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Practice Leaders for Analytics and Outcomes
Broadspire Services Inc.
Atlanta

An Offering for Adjusters in the Real World

The breakthrough notion in e-Triage addresses the question inherent in all new occupational and nonoccupational disability claims--of all the new reports flooding in every day, which claims will require significant management.

The e-Triage system uses the knowledge of more than 700 research studies to create an evidence-based criteria for asking about psycho-social, family and work life issues as clinical matters.

These questions allow e-Triage to look at the whole claimant situation, not just the narrow range of information normally collected by claims systems.

As e-Triage guides claimants, providers and employers through the questions, it also evaluates, compares and scores the responses. By using drop-down boxes, radio buttons and other "point and click" devices to record answers to questions, e-Triage captures interview responses as data points and not as text boxes.

"To me, the breakthrough idea at e-Triage is to capture information in data points," said Gary Anderberg, practice leader for analytics and outcomes at Broadspire Services Inc., who helped develop the program. "In my estimation, text boxes are where vital information goes to die."

E-Triage allows the adjuster to gather more information in less time, follow up appropriately on responses to high-gain questions and evaluate the information systematically. The system then presents the adjuster with issues for possible investigation and specific interventions and follow-up questions.

"In effect, e-Triage takes the best objective information about the full range of the issues which impact recovery and return to work and incorporates these data into an easy to use application which allows even our newest adjusters to tap into the best way of conducting and evaluating interviews and marshaling claim management resources, and doing it consistently every day," Anderberg said.

E-Triage is now being used by Broadspire for many of its most important workers' compensation accounts to conduct the three-point contact and follow-up interventions.

Like any major application development, building e-Triage has been and continues to be a team effort. However, Gary Anderberg has pushed the sales process to drive application use and to find additional ways to employ e-Triage, internally and for external sales as well.

What sets e-Triage apart is that it is a new idea in the handling of disability claims because it takes the best objective information about the full range of issues which have an impact on recovery and return to work, and incorporates these data into an easy-to-use application.

In Gary Anderberg's view, "most people want to get back to work." One of the things e-Triage does to further that end is that all the data comes back to the adjuster at the same time.

"What I can take credit for is taking e-Triage from a bulky, 'Gee this is really nice' concept that doesn't work very well in the real world to something that adjusters can use smoothly as a normal extension of their work.

"That's where we're at now, the 2.1 stage," Anderberg said. "In the next couple of years, we plan to be at the 2.2 stage."

One of Anderberg's colleagues called him "definitely the most knowledgeable person I've ever met working in the risk management area.

"Not only does he have a great grasp of claims and operations, but he's also very intellectual and is terrific with analyzing. He's great at not taking anything at face value, but instead looking deeply into things."

--Steve Yahn

President
ACE Westchester Environmental
Roswell, Ga.

Assistant Vice President
ACE Westchester Environmental
Roswell, Ga.

The Roswell Environment

Over the past year, ACE Westchester Environmental introduced its ACE hazmat policy, which provides coverage and services for hazardous materials and hazardous waste transporters.

This policy meets the stringent requirements of transporters subject to the Motor Carrier Act of 1980. Under this law, transporters of certain kinds of waste or hazardous materials are held to a higher standard of financial responsibility than the average nonhazardous materials transporter.

The regulation provides a guarantee that in the event of inadvertent damage to the environment, the insurance carrier would pay the loss--whether or not there was actual coverage of such an event. This regulatory requirement creates a specialized insurance market designed to insure the financial responsibility requirements for hazardous waste or hazardous materials transporters.

Against this backdrop, the ACE Westchester hazmat policy was developed to provide coverage for this specific segment of the trucking industry that historically has had difficulty in finding appropriate coverage.

To create this policy, Barbara Deas, president of ACE Westchester Environmental in Roswell, Ga., relied on her decades of underwriting experience that included hazmat transportation to search for a partner. She eventually found Roger Murphy, assistant vice president of ACE Westchester Environmental, who has 17 years of trucking and hazmat experience.

An "auto" underwriter could have been utilized and a basic underwriting and policy issuance implemented, but by itself that approach would not have added any value for the customer or protection for the insurance company.

Key features of the ACE hazmat policy are:

-- The policy provides coverage with a financially strong A+ rated carrier, which is exceptional in this financially stressed marketplace.

-- The policy provides broadened pollution coverage. This broadened coverage negates the reimbursement clause found in the financial responsibility form that must be filed with these types of policies. As a result, coverage is provided for environmental liabilities arising from the insureds' transportation operation and the regulations under which they operate.

-- ACE Westchester offers value-added services such as a 24-hour claims hotline, and an emergency response team, which provides specialized services in the event of an environmental accident or event. The policy also provides a library of training materials and loss control services.

These services were put in place prior to the initial announcement of the product line.

The purchase of proper coverage for a fleet comes with an evaluation from ACE's top industry analysts. Risk analysis and identification of potential weaknesses or cost savings are provided by trained professionals. The recommendations for savings through applying deductibles, training and improvement on physical controls are all part of the analysis.

As an example, the financial impact of identifying and strengthening procedures in driver training or vehicle maintenance may be immediately quantified through a decrease in claims activity.

In addition, proper claims handling of covered losses may facilitate a timely return to service for the damaged vehicle, allowing the insurance to meet the owner's contractual requirements with the least amount of interruption.

One insurance executive who has known Deas for 20 years said of her: "As she has climbed the ladder, she has seen the good, the bad and the ugly and she has incorporated that knowledge into her leadership skills." Another executive said, "Her strong negotiating skills lead her to create mutually satisfactory solutions when she is in a bargaining situation."

As for Roger Murphy, he is known for his ability to determine risks very quickly and "provide the right products to those risks," said one broker who has worked with him for 17 years.

"He is very easy to work with because he knows what he wants to write," this broker said.

--Steve Yahn

National Practice Leader, Business Analytics
Marsh
New York

The IDEAL Model and the Model IDEAL

For several years, the board of directors at an electric supply provider had been bringing pressure on the company's manager of corporate insurance to find a better directors' and officers' (D&O) policy. The goal for the manager was to find a tool to help him evaluate one D&O policy from another.

The manager finally found one: Marsh's IDEAL (Identity Damages Evaluate and Assess Limits), a new severity analysis model that provides decision evaluating support to clients when they are evaluating the structure of their D&O programs.

"My board couldn't be happier," the corporate insurance manager said. "We're finally getting accurate information on the right amount of D&O coverage we should carry. Marsh has given our directors the comfort that we will be covered on 93 percent of the potential claims that might be brought against us. That is a significantly higher rate than anything we have seen."

The insurance manager also had high praise for the Marsh team's presentation.

"The presentation they gave was easy to understand despite the complexity of the subject," he said.

The driving force behind IDEAL at Marsh is Ben Fidlow, national practice leader of Marsh Business Analytics in New York.

This new innovation gives explicit statistically derived severity figures for a potential D&O securities class-action suit.

This proactive analysis tool quantifies the full range of outcomes for a potential suit, he said. Many clients relied on benchmarking in the past (the electrical supply company was one of them).

"Ben is particularly good at making information digestible to the layman," one of Fidlow's colleagues said.

"After he finished all the scrubbing and background work, he made IDEAL very easy for people at Marsh to work with."

IDEAL requires a great deal of research and analysis, whereas the previous tool was more of a retrospective analysis for certain explicit market capitalization drops. IDEAL gives the projected range of settlement outcomes, helping clients make more educated decisions.

Directors and officers at publicly traded companies have historically faced a variety of exposures for which they purchase D&O coverage--derivative actions, regulatory proceedings, single shareholder actions, customer and competitor claims--but the biggest exposure for directors and officers is securities class-action litigation.

Shortly after Fidlow joined Marsh in 2008, he reviewed the analytical capabilities in place within several Marsh practices, looking for ways to upgrade and enhance them.

In early 2009, Ben began working with Tripp Sheehan of Marsh FINPRO on a solution for securities class-action litigation exposure. Soon Greg Spore of Marsh FINPRO joined the team, and later Stephen Guijarro of Marsh Business Analytics became part of the effort.

After an eight-month development process, the result has been the creation of a product that uses actuarial and statistical regression techniques to provide clients and prospects with a full distribution of securities class-action settlement amounts--including average, median and worst-case values--using client-specific independent variables such as market capitalization, industry sector, price/earnings ratio and total assets.

IDEAL is built on two databases. The first is Capital IQ's database of companies traded on the U.S. National Stock Exchange. The second is Advisen's database of 1,800 securities class-action settlements. (Capital IQ is a division of Standard & Poor's and Advisen provides information and analytics to the commercial insurance market.)

Introduced in January, Marsh runs about 100 IDEAL reports for its clients each month, with more asking for it during D&O conversations and reviews.

At Marsh, IDEAL is used to assist all publicly traded D&O brokerage clients.

--Steve Yahn

Vice President, Manager of Enterprise Learning
FM Global
Johnston, R.I.

A New Training Direction

Talk about thinking and acting outside the box.

When Karen A. Freedman, vice president, manager of enterprise learning with FM Global in Johnston, R.I., became manager of client training at the carrier in 2005, plans were already under way to develop the company's first client online training course. But plans called for the course to be delivered via DVD.

"Within my first two months on the job, I made two important decisions that have made a world of difference," Freedman said.

First, she changed the design of the program from linear to modular. The original course was designed so that users had to go through it from beginning to end, one screen at a time.

"I changed that to modular so that users could pick and choose what parts they wanted to view," Freedman said. "For many, they've completed the entire course. For others, they've used parts of the course as a refresher," she said. "They can quickly go in and find what they needed, which I call 'fingertip learning.' "

The second major decision Freedman made was to deliver the course through a dedicated, online site instead on a DVD.

"Both of these decisions added several months to the original project plan and also required more of a financial investment," Freedman said. "I knew it was the right thing to do, but needed to get buy-in from senior management. This was the first time FM Global had ever done something like this.

"At the same time I became manager of client training, Chris Johnson became senior vice president of enterprise learning," Freedman said. "Chris has always empowered me to make decisions that make sense and encouraged me to take risks. This was a risk for us--we didn't know for sure if clients would want this kind of training and whether our investment would pay off, but Chris was willing to take that risk with me."

For Freedman, making the decision to create a dedicated site for the online training was an easy one.

There were two main drivers for this, she said. It would allow FM Global to easily track who's taking the training, what parts of the training are most popular and be able to see real-time evaluations from users.

And Freedman and her team could easily keep their courses up-to-date. "Once something is burned to DVD, it almost immediately becomes out of date," Freedman said. "Plus, we'd have to track who had the DVDs and send new ones out to them, which would be a big administrative burden."

Freedman's first big operational decision was estimating how many clients would take the course.

"We had to estimate how many clients would take the course because we would pay per user," she said. "I chose 1,500, not knowing whether clients would really see value in the training. We exceeded that number in the first six months and now have more than 40,000 clients taking our training."

For many years, the training provided by FM Global, one of the world's largest commercial property insurers, focused on educating risk managers and operations managers, but now its online training focuses on front-line managers.

"These are the ones who can really make the difference between a fire or natural hazard event being a minor distraction or a major disaster," Freedman said. "If these people know the right thing to do at the right time, they truly are any company's best line of defense."

So why was Freedman chosen to lead this venture? Well, there's another story.

"Most senior managers in the company started their career at FM Global as a field engineer, but not me," Freedman said. "I was an English major and started at FM Global as a technical writer. Originally, they wanted an engineer to fill the client training manager role, but I convinced them that a different perspective could be helpful. They took a chance on me. I think that has to do with my enthusiasm, passion and open mind for new and creative ideas."

--Steve Yahn