A Renewable Impulse
Every cynic that derides the promise of renewable energy should have a chat with the Swiss pilot, businessman and adventurer Andre Borschberg.
Borschberg, along with his partner and countryman Bertrand Piccard, successfully piloted the first solar plane to fly across the United States in the spring and early summer of 2013. And insurance was there to help make it happen.
Swiss Re Corporate Solutions provided hull insurance, aircraft liability and crew personal accident coverage for the Solar Impulse, a solar-powered plane conceived, engineered and built in Switzerland.
After shorter flights in Europe and North Africa, the entirely solar-powered plane and its pilots took on the adventure of flying from the west coast to the east coast of the United States in five stages.
The plane, which has two propellers and is self-powered on takeoff, left Mountain View, Calif., on May 3. After stops in Phoenix, Dallas, St. Louis, Cincinnati and Washington, D.C., Solar Impulse arrived in New York on July 6, completing its adventure across America.
The ultimate goal of the project, a primary premise of which is to realize the promise of renewable energy, is an around-the-world flight sometime in 2015.
The insured value of the plane is some $9.17 million, according to its Zurich-based insurer. The total value of the project to date is some $112 million.
HB-SIA, the prototype that is crossing the United States, was not built to fly around the world, but data collected from the flight will be used to construct HB-SIB, the prototype that will be built for the global voyage.
There was no small amount of pressure on Borschberg and Piccard as they took on this cross-country trip. Investments from as many as 80 companies went into the plane, which has a 208-foot-wide wingspan, and yet at 3,527 pounds, weighs only as much as the average car.
The lightness of the plane and its great width require a soft touch at the controls. The pilots must act with deliberation and under no circumstances can they overcorrect.
One of the beauties of recording modern adventures is that, in many cases, a journalist can communicate with the explorer in real time. So it was on June 13, that Risk & Insurance® through its relationship with Swiss Re, was given the opportunity to connect by telephone via satellite with Borschberg as he flew the Solar Impulse from St. Louis to Cincinnati.
“What is interesting about the plane is that you discover a whole new way of flying,” said Borschberg, who despite long hours at the controls of the single-passenger plane sounded relaxed and happy.
The plane is equipped with four brushless motors and is powered by more than 11,500 solar cells on its wingspan and horizontal stabilizer. It cruises at around 40 mph, which gives the pilots plenty of time for reflection.
“This is an airplane where duration is not a problem,” Borschberg said. “Of course, we fly at low speed but we can fly day and night; there are no limits,” he said.
“So time is not an issue anymore and you can enjoy what you do. We are not in a hurry. A day like today is truly an experience. It is a possibility to enjoy each moment and to be present in each moment,” he said.
As he flew on June 13, Borschberg enjoyed good flying conditions, with relatively clear skies and manageable winds. One of the purposes of the United States flight was to test the plane and its support team in different weather conditions.
Earlier, as the team prepared to fly to St. Louis, the convergence of an increasingly volatile climate driven by a warming planet collided with the ambitions of this Swiss project dedicated to the promise of renewable energy.
On May 31, the airplane hangar in St. Louis that had been tapped to serve as the temporary home of HB-SIA was damaged by a tornado. The Solar Impulse team adjusted, inflating a temporary hangar that stored the plane snugly.
“That was one of the goals of the flight here across America … to be exposed to different weather systems, different conditions, from the ones that we experienced in Europe and North Africa already, so that was part of the training,” Borschberg said.
The team behind this record-breaking flight is an impressive and well-qualified one. Borschberg served as a Swiss fighter pilot for more than 20 years. In addition, he earned a Master’s in Management Science from the Sloan School at
MIT and has been involved in numerous aviation start-ups.
Piccard, who comes from a family of scientists and adventurers, gained fame as the winner of the Chrysler Challenge, the first transatlantic balloon race in 1992. He built on that feat by being the first person to pilot a balloon around the world in 1999. Piccard, chairman of the Solar Impulse project, began thinking about a solar-powered plane in 2003, but he needed a lot of help to see his dream realized.
Major corporate partners on the project are Frankfurt, Germany-based Deutsche Bank, the Belgian chemical company Solvay S.A., Swiss watchmaker Omega S.A. and the Swiss elevator maker Schindler.
Additional corporate partners include Swiss Re, Bayer, Swisscom and Altran, but there are more than 80 companies associated with the project. That’s in addition to a team of scientists and engineers based at the École Polytechnique Fédérale de Lausanne in Switzerland.
Apart from the tornado that trounced the hangar in St. Louis, the trip across the United States was an unqualified success.
“Touch wood, cross my fingers but the airplane is doing great,” Borschberg said.
“The solar technology is something which is fully reliable. You cannot wear this out … it lasts,” he said.
“Electric motors also have few moving parts, so that is a big, big advantage. They function at low temperatures, so you don’t have the thermal shock that you have with other technologies.”
In its brief life, Solar Impulse already possesses several aeronautical records for a solar plane, including an absolute height of 30,300 feet and duration of flight at 26 hours, 10 minutes and 19 seconds.
Both Borschberg and Piccard are well-seasoned pilots, which is an advantage because the physical demands of flying Solar Impulse are considerable.
The plane can only carry one person, so there is no one to relieve the pilot, even as he stays at the controls for 24 hours or more at a time.
For Borschberg, the sheer joy, not only of flying itself but of being a pilot on this particular project are more than enough to carry him along.
“Of course Bertrand and myself, we are really passionate about the work we are doing. We are passionate about flying and when you truly like what you are doing, you have a different kind of energy,” he said.
“Second, we are carried by the potential of this airplane and also by the ideal that is around that,” he said.
“I think the other part, of course, is that flying is a wonderful way to look at the earth and see the beauty of it. And so when you fly, you are captivated by that.
“It can be by day, it can be by night. It can be at sunset, it can be at sunrise, so all of this makes the trip truly memorable.”
Raining Down Destruction
When the asteroid strikes earth’s atmosphere, it is traveling at approximately 56,000 mph. At 50 meters to 60 meters wide, it is not large enough to wipe out humanity or irrevocably alter the tilt of the Earth’s axis or its orbit. But it’s going to do plenty of damage, particularly because of where it is headed: right at New York City. The asteroid, made of rock not too dissimilar from the rocks found on Earth, begins to break up nearly 200,000 feet in the atmosphere. About three miles up, or 18,800 feet, the projectile bursts into a cloud of fragments.
When it does that, it releases the power of 1,000 A-bombs — 10 megatons of TNT.
On the ground, the sound of the explosion reaches 105 decibels, enough to cause people to cover their ears in pain. That is, if the explosion’s incendiary heat and blast wave with its 500 mph winds don’t reach them first.
For residents of the metro area about 25 miles from the detonation site, the fireball looks like a second sun in the sky. The pressure from the explosion reaches them with 70 mph winds, though, wreaking havoc with homes and small business structures.
For about 19 miles surrounding the blast site, the fireball inflicts third-degree burns and ignites clothes.
Within 10 miles — reaching into the Bronx to the northeast, Brooklyn to the south and into Queens to the west — the blast wave reaches even higher pressure. That level of pressure is enough to generate wind speeds of a Cat-5 hurricane, strong enough to raze or severely damage factories, offices and residences.
The air is filled with glass, bricks and jagged concrete, and those half of the Outer Borough residents who do not die are surely injured.
For those within 2.5 miles of the blast, the news is worse. About 17.6 seconds after the explosion, come those 500+ mph winds — arriving faster than the speed of sound. The effects of this phenomenon are not for the faint of heart to consider, but take the worst tornado stories imaginable, multiply by two, and overlay them across almost all of Manhattan.
The force tears already scorched flesh off bones and limbs from bodies. Windows and walls of buildings implode. Multistory, reinforced concrete buildings collapse. Nothing is left of wood frame buildings. Highway truss bridges collapse. Nearly every tree in Central Park is leveled. And what falls down become missiles that kill and maim.
Perhaps luckiest are those closest to ground zero. Within the first second of the detonation, the heat energy within a mile turns flesh into steam, clean to the bone. Assume near total demolition at ground zero with fatalities as good as 100 percent.
Research for creating this description included information from the Earth Impacts Effect Program sponsored by the Imperial College London and Purdue University, It also used research provided by the Nuclear Weapon Archive. In its scale and effects, an asteroid impact would be similar to a fusion bomb.
But the most relevant source for the above scenario was a research report published in 2009 by RMS, the catastrophe modeling solutions provider.
The RMS report explored a 1908 event, the Tunguska asteroid impact in Russia at its 100th anniversary. In that strike, a mid-size asteroid (about 50 meters in diameter) exploded 3 to 5 miles above the Siberian forest. It leveled trees across 770 miles, and the pressure waves generated were measurable around the world.
Eyewitnesses were few and far between, but the few recorded for history including one person who experienced the event from 40 miles out and said, “at that moment, I became so hot that I couldn’t bear it, as if my shirt was on fire.”
The modeler asked: What if this occurred above New York City?
To calculate the probable maximum loss, RMS placed the proposed Tunguska damage footprint over Manhattan. It assumed a mean damage ratio, fatality rate and injury rate within the inner footprint of destruction to be 70 percent, 50 percent and 40 percent, respectively. In the outer footprint, they were 30 percent, 2 percent and 35 percent, respectively.
Then, RMS populated its map of Manhattan with datasets for population concentrations and insured assets. As much as $760 billion in property exposure and 3.61 million people exist within the outer swath of destruction, and with the inner ring of fire and death, $1.38 trillion and 6.25 million people.
According to RMS calculations, that translated to property losses of $1.19 trillion, 3.2 million deaths and 3.76 million injuries.
Such a biblical tally — and indeed, an asteroid impact may have caused the flood behind Noah’s ark — leads us to a question: Would property insurance companies even have to pay such a massive bill?
When a meteor exploded over Chelyabinsk, Russia, on Feb. 15, 2013, this question was raised. Michael Barry, vice president for media relations at the Insurance Information Institute, was quoted in Time.com as saying, at least with homeowners policies, “it’s got to be a direct hit” to trigger coverage. If an asteroid were to explode miles in the air and level everything below it, “the coverage is going to be open to interpretation.”
RMS conceded in its report that “it is unclear if, on any current contractual grounds, insurers would exclude damage caused by such a peril.”
Yet, the consensus appears to be that comprehensive commercial multiperil and all-risk policies ought to cover damage from an asteroid blast, unless specifically excluded.
“Generally, losses from the impact of meteorites or asteroids are covered in standard insurance policies. However, differences do exist from country to country,” was the simple statement put out by Munich Re after Chelyabinsk.
In Earth’s history, larger strikes have happened. The dinosaurs were made extinct by an asteroid that could be measures in kilometers, not meters.
If that were the case, “it’s a whole new world the next day,” said Lou Gritzo, vice president of research at insurer FM Global. It’s literally a whole new world.
That sort of impact would extend beyond the affected region and country, and have geopolitical security implications. Countries might cease to exist, let alone insurance companies.
A Tunguska-sized space rock could have ripple effects beyond the New York region, given the “brittle” economic situation in today’s over-connected financial and business worlds, Gritzo said. The word he used to describe such a threat is “reset” — to geopolitical and economic systems, but also to the well-being and daily lives of people on the East Coast and the insurance industry.
After a significant event like this, the insurance industry would be “really in ‘only the strong survive’ mode,” Gritzo said.
We can’t define “the strong” as those specifically prepared for an asteroid strike. As Robert Muir-Wood, chief research officer at RMS, explained, no one on the insurance side has a strategy to handle such an event at the moment.
Nor should they. It’s not practical to chase every Black Swan that flies under the sun.
If you’re running an insurance or reinsurance company, said Muir-Wood, you have to decide what is the risk threshold that you’re worried about and manage to that risk, so you will survive.
“Generally,” said Hélène Galy, head of proprietary modeling, managing director, Global Analytics, at Willis and the Willis Research Network, “when we provide catastrophe modeling results to clients, for example for a flood model, they are more interested in the low return periods, which should match their recent loss experience. Typical return periods are 100 year and 250 year.”
Gritzo at FM Global said that company underwrites to the 500-year risk level and advises its clients to protect their own properties to that 0.2 percent annual probability.
The odds of a Tunguska-like event striking a major urban area — let alone the major urban area in the United States — are very high.
The frequency of rocks this size hitting Earth in any one place, however, could fit within this 500-year window. According to the Asteroid Terrestrial-impact Last Alert System (ATLAS) at the Institute for Astronomy at the University of Hawaii — its purpose: to identify these rocks before they hit — “city killer” sized asteroids arrive once every few hundred years.
Given that location uncertainty but surety of occurrence, standard rules of catastrophe management apply for reinsurers and insurers. Prepare for the disaster that really scares you, and likely you will be relatively prepared when another disaster strikes.
One such rule of the “only the strong shall survive” school of thinking is diversity — away from insurance lines like property and away from concentrations of underwriting in any particular urban area or region.
“In this extreme scenario, losses would be so regional and total that a number of regional insurers would probably disappear. Reinsurers with enough diversification should survive,” said Galy.
She added, “insured losses would be dwarfed by economic losses, so it is the economy and civil society that would be most impacted.”
It would be a “reset” unlike anything we have seen.
“It would look a bit of a mess,” said Muir-Wood. The nearest historical equivalent would be the Tokyo earthquake in 1923, when the city burned and total insured losses were beyond insurance coverage.
The government then allowed insurers to pay back as much as they could without going under. In that way, it could be comparable to another recent Black Swan — the 2007-2008 financial crisis.
As long as it is still standing, the U.S. government would not sit by and let all the big insurance companies disappear, like the dinosaurs did.
Advocacy: The Impact of Continuous Triage
In the world of workers’ compensation, timing is everything. Many studies have shown that the earlier a workplace incident or injury is acted upon, the more successful the results*. However, there is further evidence indicating there is even more of an impact seen when a claim is not only filed promptly, but also effective triage is conducted and management of the claim takes place consistently through closure.
Typically, every program incorporates a form of early intervention. But then what? While it is common knowledge that early claims reporting and medical treatment are the most critical parts of a claim, if left alone after management, an injured worker could – and often does – fall through the cracks.
All Claims Paths are Not Created Equal
Even with early intervention and the best intentions of the adjuster, things can still go wrong. What if we could follow one injury down two paths, resulting in two entirely different outcomes? This case study illustrates the difference between two claims management processes – one of proactive, continuous claims triage and one of inactivity after initial intervention – and the impact, or lack thereof, it can have on the outcome of a claim. By addressing all indicators, effective triage can drastically change the trajectory of a claim.
While working at a factory, David, a 40-year-old employee, experienced sudden shoulder pain while lifting a heavy box. He reported the incident to his supervisor, who contacted their 24/7 triage call center to report the incident. After speaking with a triage nurse, the nurse recommended he go to an occupational medicine clinic for further evaluation, based on his self-reported symptoms of significant swelling, a lack of range of motion and a pain level described as greater than “8.”
The physician diagnosed David with a shoulder sprain and prescribed two weeks of rest, ice and prescription strength ibuprofen. He restricted David from any lifting over his head.
By all accounts, early intervention was working. Utilizing 24/7 nurse triage, there was no lag time between the incident and care. David received timely medical attention and had a treatment plan in place within one day.
A critical factor in any program is a return to work date, yet David was not given a return to work date from the physician at the occupational medicine clinic; therefore, no date was entered in the system.
One small, crucial detail needs just as much attention as when an incident is initially reported. What happens the third week of a claim is just as important as what happens on the day the injury occurs. Involvement with a claim must take place through claim closure and not just at initial triage.
The Same Old Story
After three weeks of physical therapy, no further medical interventions and a lack of communication from his adjuster, David returned to his physician complaining of continued pain. The physician encouraged him to continue physical therapy to improve his mobility and added an opioid prescription to help with his pain.
At home, with no return to work in sight, David became depressed and continued to experience pain in his shoulder. He scheduled an appointment with the physician months later, stating physical therapy was not helping. Since David’s pain had not subsided, the physician ordered an MRI, which came back negative, and wrote David a prescription for medication to manage his depression. The physician referred him to an orthopedic specialist and wrote him a new prescription for additional opioids to address his pain…
Costly medical interventions continued to accrue for the employer and the surmounting risk of the claim continued to go unmanaged. His claim was much more severe than anyone knew.
What if his injury had been managed?
A Model Example
Using a claims system that incorporated a predictive modeling rules engine, the adjuster was immediately prompted to retrieve a return to work date from the physician. Therefore, David’s file was flagged and submitted for a further level of nurse triage intervention and validation. A nurse contacted the physician and verified that there was no return to work date listed on the medical file because the physician’s initial assessment restricted David to no lifting.
As a result of these triage validations, further interventions were needed and a telephonic case manager was assigned to help coordinate care and pursue a proactive return to work plan. Working with the physical therapist and treating physician resulted in a change in David’s medication and a modified physical therapy regimen.
After a few weeks, David reported an improvement in his mobility and his pain level was a “3,” thus prompting the case manager’s request for a re-evaluation. After his assessment, the physician lifted the restriction, allowing David to lift 10 pounds overhead. With this revision, David was able to return to work at modified duty right away. Within six weeks he returned to full duty.
With access to all of the David’s data and a rules engine to keep adjusters on top of the claim, the medical interventions that were needed for his recovery were validated, therefore effectively managing his recovery by continuing to triage his claim. By coordinating care plans with the physician and the physical therapist, and involving a case manager early on, the active management of David’s claim enabled him to remain engaged in his recovery. There was no lapse in communication, treatment or activity.
After 24/7 nurse triage is conducted and an injured worker receives initial care, CorVel’s claims system, CareMC, conducts continuous triage of all data points collected at claim inception and throughout the life of a claim utilizing its integrated rules engine. Predictive indicators send alerts to prompt the adjuster to take action when needed until the claim is closed – not just at the beginning of the claim.
This predictive modeling tool flags potentially complex claims with the risk for high exposure, marking claims that need intervention so that CorVel can assign appropriate resources to mitigate risk.
Claims triage is constant – that is the necessary model. Even on an adjuster’s best day, humans aren’t perfect. A rules engine helps flag things that people can miss. A combination of predictive systems and human intervention ensures claims management is never stagnant – that there is no lapse in communication, activity or treatment. With an advocacy team in the form of an adjuster empowered by a powerful rules engine and a case manager looking out for the best care, injured employees remain engaged in their recovery. By perpetuating patient advocacy, continuous triage reduces claim severity and improves claim outcomes, returning injured workers to the workforce and reducing payors’ risk.