Risk Insider: Allen Melton

A Watchful Eye on Tianjin Losses

By: | August 27, 2015 • 2 min read
Allen Melton is a partner and the leader of Ernst & Young LLP Insurance & Federal Claims Services Practice. He has 20+ years of experience working for both policyholders and insurers in the claims process. He can be reached at [email protected]

As I write this, little is yet known about the total loss impact, both locally and globally, of the recent explosions in the port of Tianjin, China. Current estimates as reported in news media are that losses could exceed $1.5 billion.

Around the globe, risk managers are keeping a watchful eye on the escalating impact of this event. Potential losses continue to unfold within companies, and insurers are already being put on notice accordingly.

Given the nature of this event, it is likely that analyses of coverage and the various loss impacts will be vastly complex.

Some of the key areas to monitor include:

Supply chain / contingent business interruption impact

Damages to products and materials flowing through and stored at the port of Tianjin will likely impact companies throughout multiple tiers of the supply chain.

Similar to supply chain impacts following the earthquake/tsunami in Japan and flooding in Thailand, it could take some time for the full impact of losses from Tianjin to be realized by many companies.

This creates a critical need for risk professionals to communicate early and often with their organizations’ supply chain management and sales departments to identify potential business interruption, contingent business interruption and extra expense losses.

Marine cargo, stock throughput, and other property coverage

The myriad of different coverages maintained by most companies can create a complex mix, requiring careful analysis to determine how each applies to the situation in Tianjin.

Because the event encompassed direct destruction of product and materials, contamination due to toxic chemicals and quarantine of vessels at the port, unraveling the related coverage issues may be a daunting and lengthy task, particularly given the limited flow of information concerning the explosion and its impact.

It is essential that risk professionals work closely with their advisors to understand application of their coverage.

Civil authority and ingress-egress claims

The closure of the port by Chinese authorities has prevented companies from accessing or moving their assets, thereby creating causes of loss that may trigger business interruption coverage.

Insurers typically require explicit documentation, including government documents, to support these types of claims. The capture of necessary and crucial documentation should occur as soon as possible and continue throughout the claims process.

Local versus master insurance policies and related coverage issues

Companies need to be aware that differences in underwriting practices and policies by Chinese insurers may create gaps in coverage.

Additionally, any operating companies in China that are part of joint ventures with foreign companies may face issues regarding varying interests by the parties to the joint venture.

It is crucial to fully understand these interests and their potential impact on insurance recovery early in the claims process.

At this time, we anticipate losses resulting from Tianjin will continue to unfold over the months ahead. Risk professionals are well encouraged to closely monitor potential losses as discussed above and to consult with their advisors, as required, throughout the process.

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Aquifers Approaching Point of No Return

New studies warn that some of the world's largest aquifers may soon run dry, with no hope of ever filling again.
By: | July 1, 2015 • 2 min read

A new pair of studies show many of the largest aquifers are being depleted at alarming rates. Out of 37 of the world’s largest aquifers, more than 21 are past sustainability tipping points, which means that the rate of withdrawal exceeds the rate of replenishment.


Of those at highest risk, 13 are on the verge of exceeding the point at which they may not come back.

In a June 17 PBS NewsHour broadcast, Professor James S. Famiglietti of the University of California, Irvine, the lead author of one of those reports, discusses the potential impact of the dwindling supply of freshwater resources.

Famiglietti’s comments support those of experts interviewed for Aquifer: Nothing in the Bank, part of R&I’s April 2015 Emerging Risks special coverage. In the April article, experts discussed the deep impact of the depletion of California’s Central Valley aquifer on agriculture, as well as the ripple effects for real estate, construction, energy production and more.

VIDEO: Reports confirm that California’s Central Valley has been losing about 5.5. trillion gallons of groundwater per year for the last four years.

The R&I Editorial Team may be reached at [email protected]
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Sponsored Content by CorVel

Telehealth: The Wait is Over

Telehealth delivers access to the work comp industry.
By: | November 2, 2015 • 5 min read


From Early Intervention To Immediate Intervention

Reducing medical lag times and initiating early intervention are some of the cornerstones to a successful claims management program. A key element in refining those metrics is improving access to appropriate care.

Telehealth is the use of electronic communications to facilitate interaction between a patient and a physician. With today’s technology and mass presence of mobile devices, injured workers can be connected to providers instantaneously via virtual visits. Early intervention offers time and cost saving benefits, and emerging technology presents the capability for immediate intervention.

Telehealth creates an opportunity to reduce overall claim duration by putting an injured worker in touch with a doctor including a prescription or referral to physical therapy when needed. On demand, secure and cost efficient, telehealth offers significant benefits to both payors and patients.

The Doctor Will See You Now

Major healthcare players like Aetna and Blue Cross Blue Shield are adding telehealth as part of their program standards. This comes as no surprise as multiple studies have found a correlation between improved outcomes and patients taking responsibility for their treatment with communications outside of the doctor’s office. CorVel has launched the new technology within the workers’ compensation industry as part of their service offering.

“Telehealth is an exciting enhancement for the Workers’ Compensation industry and our program. By piloting this new technology with CorVel, we hope to impact our program by streamlining communication and facilitating injured worker care more efficiently,” said one of CorVel’s clients.

SponsoredContent_Corvel“We expect to add convenience for the injured worker while significantly reducing lag times from the injury to initiating treatment. The goal is to continue to merge the ecosystems of providers, injured workers and payors.”

— David Lupinsky, Vice President, Medical Review Services, CorVel Corporation

As with all new solutions, there are some questions about telehealth. Regarding privacy concerns, telehealth is held to the same standards of HIPAA and all similar rules and regulations regarding health information technology and patients’ personal information. Telehealth offers secure, one on one interactions between the doctor and the injured worker, maintaining patient confidentiality.

The integrity of the patient-physician relationship often fuels debates against technology in healthcare. Conversely, telehealth may facilitate the undivided attention patients seek. In office physicians’ actual facetime with patients is continually decreasing, citing an average of eight minutes per patient, according to a 2013 New York Times article. Telehealth may offer an alternative.

Virtual visits last about 10 to 15 minutes, offering more one on one time with physicians than a standard visit. Patients also can physically participate in the physician examination. When consulting with a telehealth physician, the patient can enter their vital signs like heart rate, blood pressure, and temperature and follow physical cues from the doctor to help determine the diagnosis. This gives patients an active role in their treatment.

Additionally, a 2010 BioMed Central Health Services Research Report is helping to dispel any questions regarding telehealth quality of care, stating “91% of health outcomes were as good or better via telehealth.”

Care: On Demand

By leveraging technology, claims professionals can enhance an already proactive claims model. Mobile phones and tablets provide access anywhere an injured worker may be and break previous barriers set by after hours injuries, incidents occurring in rural areas, or being out of a familiar place (i.e. employees in the transportation industry).

With telehealth, CorVel eliminates travel and wait times. The injured worker meets virtually with an in-network physician via his or her computer, smart phone or tablet device.

As most injuries reported in workers’ compensation are musculoskeletal injuries – soft tissue injuries that may not need escalation – the industry can benefit from telehealth since many times the initial physician visit ends with either a pharmacy or physical therapy script.

In CorVel’s model, because all communication is conducted electronically, the physician receives the patient’s information transmitted from the triage nurse via email and/or electronic data feeds. This saves time and eliminates the patient having to sit in a crowded waiting room trying to fill out a form with information they may not know.

Through electronic correspondence, the physician will also be alerted that the injured worker is a workers’ compensation patient with the goal of returning to work, helping to dictate treatment just as it would for an in office doctor.

In the scope of workers’ compensation, active participation in telehealth examinations, accompanied by convenience, is beneficial for payors. As the physician understands return to work goals, they can ensure follow up care like physical therapy is channeled within the network and can also help determine modified duty and other means to assist the patient to return to work quickly.


Convenience Costs Less

Today, convenience can often be synonymous with costly. While it may be believed that an on demand, physician’s visit would cost more than seeing your regular physician; perceptions can be deceiving. One of the goals of telehealth is to provide quality care with convenience and a fair cost.

Telehealth virtual visits cost on average 30% less than brick and mortar doctor’s office visits, according to California state fee schedule. In addition, “health plans and employers see telehealth as a significant cost savings since as many as 10% of virtual visits replace emergency room visits which cost hundreds, if not thousands, of dollars for relatively minor complaints” according to a study by American Well.

“Telehealth is an exciting enhancement for the Workers’ Compensation industry and our program. By piloting this new technology with CorVel, we hope to impact our program by streamlining communication and facilitating injured worker care more efficiently,” said one of CorVel’s clients.

Benefits For All

Substantial evidence supports that better outcomes are produced the sooner an injured worker seeks care. Layered into CorVel’s proactive claims and medical management model, telehealth can upgrade early intervention to immediate intervention and is crucial for program success.

“We expect to add convenience for the injured worker while significantly reducing lag times from the injury to initiating treatment,” said David Lupinsky, Vice President, Medical Review Services.

“The goal is to continue to merge the ecosystems of providers, injured workers and payors.”

With a people first philosophy and an emphasis on immediacy, CorVel’s telehealth services reduce lag time and connect patients to convenient, quality care. It’s a win-win.

This article was produced by CorVel Corporation and not the Risk & Insurance® editorial team.

CorVel is a national provider of risk management solutions for employers, third party administrators, insurance companies and government agencies seeking to control costs and promote positive outcomes.
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