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Line of Business Director
Zurich Financial Services

Painting a Fuller Driver Portrait

Telematics reporting tools track driver behavior and develop a preventative approach, not a punitive one, to lower claims frequency and severity.

James Noble had an idea he'd been mulling since the early 1990s. Three years ago, he decided the time was right to bring his idea to the table.

"From a risk management point of view, we've always looked in the rearview mirror, looking at accidents and violations as measures of performance," Noble said. "You were using failure to gain a view on failure."

The updated method he proposed melded new telematics technology with a range of other data, including motor vehicle record data and the customer's own internal records to create a preventative approach. "Telematics allows a real-time look, which combined with historical data, creates a fuller portrait."

Noble, who is a line of business director at Zurich Financial Services and has been with the company for 10 years, shared the idea with his colleagues and it soon created a lot of excitement within the organization.

An 18-month development process ensued. Colleagues and outside experts joined in a rigorous creative process that generated numerous drafts.

"It got to be a bigger product than we thought it was going to be initially because there is so much data that we could gather,'' Noble said. "Every time we turned the page we found something new. Part of that whole process was sifting through what was real and what wasn't from a telematics capability standpoint."

The process resulted in the 2010 soft launch of Zurich Fleet Intelligence (ZFI), a system that combines vehicle telematics systems with extensive reporting tools to turn raw data into insights that help customers with a variety of tasks. Those tasks include reducing fleet operating costs, frequency and severity of vehicle crashes, and carbon footprints, along with increased fuel economy and insurance costs and improved employee driving skills.

A key element of Leisure's innovative approach and of his success is a keen understanding of human psychology. "This approach is measuring people's emotions," he said. Leisure wanted to make sure that, when injuries did occur, injured employees were attended to. "I was thinking there's a good percentage of our staff who are injured and we're thinking they'll be fine but no one is checking on them, and they're home thinking someone will reach out to them. If we didn't interact, they might run to an attorney.

"It's building a bridge to make sure the staff member is OK, and we know how the accident happened so we can prevent future ones,'' he said. "We're pulling in all the people who matter: manager, claims adjuster, medical person. A lot of people have not had a positive experience with a claims experience--they think they're going to be a claim number." Instead, they now get personalized attention. "As a result, we have virtually no litigation against us," he said.

With such dramatic results, what's next? "The low hanging fruit is gone," Leisure said. "I'm really focused on training. That's where we can take it to next level."

His future plans include looking at "every piece of business," from purchasing to cyber risk, as well as training and the use of technology. All in all, this is a man who is proud of his successes, but not resting on his laurels. "I'm very passionate about what I do,'' he said. "I've been doing it a long time, and I still get excited every morning trying to figure out what I'm going to do next."

-- Lynn Rosen

Risk managers and their insurance partners should put their trust in the art of incremental improvement.

Risk innovators deliver results with breadth and depth.

Only by bold action and innovation can carriers provide true coverage for risks in a rapidly changing world.

Eight leaders in the risk and insurance management arena committed to doing what is right instead of what is easier.

Lead Consultant
Aon Global Risk Consulting

On the Go and in One Go with iPads

Consultants leap into 3G technology and turn around site surveys in record time.

When a management company in Abu Dhabi wanted surveys of 750 of its buildings done in six months, standard assessment processes wouldn't come close to delivering results on such a tight schedule.

"Generally when you do a property survey on various facilities you go out and do the survey and then you can spend as much as 10 to 20 days doing various reviews and preparing a report," said Anne Parkin, lead consultant at Aon Global Risk Consulting.

But the prospective Abu Dhabi client made it clear it couldn't afford to wait that long.

Enter the Apple iPad 3G technology, which had just come onto the market. Parkin eyed the iPad and saw it as a godsend. "The iPad had just come out and everybody was talking about it, it was everywhere, and I thought it would be great to utilize this technology," she said.

"What happened was that I was brainstorming with our account executive and I said to him it would be great if we could go out and do this work onsite with iPads, and then basically as soon as we finished doing the surveys onsite we would be able to send the report through to the client," Parkin said.

The account executive bought into the idea and soon so did the client, who wanted detailed information to help plan improvements to buildings for the next 10 to 20 years. "The client was very excited about being on the cutting edge of technology," Parkin said.

"The unique thing we were doing in the Middle East was gathering basic information so we didn't need to do the formal reviews we normally had to prepare," she said. "So basically we were able to provide the client with the information as soon as we left the site, which is really a unique thing when you're doing risk-control reports."

This process was saving money as well as time because Aon didn't have to write down the information twice--"we didn't have to write it down in a notebook and then go back and write it down on a computer," Parkin said. "You can get it done on one go. That was the main reason the client selected us, because we were forward-thinking enough to use new technology to save time and money."

Vice President, Risk Services
The Cheesecake Factory

Risk Manager Walks the Walk

Instead of ordering a new claims-allocation system, Kurt Leisure taught his managers to think about claims, and instill in them that safety and claims can be controlled.

Kurt Leisure has been in the restaurant business for 25 years, the last 12 at The Cheesecake Factory, where he is vice president, risk services. If you ask him for evidence of his success, he's liable to talk to you about shoes.

To be specific, the company's slip-resistant shoe program is part of a unique claims-allocation program developed and implemented by Leisure. It has led to a 78 percent drop in the cost of risk over a seven-year period. Other elements of the program include a nurse triage program, highly customized safety training, and reporting claims within 24 hours.

Most significantly, Leisure has involved employees at every level in learning about and adopting the program, and creating a system of rewards for participation. The success of this program was significant for Leisure: "That's telling me that we found a good solution and we have buy-off from everyone from the dishwasher up to the management."

Leisure also has supporters throughout the restaurant industry, including Patrick Sterling, director of risk and administration at Texas Roadhouse. Sterling met Leisure through his involvement in industry groups. "I quickly realized he's a leader. You could tell the way folks respect him. I thought, 'I gotta get to know this guy'; I sought him out," Sterling said. Leisure has become a mentor to him, generous with guidance and advice, and his claims-allocation program has been a model for Sterling's own.

Sterling admires Leisure's grasp of how the industry works. "He understands the business very well and knows how to get programs in place. Restaurant operators are very entrepreneurial. Part of being a smart and successful risk manager is knowing your culture. You can't necessarily flip a switch--sometimes it takes two to three years to change culture. Kurt gets that very well."

Leisure has taken a step-by-step approach to implementing new safety programs, making sure to have companywide support. "Risk management was new to when I came into the organization twelve years ago. Some risk managers take a machine gun approach,'' he said. "I'd be a complete failure if I didn't have buy-off in my operations teams in the programs I push down to them. I'm careful what I do push down and I make sure it works. Our program is complicated and has a lot of moving pieces. Most off-the-shelf things don't work in our operations."

Leisure's long-term goal was to instill a new mindset that safety and claims are not just a cost of business, and that claims can be prevented and costs controlled. Rather than jumping in with a new claims-allocation system, he started by teaching a new way to think about claims. "First here's how to prevent claims from happening. Next, here's how to mitigate when it happens. I set them up for success," he said.

Leisure stresses what's distinct about The Cheesecake Factory. "If you look at the culture of our restaurant, our differentiator is service. You expect something and we deliver way over and beyond,'' he said. "If you drop a fork, we present you with a new one on a silver platter and you think, 'Wow, Is this the Ritz Carlton?' '' The emphasis on excellent service was applied to the claims process.

Corporate Medical Director
Southern California Edison

Turning Red Flags into Green

Energy utility program cuts injury rates to employees in the first year on the job.

When two of a large power company's most critical business units express concerns about a high incidence of injuries occurring during employees' first year on the job, it sets off risk management red flags.

For Dr. Susan Heller, the corporate medical director of Southern California Edison (SCE) in Rosemead, Calif., those red flags turned to green in the form of cost savings (as well as safer employees), as Heller put together an innovative and successful solution to reduce on-the-job injuries.

Heller began by meeting with business unit partners, and it was quickly decided that any solution would have to achieve several goals, including supporting safety on the job, reducing workers' compensation claims, reducing occupational injuries or illnesses that require medical treatment more than simple first aid which are recorded by the Occupational Safety & Health Administration (OSHA).

Complicating matters was the fact that SCE was about to launch its biggest capital expenditure initiative in the company's 140-year history, involving replacement and/or upgrading of 50-year- old transmission lines and facilities, as well as the investment in new "green'' technology. The result was expanded growth for the company and the hiring of hundreds of new employees.

"In this environment, it was critical to ensure the hiring of healthy and productive workers in order to meet SCE's future needs," Heller said. Heller and the cross-functional team she led designed the injury-reduction program for new employees as a three-step process consisting of:

-- A post-offer medical history used to ensure a candidate's safe ability to participate in the job they were hired for, but that was not used in candidate selection. If a medical issue is identified, the candidate is asked to provide a medical authorization/release from his or her physician in order to continue with step two of the assessment.

-- A post-job offer physical examination used to ensure that the candidate is able to safely participate in job-specific testing. If a medical issue is identified, the candidate is asked to provide a medical authorization/release from his or her physician in order to continue with step three of the assessment.

-- Job-specific testing designed to establish the employee's capability to safely perform the essential job duties. Testing results are used to determine "capable" or "not capable." If a candidate is not capable of physically performing the essential job functions, he or she does not meet the requirements of the job, and the job offer can be withdrawn. The candidate can reapply again once they meet the capability job requirements.

At first, Heller thought post-employment testing could be done in-house. But after more research, SCE partnered with a vendor that could customize a program to meet the company's unique and specific needs.

You don't hear a lot about innovation in risk management education or training because there doesn't seem to be all that much different being offered, or so some think. Before I address that fallacy, let's consider the importance of this issue.

Practitioners have been using the Total Cost of Risk as a key metric in the discipline for some time.

Just as the corporate business strategy is central to being able to achieve key goals and ultimately deliver the mission, risk strategy must both assume similar importance.