Hearing from Employers
Employer engagement and superior service provider performance are acknowledged keys to successfully managing workers’ compensation claims.
Those employers that care enough to produce great results for their injured workers don’t tend to beat their own drums, though.
But they will get an unprecedented chance to share their strategies and practices on a wide range of workers’ compensation topics at the National Workers’ Compensation and Disability Conference® & Expo at the Mandalay Bay Hotel & Casino in Las Vegas, Nov. 19-21.
Two speakers from Harley-Davidson, for example, will discuss claims-mitigation practices that saved their company millions of dollars. Those practices include integrating a variety of company resources including health services, safety and ergonomics expertise.
They will also tell how Harley-Davidson integrated the services of vendor partners, such as BTE Technologies, which helps return injured employees to the job and keeps others working with a post-offer employment testing program that assesses functional ability to safely perform work, said Beth Mrozinsky, the motorcycle manufacturer’s director of safety and health.
Their work has helped address challenges common in many U.S. workplaces, such as those driven by an aging workforce.
Harley-Davidson’s successes also come from integrating vendor partners to help explore loss-reduction processes. The company is increasingly applying those processes to non-occupational injuries after proving them successful in mitigating occupational issues, Mrozinksi said.
“We work really hard with our vendor partners to really pull this together,” Mrozinsky said. “We are almost like one unit that thinks through these processes.”
In another session, speakers Darin Hampton, workers’ compensation regional coordinator at International Paper, and Jodie L. Massingill, senior manager, casualty claims at Sysco Corp., will share their strategies for successfully overseeing a range of services and how they get the best possible support from vendor partners.
In addition to employers, presenters will include representatives from some of the nation’s largest workers’ comp insurers, third-party administrators, brokers, managed care companies and attorneys specializing in workers’ compensation.
Focus on Medical
A growing trend to improve the quality of medical care delivered to injured workers relies on measuring doctor performance to build networks limited to providers capable of producing the best claims outcomes.
Jane Ish, national networks director for Liberty Mutual Insurance, will present a conference session on outcomes-based networks.
“We believe if you start right with the right physician and his entire medical ecosystem — in terms of who he counts on for referring — then you are more likely to have injured workers go back to work quicker and reduced medical costs,” she said.
Randy L. Triplett, workers’ compensation and integrated disability manager for The Goodyear Tire & Rubber Co., will join Ish in the presentation.
Other current challenges and the tools being applied to mitigate them will also receive prominent attention at the conference.
Jim Andrews, executive VP of pharmacy services at Healthcare Solutions Inc., and David Smith, divisional VP of risk management at Family Dollar Stores Inc., for example, will talk about how analytics and predictive modeling help identify and prevent drug abuse.
The nation’s growing diversity and that dynamic’s impact on workers’ comp and disability management will be examined by Jennifer De La Torre, executive director of workforce diversity at AT&T and formerly the company’s director of risk management.
Elizabeth Demaret, executive VP, chief customer relationship officer at Sedgwick Claims Management Services Inc., will join De La Torre.
De La Torre said considerations of racial and ethnic diversity, treatment of veterans in the workforce and age differences are all impacting workers’ comp management strategies.
Expect to hear session topics not commonly offered at workers’ comp conferences, but that nonetheless have significant impact on the industry and employer programs.
Three private equity executives, whose firms owned well-known workers’ comp companies, will discuss the growing influence of private equity in this business. It is unusual for private equity leaders to address a workers’ comp crowd, said Joe Paduda, principal at Health Strategy Associates LLC.
“Private equity people speak at investor conferences and at some other conferences, but never to my knowledge in a workers’ comp-related conference,” said Paduda, who will moderate the session. “Especially folks like these who actually assess the business, follow the workers’ comp industry and really understand it at both a granular and strategic level.”
Paduda promised to allow plenty of time for audience questions.
“We are going to have an extended question and answer [time] just because there is so much interest in the role of private equity in the workers’ comp business,” he said.
Legal and regulatory issues are also on tap.
The Occupational Safety and Health Administration’s 2013 temporary worker initiative directed its field inspectors to place greater emphasis on assessing whether employers using temp workers comply with their responsibilities.
“There has been a lot of postulation about what the ACA’s impact is on the industry.” —Denise Zoe Gillen-Algire, director, managed care and disability corporate risk, Safeway Inc.
Corey Berghoefer, senior VP, risk management and insurance for Ranstad, a global employment services provider, will join two workers’ comp attorneys to discuss OSHA’s initiative and other risk-management considerations accompanying current growth in temp worker hiring.
“I’ll talk about the duties and responsibilities, and how OSHA will come in during an investigation and view each of the parties,” he said.
The Patient Protection and Affordable Care Act is another current topic that conference speakers will weigh in on at a session titled “Healthcare Reform: Strategies You Can Apply Now.”
“There has been a lot of postulation about what the ACA’s impact is on the industry,” said Denise Zoe Gillen-Algire, director, managed care and disability corporate risk at Safeway Inc. and the conference’s program co-chair. “We want to say, ‘OK, what is the takeaway? What does it mean to employers?’ We want to take that information and say, ‘What can you do as employers to manage your workers’ comp program and either prepare or mitigate some of the impacts?’ ”
William Wilt, president of Assured Research, will join Gillen-Algire.
Here are some other presentations:
Opening Keynote: Integrating Employees’ Health and Well-Being to Improve the Bottom Line
L. Casey Chosewood, M.D., is senior medical officer and director of the Office for Total Worker Health Coordination and Research Support at the National Institute for Occupational Safety and Health. Chosewood will demonstrate how to reduce employer costs by integrating occupational health and safety with health promotion and post-injury management.
Session: Modeling Managed Care for Program Impact
Speakers from two large, self-insured employers and a national workers’ comp consultant will explain managed care services and how to evaluate which ones deliver the best outcomes and greatest cost savings.
Speakers: Barry Bloom, principal at The bdb Group; John Riggs, manager of workers’ compensation, Disneyland Resort; and John Smolk, principal manager, workers’ compensation, Southern California Edison.
Session: Risk Financing: Selecting the Best Option for Your Company
Mark Walls, conference program co-chair and VP, communications and strategic analysis at Safety National, will cover a range of considerations for employers weighing various insurance arrangements. From buying first-dollar coverage and large deductible programs to self-insuring, he will lay out the key considerations for each.
Session: Loss Mitigation of High Value Workers’ Compensation Claims
Hear about risk analysis that can identify old claims previously considered incapable of being resolved. The session will seek audience participation while discussing several cost drivers such as treating-doctor issues and Medicare set-asides.
Speakers: Christianne Quinn, national workers’ compensation manager at Pep Boys; and David R. Kunz, managing partner at Kunz & Germick.
Session: Behavior-Based Safety Program: How You Can Prevent Injuries and Improve Product Quality
Safety and product quality go hand in hand, so a behavior-based safety program stands to improve loss prevention and high-quality production throughout a company.
Speaker: Julia Sfurm, corporate senior risk operations manager, Elkay Manufacturing Co.
Visit www.wcconference.com/agenda.html for a look at the conference’s complete agenda.
Not long out of college, Elizabeth Ruff arrived at Peerless Industrial Group in June of 2011, tasked with taking control of workers’ compensation for the company. She soon discovered that the company had a culture of lost time and that really bothered her.
“She said, ‘We’ve got to put a stop to this hemorrhaging,’ ” recalled her boss, Vice President of Human Resources Barbara Breza.
Ruff was intent on getting employees back to work, in some capacity, as soon as possible.
“One of the first things I initiated is that whenever somebody was injured on the job and they required immediate medical attention, either myself or Barb would actually go with the employee to the health care provider’s office and sit with them,” said Ruff.
“The reason that was really key was because we were able to talk to the doctor about the fact that Peerless accommodates almost every type of light duty or transitional option,” Ruff added.
Before Ruff began her new approach, Peerless had 40 lost-time claims, multiple years in a row.
“In 2012-2013, with a total of 386 employees in the company, we had it down to less than 25 claims,” said Ruff.
At the company’s main plant in Winona, Minn., which has 287 employees, Peerless has gone 700 days without a lost-time claim.
“It’s a pretty heavy-duty industrial manufacturing plant, so that’s a huge accomplishment, which we’re extremely proud of,” said Ruff.
“The head of underwriting at a major insurance company recently said that he has never seen anyone like Elizabeth at a company, big or small. She is truly one of a kind and a major difference-maker in our industry.” — Josh Warren, senior vice president of Equity Risk Partners
Josh Warren, senior vice president of Equity Risk Partners, Peerless’ broker, said, “They do have some additional lifting machines that make it easier on the employees, but the main difference is that Elizabeth and her colleagues in the HR department pay attention to their employees, learn from workplace injuries in order to avoid repeat situations and get people back to work.”
Warren added: “The head of underwriting at a major insurance company recently said that he has never seen anyone like Elizabeth at a company, big or small. She is truly one of a kind and a major difference-maker in our industry.”
Other accomplishments Ruff has initiated at Peerless include bolstering the company’s safety program. Safety is particularly important at Peerless because it is the largest manufacturer and distributor in North America for industrial and consumer chain and tractor products.
“One of the things I created was regular training programs,” Ruff said. “Each month, there is some type of training program project I am organizing, whether it is bringing in an external expert or coordinating with an internal supervisor.”
Another thing Peerless has done is to spend more money on capital each year to be proactive rather than reactive.
“Each year since 2011, we’ve been adding $20,000 per year just in capital for hoists,” she said.
Under Ruff’s direction, Peerless has also been aggressive in implementing ergonomic improvements, Breza said.
Ruff still works 20 hours a week at Peerless, while also working at BIC Graphic, which she joined in June.
“What I value most about Elizabeth is her knowledge and expertise and professionalism in the field of HR and how broad-based she is and that she came in that way to Peerless when she was so young,” said Breza. “She is just so intelligent.”
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A Renaissance In U.S. Energy
America’s energy resurgence is one of the biggest economic game-changers in modern global history. Current technologies are extracting more oil and gas from shale, oil sands and beneath the ocean floor.
Domestic manufacturers once clamoring for more affordable fuels now have them. Breaking from its past role as a hungry energy importer, the U.S. is moving toward potentially becoming a major energy exporter.
“As the surge in domestic energy production becomes a game-changer, it’s time to change the game when it comes to both midstream and downstream energy risk management and risk transfer,” said Rob Rokicki, a New York-based senior vice president with Liberty International Underwriters (LIU) with 25 years of experience underwriting energy property risks around the globe.
Given the domino effect, whereby critical issues impact each other, today’s businesses and insurers can no longer look at challenges in isolation one issue at a time. A holistic, collaborative and integrated approach to minimizing risk and improving outcomes is called for instead.
Aging Infrastructure, Aging Personnel
The irony of the domestic energy surge is that just as the industry is poised to capitalize on the bonanza, its infrastructure is in serious need of improvement. Ten years ago, the domestic refining industry was declining, with much of the industry moving overseas. That decline was exacerbated by the Great Recession, meaning even less investment went into the domestic energy infrastructure, which is now facing a sudden upsurge in the volume of gas and oil it’s being called on to handle and process.
“We are in a renaissance for energy’s midstream and downstream business leading us to a critical point that no one predicted,” Rokicki said. “Plants that were once stranded assets have become diamonds based on their location. Plus, there was not a lot of new talent coming into the industry during that fallow period.”
In fact, according to a 2014 Manpower Inc. study, an aging workforce along with a lack of new talent and skills coming in is one of the largest threats facing the energy sector today. Other estimates show that during the next decade, approximately 50 percent of those working in the energy industry will be retiring. “So risk managers can now add concerns about an aging workforce to concerns about the aging infrastructure,” he said.
Increasing Frequency of Severity
Current financial factors have also contributed to a marked increase in frequency of severity losses in both the midstream and downstream energy sector. The costs associated with upgrades, debottlenecking and replacement of equipment, have increased significantly,” Rokicki said. For example, a small loss 10 years ago in the $1 million to $5 million ranges, is now increasing rapidly and could readily develop into a $20 million to $30 million loss.
Man-made disasters, such as fires and explosions that are linked to aging infrastructure and the decrease in experienced staff due to the aging workforce, play a big part. The location of energy midstream and downstream facilities has added to the underwriting risk.
“When you look at energy plants, they tend to be located around rivers, near ports, or near a harbor. These assets are susceptible to flood and storm surge exposure from a natural catastrophe standpoint. We are seeing greater concentrations of assets located in areas that are highly exposed to natural catastrophe perils,” Rokicki explained.
“A hurricane thirty years ago would affect fewer installations then a storm does today. This increases aggregation and the magnitude for potential loss.”
On its own, the domestic energy bonanza presents complex risk management challenges.
However, gradual changes to insurance coverage for both midstream and downstream energy have complicated the situation further. Broadening coverage over the decades by downstream energy carriers has led to greater uncertainty in adjusting claims.
A combination of the downturn in domestic energy production, the recession and soft insurance market cycles meant greatly increased competition from carriers and resulted in the writing of untested policy language.
In effect, the industry went from an environment of tested policy language and structure to vague and ambiguous policy language.
Keep in mind that no one carrier has the capacity to underwrite a $3 billion oil refinery. Each insurance program has many carriers that subscribe and share the risk, with each carrier potentially participating on differential terms.
“Achieving clarity in the policy language is getting very complicated and potentially detrimental,” Rokicki said.
Back to Basics
Has the time come for a reset?
Rokicki proposes getting back to basics with both midstream and downstream energy risk management and risk transfer.
He recommends that the insured, the broker, and the carrier’s underwriter, engineer and claims executive sit down and make sure they are all on the same page about coverage terms and conditions.
It’s something the industry used to do and got away from, but needs to get back to.
“Having a claims person involved with policy wording before a loss is of the utmost importance,” Rokicki said, “because that claims executive can best explain to the insured what they can expect from policy coverage prior to any loss, eliminating the frustration of interpreting today’s policy wording.”
As well, having an engineer and underwriter working on the team with dual accountability and responsibility can be invaluable, often leading to innovative coverage solutions for clients as a result of close collaboration.
According to Rokicki, the best time to have this collaborative discussion is at the mid-point in a policy year. For a property policy that runs from July 1 through June 30, for example, the meeting should happen in December or January. If underwriters try to discuss policy-wording concerns during the renewal period on their own, the process tends to get overshadowed by the negotiations centered around premiums.
After a loss occurs is not the best time to find out everyone was thinking differently about the coverage,” he said.
Changes in both the energy and insurance markets require a new approach to minimizing risk. A more holistic, less siloed approach is called for in today’s climate. Carriers need to conduct more complex analysis across multiple measures and have in-depth conversations with brokers and insureds to create a better understanding and collectively develop the best solutions. LIU’s integrated business approach utilizing underwriters, engineers and claims executives provides a solid platform for realizing success in this new and ever-changing energy environment.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty International Underwriters. The editorial staff of Risk & Insurance had no role in its preparation.