Ron Z. Goetzel, VP, consulting and applied research; Truven Health Analytics; and senior scientist, Johns Hopkins Bloomberg School of Public Health

Ron Z. Goetzel, VP, consulting and applied research; Truven Health Analytics; and senior scientist, Johns Hopkins Bloomberg School of Public Health

Morale is a factor too. Research shows when employees like going to work and like their co-workers, it actually makes a difference in workers’ comp costs, said Ron Z. Goetzel,vice president, consulting and applied research at Truven Health Analytics, and senior scientist at Johns Hopkins Bloomberg School of Public Health.

Simply put, said Goetzel, “People who enjoy work are less likely to file workers’ comp claims.”

Focusing on the whole person makes sense. Participating employees are more alert, healthier and engaged in their jobs.

That correlates to less obesity, alcohol consumption, smoking, depression and poor control of biometric values, which in turn correlates to fewer safety incidents and fewer claims, he said.

“This whole movement from traditional health wellness programs has enlarged into the area of organizational health,” Goetzel said.

Busting Silos

Risk managers may struggle to quantify how well the wellness program works at reducing workers’ compensation costs.

To convince upper management, risk managers must start with a diagnostic assessment, Goetzel said. Create a big picture view of how employers are paying for the health and safety of workers.

Wellness programs of the past were typically the domain of HR. But risk managers working together with HR on a wellness program have much to gain.

“The challenge is making that case and then drawing the resources from those individual silos to come together to approach it as total population health management,” said Philip Swayze, director of health and performance at HUB International.

Tom Heebner, senior vice president/risk consultant, HUB International

Tom Heebner, senior vice president/risk consultant, HUB International

For example, if the HR team changed the way it financed health benefits, it might not think to tell risk management. But knowing about it can help risk managers anticipate fluctuations in workers’ comp.

“Potentially, if they changed to a larger deductible, then it may incentivize employees to file claims elsewhere,” Swayze explained.

“It’s hard for folks to cross over and be collaborative with groups they don’t normally collaborate with,” said Tom Heebner, senior vice president/risk consultant at HUB International. Heebner provides workers’ compensation reduction guidance to his HUB clients.

“There’s a wall thrown up pretty quick when you try to get performance statistics or wellness statics from the human resource side,” he said. That’s due to fear of health privacy laws.

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Chances are these two groups provide different training on that same topic, and they don’t talk or collaborate and tie things together, he said.

“There’s no reason wellness and safety can’t come together. It’s more efficient and you can make your programs more effective.”

Once you decide on a program, how well you communicate to your employees may determine its success. Employees need to understand what is being offered, how to sign up, and how it will benefit them.

“All you want to do is get some small wins,” Heebner said.

Juliann Walsh is a staff writer at Risk & Insurance. She can be reached at [email protected]
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Risk Insider: Joe Tocco

Expanded Canal Creates Greater Opportunities … and Risks

By: | July 6, 2016 • 2 min read
Currently Chief Executive of the Americas for XL Catlin’s insurance operation, Joe Tocco has enjoyed three decades in the insurance industry at various organizations. He is also a veteran of the U.S. Navy, where he served as a nuclear field service engineer. He can be reached at [email protected]

An international consortium of companies built a new third lane and set of locks at the Panama Canal that doubles its capacity.

Like other massive infrastructure projects, the expansion effort faced an assortment of challenges. Nonetheless, on June 26, the Chinese container ship Costco Shipping Panama became the first vessel to pass through the new third lane; its name was changed to respect the honor of being the first “New Panamax”-sized ship to transit the canal.

Building Bridges

Doubling the capacity of the Panama Canal should increase trade flows between Asia and the Americas, as well as between Latin America and North America.

For example, about 10 percent of the Asia-to-U.S. container traffic could shift from the West Coast to the East Coast by 2020. A larger Panama Canal also offers an attractive alternative for shipping bulk commodities from the U.S. heartland to Asia via the Mississippi River.

For starters, bigger ships mean more accumulation risk. It’s estimated that the additional cargo moving through the canal each day will be worth about $1.25 billion. And that figure doesn’t include the vessels queuing at both ends of the canal.

And as natural gas production has surged in the U.S., producers are looking to develop new markets in Asia; an expanded Panama Canal could help facilitate that.

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For Latin America, the canal’s greater capacity could lead to increased deliveries of agricultural and other products to Asia. Similarly, we could soon see more shipments of perishable products like meat and fish, fresh produce and cut flowers from Latin America to North America.

A More Complex Risk Landscape

Doubling the canal’s capacity will also alter the risk landscape in Panama and elsewhere.

For starters, bigger ships mean more accumulation risk. It’s estimated that the additional cargo moving through the canal each day will be worth about $1.25 billion. And that figure doesn’t include the vessels queuing at both ends of the canal.

Operational risks at the canal are also potentially greater. In the original locks, electric locomotives on the lock walls pull the vessel along. In the new third lane, tugs positioned fore and aft will escort ships through the locks.

While canal pilots and tugboat captains have undergone extensive training, concerns have been expressed about the possibility of a tug losing control of the tow, resulting in damage to the lock as well as the ship. The maneuverability of the tugs selected for this task has also been questioned.

Given the Panama Canal’s prominent role in today’s supply chains, the impacts of an incident that takes the third lane offline would ripple quickly through the global economy, especially if the shutdown is protracted. Latin American companies shipping perishable products to North America, for example, could be especially affected by such an event.

Ports that have expanded, or are being expanded, to handle New Panamax (and larger) vessels also face greater accumulation and operational risks. And for ports on the East Coast of the U.S., the risks are amplified by the ongoing threat posed by hurricanes.

While it is too soon to determine how this expansion effort will reverberate throughout the Americas and across the globe, the canal should nonetheless continue to play a significant part in the ongoing march to a smaller world and a larger global economy.

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Sponsored: Lexington Insurance

Handling Heavy Equipment Risk with Expertise

Large and complex risks require a sophisticated claims approach. Partner with an insurer who has the underwriting and claims expertise to handle such large claims.
By: | August 4, 2016 • 5 min read
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What happens to a construction project when a crane gets damaged?

Everything comes to a halt. Cranes are critical tools on the job site, and such heavy equipment is not quickly or easily replaceable. If one goes out of commission, it imperils the project’s timeline and potentially its budget.

Crane values can range from less than $1 million to more than $10 million. Insuring them is challenging not just because of their value, but because of the risks associated with transporting them to the job site.

“Cranes travel on a flatbed truck, and anything can happen on the road, so the exposure is very broad. This complicates coverage for cranes and other pieces of heavy equipment,” said Rich Clarke, Assistant Vice President, Marine Heavy Equipment, Lexington Insurance, a member of AIG.

On the jobsite, operator error is the most common cause of a loss. While employee training is the best way to minimize the risk, all the training in the world can’t prevent every accident.

“Simple mistakes like forgetting to put the outrigger down or setting the load capacity incorrectly can lead to a lot of damage,” Clarke said.

Crane losses can easily top $1 million in physical damage alone, not including the costs of lost business income.

“Many insurers are not comfortable covering a single piece of equipment valued over $1 million,” Clarke said.

A large and complex risk requires a sophisticated claims approach. Lexington Insurance, backed by the resources and capabilities of AIG, has the underwriting and claims expertise to handle such large claims.

SponsoredContent_Lex_0816“Cranes travel on a flatbed truck, and anything can happen on the road, so the exposure is very broad. This complicates coverage for cranes and other pieces of heavy equipment. Simple mistakes like forgetting to put the outrigger down or setting the load capacity incorrectly can lead to a lot of damage.”
— Rich Clarke, Assistant Vice President, Marine Heavy Equipment, Lexington Insurance

Flexibility in Underwriting and Claims

Treating insureds as partners in the policy-building and claims process helps to fine-tune coverage to fit the risk and gets all parties on the same page.

Internally, a close relationship between underwriting and claims teams facilitates that partnership and results in a smoother claims process for both insurer and insured.

“Our underwriters and claims examiners work together with the broker and insured to gain a better understanding of their risk and their coverage expectations before we even issue a policy,” said Michelle Sipple, Senior Vice President, Property, Lexington Insurance. “This helps us tailor our policies or claims handling to suit their needs.”

“The shared goals and commonality between underwriting and claims help us provide the most for our clients,” Clarke said.

Establishing familiarity and trust between client, claims, and underwriting helps to ensure that policy wording is clear and reflects the expectations of all parties — and that insureds know who to contact in the event of a loss.

Lexington’s claims and underwriting experts who specialize in heavy equipment will meet with a client before they buy coverage, during a claim, or any time in between. It is important for both claims and underwriting to have face time with insured so that everyone is working toward the same goals.

When there is a loss, designated adjusters stay in contact throughout the life of a claim.

Maintaining consistent communication not only meets a high standard of customer service, but also ensures speed and efficiency when a claim arises.

“We try to educate our clients from the get-go about what we will need from them after a loss, so we can initiate the claim and get the ball rolling right away,” Clarke said. “They are much more comfortable knowing who is helping them when they are trying to recover from a loss, and when it comes to heavy equipment, there’s no time to spare.”

SponsoredContent_Lex_0816“Our underwriters and claims examiners work together with the broker and insured to gain a better understanding of their risk and their coverage expectations before we even issue a policy. This helps us tailor our policies or claims handling to suit their needs.”
— Michelle Sipple, Senior Vice President, Property, Lexington Insurance

Leveraging Industry Expertise

When a claim occurs, independent adjusters and engineers arrive on the scene as quickly as possible to conduct physical inspections of damaged cranes, bringing years of experience and many industry relationships with them.

Lexington has three claims examiners specializing in cranes and heavy equipment. To accommodate time differences among clients’ sites, Lexington’s inland marine operations work out of two central locations on the East and West Coasts – Atlanta, Georgia and Portland, Oregon.

No matter the time zone, examiners can arrive on site quickly.

“Our clients know they need us out there immediately. They know our expertise,” Clarke said. “Our examiners are known as leaders in the industry.”

When a barge crane sustained damage while dismantling an old bridge in the San Francisco Bay that had been cracked by an earthquake, for example, “I got the call at 6 a.m. and we had experts on site by 12 p.m.,” Clarke said.SponsoredContent_Lex_0816

Auxiliary Services

In addition to educating insureds about the claims process and maintaining open lines of communication, Lexington further facilitates the process through AIG’s IntelliRisk® services – a suite of online tools to help policyholders understand their losses and track their claim’s progress.

“Brokers and clients can log in and see status of their claim and find information on their losses and reserves,” Sipple said.

In some situations, Lexington can also come to the rescue for clients in the form of advance payments. If a crane gets damaged, an examiner can conduct a quick inspection and provide a rough estimate of what the total value of the claim might be.

Lexington can then issue 50 percent of that estimate to the insured immediately to help them get moving on repairs or find a replacement. This helps to mitigate business interruption losses, as it normally takes a few weeks to determine the full and final value of the claim and disburse payment.

Again, the skill of the examiners in projecting accurate loss costs makes this possible.

“This is done on a case-by-case basis,” Clarke said. “There’s no guarantee, but if the circumstances are right, we will always try to get that advance payment out to our insureds to ease their financial burden.”

For project managers stymied by an out-of-service crane, these services help to bring halted work back up to speed.

For more information about Lexington’s inland marine services, interested brokers should visit http://www.lexingtoninsurance.com/home.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Lexington Insurance. The editorial staff of Risk & Insurance had no role in its preparation.Advertisement




Lexington Insurance Company, an AIG Company, is the leading U.S.-based surplus lines insurer.
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