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Managing Growing International Motor Programs

The motor fleet segment is seeing expansion, bringing with it a new set of exposures.
By: | November 3, 2014 • 6 min read

As U.S.-based companies expand operations abroad and leverage new markets and growth opportunities in the global economic landscape, the need to move products or deliver services in multiple countries will often correspond with the need to find solutions to complex international motor fleet exposures.

Whether operating passenger vehicles, delivery trucks, long-haul trucks or heavy commercial vehicles, U.S. multinationals are indeed expanding motor fleets deployed overseas. And where there are vehicles, there will be fleet exposures as well as the need for proven, controlled international casualty motor fleet insurance solutions.

“This particular segment is a significant international growth area,” said Larry Boyk, head of International Programs, Casualty, Zurich Global Corporate in North America. “Most of our Fortune 500 clients already have or are expanding international operations, meaning that they are also expanding a host of casualty exposures, including motor fleet liability. So it’s important that they have a relationship with an insurance carrier that has the global scope and local capabilities to be able to accommodate these growing customer needs.”

Boyk explained that all international casualty motor fleet program components — including policy terms and conditions, premium allocations, risk engineering services, claims procedures and other essential components — must comply with all relevant local insurance regulations and tax laws, factors that can vary from country to country.

“International motor programs can be complicated, time consuming to manage, and deal with a myriad of tax and regulatory requirements,” Boyk said. “Our primary objective at Zurich is to take the complexity out of the implementation of international motor programs.”

In fact, Boyk added that many potential customers see international motor exposures as risks they don’t want to tackle under a master program. Instead, they may trust country managers to place these policies locally. While that may seem to be the most expedient approach, it fails to provide the customer with the centralization and control necessary to ensure consistent pricing and program management. In addition, allowing local contacts to place motor coverages themselves can leave potentially serious gaps in coverage, compliance, or both.

“International motor programs can be complicated, time consuming to manage, and deal with a myriad of tax and regulatory requirements.”
— Larry Boyk, head of International Programs, Casualty, Zurich Global Corporate in North America

“The insurance regulations and tax guidelines governing motor fleet and other lines of business will differ on a country-by-country basis,” Boyk said. “If coverages are placed with markets that are not up to speed with local requirements, there could be issues once a claim occurs. Also, buying coverage on a local basis could result in doing business with a local provider whose claims handling, risk engineering, or financial resources may not be up to par.”

According to Andrew Smith, International Programs Regional Manager, Casualty, Zurich Global Corporate in North America, Zurich has established itself as a leading player in the international motor program segment as its book of business has expanded.

“International motor can be difficult to do well and Zurich is one of the markets that is recognized for our global capabilities in meeting complex multinational needs,” Smith said. “We offer risk managers a value proposition that we believe is a major marketplace differentiator.”

Smith added that controlled motor programs provided by a single carrier are relatively recent phenomena, offering significant benefits such as ease of doing business.

“With Zurich, customers get consistency of pricing and coverage from a single carrier with demonstrated financial stability and global presence,” he said. “That is, as opposed to local managers purchasing local policies from several carriers, whereby risk managers may not know the local insurer’s ratings, stability, etc.”

Also, a controlled international motor program offers the customer consolidated loss data, policy and invoice tracking, as well as confirmation of premium payment. A controlled program also provides a single underwriting point of contact through which stewardship meetings, renewal strategy meetings and negotiations with the risk manager can take place.

Smith explained that international casualty motor fleet programs feature many “moving parts,” including various risk managers or country managers, or may have no local management at all. In addition to the possibility of multiple brokers, there could be leasing companies using different coverage methods, which means a lot of different individuals with existing broker and carrier relationships.

“It can be very tough to move those countries into the program,” he said.

Boyk noted that global brokers trying to bring multiple countries into a single controlled program can face challenges when trying to work with local brokers.

“In some of these situations, brokers handling the controlled motor programs can have difficulty getting the information they need on local policies,” he said. “This can be especially true when we are talking about very large, multinational fleets. Brokers and customers need a carrier with the infrastructure to handle a potential influx of claims. The broker and customer will also want to improve program performance, so we give them the necessary risk engineering support.”

Boyk points out that few markets have Zurich’s breadth of capabilities for casualty motor coverages. Headquartered in Switzerland with major operations located around the globe, Zurich insures millions of fleet vehicles worldwide. In addition, Zurich offers thousands of claims professionals and more than 900 risk engineers around the world, all of whom share information and risk insights with clients one on one and through symposiums, such as one recently held in Cameroon.

“We distinguish ourselves through our service and our network,” Boyk said. “When a risk manager looks at auto expenses on a global basis, he or she knows it can be costly. So when we deliver a fleet program, we can offer local and centralized service coordination as well as aggregated customer data as a value-added piece helpful in benchmarking and assessing program performance.”

In fact, Zurich’s innovative technology tools include a new web-based system empowering risk managers to access not only motor loss data, but also risk engineering data, safe driving information, local policies, local invoices, and local country tax and compliance information.

Boyk noted that complexity is a hallmark of international motor fleet coverage. In fact, motor coverage can be a constantly moving target from a compliance standpoint. Hence, Zurich closely monitors evolving local regulations with specialized attorneys to provide greater certainty to customers that their international motor programs will be compliant.

“No corporation wants to make headlines for violating regulations or tax laws,” Boyk said. “We offer an array of resources and tools — we call it Zurich’s Multinational Insurance Application — that can be effectively used on a country-by-country basis to stay on top of evolving insurance regulations and tax laws.”

Ultimately, given the sophisticated data tools, claims, and risk engineering services Zurich provides, risk managers can make significant progress in learning where motor losses are coming from, what can be done to improve loss frequency and severity, and how to produce sustainable, positive results in a particular country or geographic region.

Learn more about Zurich’s International Casualty Motor Solutions at

Larry Boyk can be reached at



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

This is intended as a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America, provided solely for informational purposes. Nothing herein should be construed as a solicitation, offer, advice, recommendation, or any other service with regard to any type of insurance product underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company. Your policy is the contract that specifically and fully describes your coverage, terms and conditions. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy. Coverages and rates are subject to individual insured meeting our underwriting qualifications and product availability in applicable states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers.

Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.
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Adjuster X

Wild Kingdom

By: | November 3, 2014 • 3 min read
This column is based on the experiences of a group of long-time claims adjusters. The situations they describe are real, but the names and key details are kept confidential. Michelle Kerr is the editor of this column and can be reached at

One of our clients had a delivery driver involved in a car crash. I happened to be in the area so I was dispatched to the scene. I spoke with an officer after the ambulance left with the driver. The officer checked his notes: “One vehicle accident. Good weather conditions. No skid marks indicating a high rate of speed. Driver says he simply lost control of the van and ran off the road.”

I inspected the van, which had crashed into a copse of trees. The windshield was broken, the front bumper was dented, the headlights were broken, and the grill was damaged.


I checked the back. The storage area of the van was open to the front seats. It was scattered with boxes that looked more bashed up than I would have expected. “What do you make of that?” I asked the officer.

He shrugged. “Got jostled in the crash?”

The boxes were all fairly light. Some of them looked punctured, but I didn’t spot any sharp objects in the back of the van. I noticed the interior paint in the van was scratched up, too. Odd.

Then I spotted a small smear of blood near the back door of the van. Something really wasn’t adding up here.

At the ER, I introduced myself to the injured driver, Kyle Warner, as a nurse checked his wound, which was on the back of his head, behind the right ear.

After a few preliminary questions, I said: “So, Kyle, what exactly caused the accident to the best of your recollection?”

Warner looked down at the floor and said, “I guess I just lost control of the van.”

“That’s a bit strange,” I replied. “It was a straight road. No lights, stop signs, or construction crews around.” Warner glanced at me sideways. “It’s even more baffling how you sustained a laceration on the back right side of your head.”

He looked uncomfortable. “Maybe a box hit me. I don’t know.”

Then I spotted a small smear of blood near the back door of the van. Something really wasn’t adding up here.

I looked intensely at him. “I think you do, Kyle. What did you have that was alive in the back of that van?”

Warner stammered, “I … I don’t know what you mean.”

“C’mon, what was it?” I pressed. “It was something large. Not a dog. It was wounded. My best guess is a white-tailed deer. The hooves would explain the punctured boxes and the scratched paint, not to mention your head wound.”

Warner was staring at me with his mouth open. “You may as well tell me,” I said. “I can easily get a blood sample from the van.”

“OK,” he said finally, letting out a sigh. “I came across a doe on the side of the road that must’ve been hit by a car. I thought it was dead, so I put it in the van so a friend of mine could butcher it for venison.


“Only it wasn’t dead — it was just stunned. Five or six miles later, it came to and went berserk in the back of the van. Before I could pull over, it hit me in the head with a hoof and knocked me half senseless. That’s when I ran the van off the road. I was able to get out and get around to the back of the van and let the deer out before the police arrived.”

I indicated that picking up a stunned deer was certainly not something in the course and scope of employment of his job as a driver, and that this non-sanctioned action led directly to his injury.

“What’s going to happen with my job?” Warner asked me.

“That’s up to your employer, Kyle,” I replied. “but I wouldn’t be counting on receiving a commendation.”

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Sponsored Content by Riskonnect

3 + 3: Theory of Risk

A risk management professional constructed a versatile system that he can really believe in.
By: | November 3, 2014 • 5 min read

Anthony Valsamakis doesn’t just practice risk management, he wrote a book about it. And he doesn’t just consult with quants, he is one.

“Risk management has been in my blood for so long that I have to stop myself, otherwise I could go into a two-hour monologue,” said Valsamakis, whose career in the discipline goes back almost 35 years, to his first job with the Standard General Insurance Company.

In 1990, the London-based chairman of the Eikos Group received a doctorate in Business Economics. In 1992, “The Theory & Principles of Risk Management” was published, with Valsamakis the principal author, and is now in its 4th edition.

Valsamakis worked first with a carrier, then as a commodities broker, before taking up an academic post. The company he started in 1999, the Eikos Group, has a risk consulting arm, with clients in most industrial sectors, including the food, mining, forestry, industrial paper and packaging and banking industries. The group also includes a transportation risk brokerage and a Bermuda-based carrier.

SponsoredContent_Riskonnect“I think the idea of having a secure data base that everyone can access and can update at any moment is by far the best innovation that I can see happening in the information game.”
– Anthony Valsamakis, Chairman, Risk Financing Strategy, Eikos Group

For as long as he can remember, Valsamakis sought ways to get better information on the risks he underwrites, brokers or consults on.

“Over many years we’ve tried hard to increase the quality and timeliness of the information that enables us to do just that,” Valsamakis said.

Finally, it looks like Valsamakis has found a risk management information systems platform that enables him to do just that.

For the past year and a half, Valsamakis has been using a system developed by Riskonnect.

SponsoredContent_RiskonnectValsamakis likes the Riskonnect approach for a number of reasons – one of the key reasons that the platform can be readily adapted for each of his clients, regardless of industry.

“What’s useful for me is that the platform basically resides within the client’s systems,” he said.

The information he needs to prioritize, depends on which client he is working with.

“By definition, depending on where I am working and what I am doing, risk management priorities are very different,” Valsamakis said.

The Riskonnect platform provides the necessary flexibility.

SponsoredContent_RiskonnectA mine, for example, could be in a location in Africa or South America with a high degree of political risk. A key risk for a furniture maker might be around trade secrets, the possibility that a disgruntled employee would leak a pricing catalogue to competitors. For a packaging manufacturer, their material supply chain is of the utmost importance, and so on.

For each client, Valsamakis can use Riskonnect platform and work with the client to compile the information that is most relevant to that client and its industry and enter that into a secure system.

“All of these are template facts that you can easily put into the Riskonnect system,” Valsamakis said.

The Riskonnect platform is housed within the client’s information technology system, and it is transparent enough, to give Valsamakis and his client access to the same sets of data.

“I think the idea of having a secure data base that everyone can access and can update at any moment is by far the best innovation that I can see happening in the information game,” he said.

Whose System Is It?

Valsamakis has been around long enough to know a few things about data and risk transfer. He’s seen a number of risk information management systems put out by brokers, for example, that he thinks are set up more for the broker’s business model than for the sharing of information.

Generally speaking, information about an insured’s risks come from the broker and the insured. The Riskonnect system works, according to Valsamakis, because it is designed to be adapted to the client, not the broker.

“I have seen efforts by brokers, for example, over the years to produce a type of risk information platform that becomes theirs,” Valsamakis said.

“It’s been a perennial problem in the industry, where depending on which broker you end up with, you’ll end up with system A, B or C,” he said.

The Underwriter Needs to Know

SponsoredContent_RiskonnectUsing Riskonnect, Valsamakis encourages clients to be as transparent as possible, in order to give the most complete information to underwriters.

“For me the question is, ‘What is the volatility around the asset and can there be an impact on the balance sheet of our clients?’” he said.

“We need to describe this exposure in various contexts so that the underwriters know what they are covering,” he said.

It’s basic human psychology. If an underwriter doesn’t feel they are getting enough information about a particular risk, they will take a negative view of that risk.

The more accurate the information Valsamakis has about a client’s exposures, the better the pricing he gets from underwriters.

“If you were an underwriter putting your capital and risk and I gave you little information, you would actually be less inclined to look at the risk in favorable terms. There will be a natural inclination to downgrade it,” he said.

Where Valsamakis sees enormous value is in the Riskonnect system ability to tag which can be revisited at a later stage.

“It’s amazing how clients forget, in the passage of time, that there are profiles that have changed for better or worse.”

A Long-Term Investment

The Eikos Group invested significantly in the Riskonnect product and are taking it to a number of clients. The transparency of the system and the advantage it gives the Eikos Group and its clients with underwriters is in itself a business advantage over the competition.

“We made a decision as a small company, relatively speaking, to invest a lot of money in Riskonnect and be very proactive about it,” Valsamakis said.

“When I talk to executives I say we invested in it because it’s going to save our clients money. Better information will lead to a lower cost of risk,” he said.

“If I’m talking to someone at a high level, that’s fairly easily understood.”



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

Riskonnect is the provider of a premier, enterprise-class technology platform for the risk management industry.
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