Driving Success for GM
Al Gier, GM’s director of Global Risk Management & Insurance, felt so strongly about Elisa Black’s work in 2013 that he nominated her personally as a Power Broker®. That’s quite an endorsement. In fact, Gier and Frida Berry, GM’s manager of Liability Risk Financing, agree that not only did Black manage that critical global juggling act, but she did it with her professional, focused style.
“Elisa was instrumental in helping reduce collateral requirements and improving the efficiency of the global claims handling process,” Gier said. “Her client philosophy focuses on being prepared and setting the marketing standard at the forefront of the negotiation.”
Gier explained that any broker can negotiate with a carrier post-quote. More impressive is doing the legwork so you come to the table prepared to negotiate ahead of time, a Black trademark. Also, for a large global enterprise, he said, timing is everything. So finalizing financial negotiations early allows the time to fulfill the administrative and contractual obligations of an insured — the lifeline of most international programs.
Gier said Black is great at articulating obligations and time constraints.
Bermuda Excess Market Wizardry
With the automotive market continuing to recover, the Bermuda excess market is looking to boost premiums come renewal time. To help alleviate that pricing stress, Chris Heinicke and his Aon team do their best to negotiate with markets to keep premiums from climbing.
In 2013, Heinicke faced a specific challenge for a client that was in the midst of a claims issue with one market that had a sizable amount of capacity on the excess casualty program. The issue was on a completely separate line of business, but was enough of a problem that the client had made the decision to cut this market from all of their lines of business. That decision was made after the entire program had already been quoted at the expiring premium and there was little to no capacity left in Bermuda. Heinicke and his team worked quickly by increasing capacity with the only market in Bermuda that had something available, and then worked with the U.S. and London teams to get the terms, pricing and capacity needed to replace the market. In the end, the client was pleased with the results and impressed at the quick response.
“Chris’ knowledge of the Bermuda markets helped us structure a program with the broadest coverage,” said the liability risk financing manager from another large automaker. “We have a very good risk profile, and Chris ensures we aren’t being charged improperly.”
A risk manager from a third automaker credited Heinicke with doing a “fantastic job” in helping the company identify critical areas the Bermuda markets focus on, as well as what is needed to communicate those key areas to underwriters.
Marshalling the Marsh Resources
In this case, the product over-shipment would create a much larger balance sheet exposure than the client would normally face. Also, the client’s treasury department wanted to use the large shipment to enhance cash flow as well as its borrowing base. Kowalski found a solution involving both private insurance and governmental support to manuscript a program that not only provided vital risk mitigation, but also enhanced this client’s cash flow management needs.
To make things happen, Kowalski often collaborates with Marsh brokerage teams on a global scale — from Detroit, New York, and Chicago to Bermuda, London, Zurich and various offices throughout Asia. Along the way, he has successfully placed complex risk finance programs involving more than 73 global markets and billions of dollars of capacity for a single line of coverage.
“Michael is our client executive and we have worked together for a number of years,” said Al Gier, director, Global Risk Management & Insurance at General Motors. “He has the skills we like to see in a broker — mainly, responsiveness and delivering the proper resources quickly.”
Expertise and Knowledge
Key Air Inc. was getting ready to consider other brokers until Joseph Braunstein was assigned to their account, said Greg Kinsella, president and CEO of Key Air, which manages and operates aircraft owned by others. “We agreed that if we were going to Marsh that he would make the difference, and he definitely has,” said Kinsella. “It was really on the customer service side. He didn’t go through the motions and just offer minimum basic support. He really looked at our policies.”
Another major benefit Braunstein, Marsh’s General Aviation practice leader, offered Key Air is a user-friendly handbook the company can use to educate its clients on the various coverages available to them and how the policies would work when needed.
“Joe took the initiative to create that. It really gives me and my team a tool to sit down with our clients and educate them on aviation insurance,” Kinsella said. “It has helped us be more effective.”
He was able to transition the perception of insurance from a liability to an asset.
The director of operations for a large aircraft charter company praised Braunstein as “a fantastic resource.”
“When Joe and Marsh got our business, we immediately saw an increase in coverage and a decrease in premium,” he said.
In addition, Braunstein’s “expertise and knowledge in aviation insurance is quite evident. Joe is looking out for our interests and that’s something we did not have before.”
Sharing His Knowledge
John Geisen, senior vice president at Aon, has been an account leader in the aviation space for nearly two decades, and his clients have benefited from his in-depth knowledge.
“In the aviation industry, there are a lot of challenges that come up,” said Bill Hoyt, insurance risk manager at the Metropolitan Airports Commission, a public corporation that provides aviation services throughout the Twin Cities metropolitan area, including operating the Minneapolis-St. Paul International Airport.
“The issues change almost every day,” Hoyt said. “In this industry, you have got to have someone who has a significant understanding of the risks. That’s what John has and that’s what John brings to the table for us.”
In addition to the typical coverage, Hoyt relies on Geisen for unusual coverage challenges, counting on him to determine whether current policy wording covers such a risk or if an endorsement is required. One example, he said, involved determining liability issues associated with glare and other risks related to solar panels.
For Karen Erazo, manager, Legal Affairs, Sun Country Airlines, Geisen’s attentiveness, knowledge and ideas are as welcome as his focus on keeping costs down.
One issue Geisen has been focusing on this past year is the workers’ compensation impact of senior flight attendants, she said. “He’s come up with suggestions on addressing lifting and other ways to help our flight attendants reduce the risk of injury,” Erazo said.
“He’s very knowledgeable and very anxious to share that knowledge,” she said.
Customization and Confidence
From helping out a mom-and-pop airline to covering aviation risks in war-torn countries, Jason Hendrix does it all. A pilot himself, Hendrix furthered his knowledge at the Embry-Riddle Aeronautical University, a college designed for aviation professionals, and as an aviation underwriter prior to becoming a broker.
“You can ask him anything about an airplane and he will tell you,” said Chrissy McCreary, supervisor, Risk Management, KBR, which operates air bases internationally, including in Iraq and Afghanistan. “Our corporate program is pretty specialized. We have bits and pieces all over the world and every project is different,” she said.
For Jake Duplechin, president and owner of Executive Aviation Management, Hendrix, an assistant vice president at Aon, helped him make his dream of owning his own aircraft management business a reality by fostering relationships with the insurance marketplace and putting together a fleet policy that covers the seven airplanes owned by about 15 companies.
“It’s almost like calling a buddy of mine on the phone but he’s such a professional when it gets down to it,” Duplechin said.
A challenge this year for CGG was the acquisition of a fleet of 28 aircraft in four countries.
“We never had to insure planes before,” said Erin Obrien Link, CGG’s enterprise risk management and insurance vice president. The situation was complicated by the planes being registered in different countries and having numerous local policies that were in effect. “He was able to put together a global policy, which was extremely complicated,” she said.
A True Partnership
As Intrepid Aviation was looking to grow, they called upon Drew Johnston, a vice president at Aon. “We were able to pivot very effectively from two aircraft to now 10 aircraft with customers in nine countries, said Intrepid’s chief investment officer, Brian Rynott. “We were looking for help to manage the portfolio and help plot out the growth trajectory, and someone to support us in that growth from an insurance perspective.”
Johnston was also crucial in coming up with a risk solution for Frank Perryman, president and CEO of Perryman Co., who is passionate about being in the left-hand seat and flying the company’s fleet of jet aircraft.
“Our qualifications are no different than professional pilots who would fly for any of the airlines, but being the owner and operator takes it to a unique difference,” Perryman said. “He takes the time to have an intimate knowledge of what we do and how we do it.”
Johnston also helped Perryman communicate the company’s message to their underwriter, which created “a better bond,” Perryman said. It also resulted in the liability limit the company required at a very competitive price. “There’s nothing that is cookie cutter anymore,” he said. “You have got to design solutions for each and every client and that’s what he did.”
Johnston also helps Beechcraft navigate its way through its international risks and the demands of its business partners, said Cheryl Herbst, manager, Insurance and Risk Management, Beechcraft. “They will ask for the moon,” she said. “He helps us find a solution, sometimes at the last minute.”
Chris Taylor “worked his magic” as he guided Hawker Beechcraft through a management liability renewal process prior to entering bankruptcy and in the formation of Beechcraft, the new company.
“There are special issues that arise, and it can be a real challenge to secure insurance prior to entering Chapter 11,” said Cheryl Herbst, manager, Insurance and Risk Management, Beechcraft. “However, thanks to Chris, we went through Chapter 11 with full coverage and a run-off policy.”
Taylor “just went above and beyond my expectations,” and worked late into the night as negotiations regarding formation of the new company took place. “The day we emerged as a new company, we had a total insurance program in place,” she said.
Taylor, a vice president at Aon, also was able to bring innovative solutions to a defense contractor, related to its wage and hour coverage and D&O needs, especially international D&O coverage.
Among the challenges he was able to address were dealing with the contractor’s multiple internal stakeholders, changing compliance requirements in various countries and communication issues with non-insurance professionals.
At another organization, a plastics manufacturer, Taylor had to handle a complex transaction with multiple U.S. and international D&O policies during an acquisition, which required extensive communication and time management as he worked with the new company’s risk management team and broker to align coverage to protect both companies.
AerSale has multifaceted and complicated aviation risk exposures, but William Willer was able to find ways to create solutions that work for both the company and underwriter.
“He provides excellent information and frankly seems to be able to get the underwriters to come along and cooperate with us. That impressed me,” said Gary Eakins, vice president and corporate counsel of AerSale Inc., an aircraft leasing company that ferries aircraft.
Insurance is very expensive for ferrying flights, and it goes up astronomically depending on the number of flights, said Eakins.
“That never made a lot of sense. It’s the landing and take offs that get you, not the number of miles you cruise at altitude,” he said. “Bill was able to moderate those costs in a reasonable and effective way.”
In addition, Willer’s technical knowledge has been extremely helpful in drafting contracts, and he has been very responsive. “The aviation space is quite small in terms of people. They all know each other. I find Bill to be very effective in dealing with underwriters when unusual issues come up or when we need to explore an area where we hadn’t been before,” Eakins said.
Willer, an area president at Arthur J. Gallagher, also helped an airline through a Chapter 11 process, while correcting some serious and costly actions caused by a previous broker, and helped the risk manager of an aircraft leasing company overhaul the entire risk management process.
Medication Monitoring Achieves Better Outcomes
There are approximately three million workplace injuries in any given year. Many, if not the majority, involve the use of prescription medications and a significant portion of these medications is for pain. In fact, prescription medications are so prevalent in workers’ compensation that they account for 70% of total medical spend, with roughly one third being Schedule II opioids (Helios; NCCI; WCRI; et al.). According to the U.S. Drug Enforcement Administration (DEA), between the years of 1997 and 2007, the daily milligram per person use of prescription opioids in the United States rose 402%, increasing from an average of 74 mg to 369 mg. The Centers for Disease Control and Prevention (CDC) reports that, in 2012, health care providers wrote 259 million prescriptions—enough for every American adult to have a bottle of pills—and 46 people die every day from an overdose of prescription painkillers in the US. Suffice to say, the appropriate use of opioid analgesics continues to be a serious issue in the United States.
Stakeholders throughout the workers’ compensation industry are seeking solutions to bend the curve away from misuse and abuse and these concerning statistics. Change is happening: The American College of Occupational and Environmental Medicine (ACOEM) and the Work Loss Data Institute have published updated guidelines to promote more clinically appropriate use of opioids in the treatment of occupational injuries. State legislatures are implementing and enhancing prescription drug monitoring programs (PDMPs). The Food and Drug Association (FDA) is rescheduling medications. Pharmaceutical manufacturers are creating abuse-deterrent formulations. Meanwhile payers, generally in concert with their pharmacy benefit manager (PBM), are expending considerable effort to build global medication management programs that emphasize proactive utilization management to ensure injured workers are receiving the right medication at the right time.
A variety of factors can still influence the outcome of a workers’ compensation claim. Some are long-recognized for their affect on a claim; for example, body part, nature of injury, state of jurisdiction, and regulatory policy. In contrast, prescribing practices and physician demographics are perhaps a bit unexpected given the more contemporary data analysis showing their influence on outcomes. Such is the case for medication monitoring. Medication monitoring tools promote patient safety, confirm adherence, and identify potential high-risk, high-cost claims. Three of the more common medication monitoring tools include:
- Urine Drug Testing (UDT) is an analysis of the injured worker’s urine that detects the presence or absence of a specified drug. Although it is not a diagnosis, UDT results are generally a reliable indicator of what is present (and what is not) in the injured body worker’s system. The knowledge gained through the testing helps to minimize risks for undesired consequences including misuse, abuse, and diversion of opioids. With this information in hand, adjustments to the medication therapy regimen or other intervention activities can occur. UDT can also be an agent of positive change, as monitoring often leads to behavior modification, whether in direct response to an unexpected testing result or from the sentinel effect of knowing that medication use is being monitored.
- Medication Agreements or “Pain Contracts” signed by the injured worker and their prescribing doctor serve as a detailed and well-documented informed consent describing the risks and benefits associated with the use of prescription pain medications. Medication agreements help the prescribing doctor set expectations regarding the patient’s adherence to the prescribed medication therapy regimen. They serve as a means to facilitate care and provide for a way to document mutual understanding by clearly delineating the roles, responsibilities, and expectations of each party. Research also suggests that medication agreements promote safety and education as injured workers learn more about their therapy regimen, its risks, and benefits.
- Pill Counts quantify adherence by comparing the number of doses remaining in a pill bottle with the number of doses that should remain based on prescription instructions. Most often, physicians request pill counts at random intervals or the physician may ask the injured worker to bring their medication to all appointments. As a monitoring tool, pill counts can be useful in confirming proper use, or conversely, diversion activities.
On a stand-alone basis, these tools rank high on individual merit. When used together as part of a consolidated medication management approach, their impact escalates quite favorably. The collective use of UDT, Medication Agreements, and pill counts enhance decision-making, eliminating gaps in understanding. Their use raises awareness of potential high-risk, high-cost situations. Moreover, when used in concert with a collaborative effort on the part of the payer, PBM, physician, and injured worker, they can improve communication and align objectives to mitigate misuse or abuse situations throughout the life of a claim.
Medication monitoring can achieve better outcomes
The vast majority of injured workers use medications as directed. Unfortunately, situations of misuse and abuse are far too common. Studies show a growing trend of discrepancies between the medication prescription and actual medication-regimen adherence when it comes to claimants on opioid therapy (Health Trends: Prescription Drug Monitoring Report, 2012). In response, payers, working alongside with their PBM and other stakeholders, are deploying medication monitoring tools with greater frequency to verify the injured worker is appropriately using their medications, particularly opioid analgesics. The good news is these efforts are working. Forty-five percent of patients with previously demonstrated aberrant drug-related behaviors were able to adhere to their medication regimens after management with drug testing or in combination with signed treatment agreements and multispecialty care (Laffer Associates and Millennium Research Institute, October 2011).
In our own studies, we have similarly found that clinical interventions performed in conjunction with medication monitoring tools such as UDT reduces utilization of high-risk medications in injured workers on chronic opioid therapy. Results showed there was a decrease in all measures of utilization, driven primarily by opioids (32% decrease) and benzodiazepines (51% decrease), as well as a 26% reduction in total utilization of all medications, regardless of drug class. This is proof positive that medication monitoring can be useful in achieving better outcomes.