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By Dan Reynolds

Laura Collins' voice is so soft and gentle that when she speaks you can imagine her serving you tea.

Then there's Joe Wehrle who speaks with the steady self-containment of one who has made numerous public presentations in his life -- with authority, but without being overbearing. This is a man, who from the look and sound of things, has been getting big jobs done under pressure for decades, and long ago shelved his ego.

Wehrle is a decorated combat veteran who flew fighter bombers in Vietnam and rose to the rank of Lieutenant General in the United States Air Force before retiring in 2003.

As president and CEO of the National Insurance Crime Bureau, Wehrle took on the leadership of a massive task -- he wouldn't call it daunting, compared to, say, flying jets in battle -- the creation of a medical database that could turn out to be a key tool in the fight against medical billing fraud for property and casualty commercial insurers.

Collins is a former personal injury attorney who first started working as a workers' compensation administrator in the tiny state of Vermont.

Memories of grievous worker injuries she encountered as a personal injury attorney were part of her motivation in making available to employers "first reports of injury" that would help them better understand how worker injuries happen and give employers a leg up in preventing them.

Two very different people, two very different backgrounds, but both of them are winners of the Risk & Insurance® Risk InnovatorTM award in 2012.

This year's contest saw our editorial team arrive at 15 winning innovations. Ten of the Risk InnovatorTM awards went to individuals, four of them were shared between two people and one award was given to two teams.

As our editorial team reviewed this year's pool of applicants, keeping in mind the dual criteria of creativity and execution, we observed two marked trends.

Worker Safety

One trend is that many of the applications submitted were focused to one degree or another on worker safety. Perhaps no one should be surprised by this given that workers' compensation combined ratios nationally have reached mortifying places.

Fitch Ratings calculated an industry-wide combined ratio for workers' comp of about 117 for 2011 and many think that the sector could deliver an even worse number in 2012.

It's a tough call in many cases to make, but ours to make nevertheless, whether a safety program is simply a case of a safety prevention job well done, or represents an innovation.

In one case, that of Carrie Williams, the senior director of safety and management for ARAMARK Uniform Services, we admired her tenacity in digging into the details of bags used by her division's route sales reps. The bags were the source of a disturbing degree of severity in workplace injuries, with the reps picking up shoulder and wrist injuries from lugging around the heavy, cotton laundry bags.

Williams led the drive to design a new bag, dubbed the ErgoBag, which used a lighter material and was equipped with multiple handles. Feedback from the company's route sales reps has been uniformly positive.

A more technical safety solution was built on work done by the Bose Ride System Team. Renowned and successful for its work in audio, Bose transferred its experience in controlling motion and sound in audio to controlling vibration in tractor-trailer trucks.

What's now known as the Bose Ride System has resulted in 84 percent of surveyed professional truck drivers who use the system reporting improved comfort and 66 percent of them reporting less fatigue.

The aches and pains resulting from the constant vibration suffered by drivers using more traditional air-ride seats is a significant workers' compensation risk. According to U.S. Bureau of Labor Statistics for 2009, heavy truck and tractor-trailer truck drivers experienced a median 15 days away from work and high incidents of musculoskeletal disorders.

Fatigue brought on by all that shaking and vibration is an even greater risk. Tractor-trailer drivers who fall asleep at the wheel could end up -- and do end up -- in horrific, fatal accidents.

The Bose Ride System Team shares the Risk InnovatorTM award with the Chartis Science Team. Chartis is using its muscle in the market to bring the Bose solution to its transportation clients at a discount. We recognize Chartis for the company's foresight in seeing how broad a safety impact it can create by entering into this partnership with Bose.

There were seven additional Risk InnovatorTM winners who had worker safety close to the core of their innovation.

Devoted to Data

As dynamic and concentrated as the innovative work in worker safety is, there is another trend that we have observed, not only in our pool of Risk InnovatorTM applicants, but in the industry overall.

That trend is the amount of human talent and other resources that are being devoted to improving the industry's ability to use data and create more effective models.

The emergence last year of a new CAT property model, RMS Risklink version 11, caused consternation among carriers and their clients because it projected traditionally coastal storm risks further inland. Dissatisfied and unnerved by the increased risk valuations the model produced, the industry has been searching for alternatives.

"The RMS model changes last year produced heavy skepticism and prompted the market to take more responsibility for establishing their views of risk -- views which are only partly informed by commercial catastrophe models," Sherry Thomas, head of Catastrophe Management- Americas, Guy Carpenter & Co., told Risk & Insurance® earlier this year.

Glen Daraskevich, a senior vice president at Karen Clark & Co., got our attention with an innovation that doesn't seek to replace other commercial models, but rather, changes the application of them.

His Characteristic Events, or CE, seeks to reduce the volatility in the output of models from year to year and gives the insured a solid baseline from which to measure and manage risk. His modification establishes a probable maximum loss figure for a 1/100 event, like a hurricane in New York, for example, and establishes that as a consistent yardstick for underwriters and risk managers.

A carrier user said the modification gives them a much better idea of where they should write less business and where they should write more.

"The problem is not with the models themselves, but with the way they have been used," said Karen Clark, founder of the Boston-based company where Daraskevich works.

Towers Watson's Jeyraj (Jay) Vadiveloo got so excited about a data sampling technique he developed that a colleague heard him shouting into the phone when he had confirmed his discovery.

"He's got a touch of the nutty professor in him," said his colleague Steve Bochanski.

But Vadiveloo's innovation, Replicated Stratified Sampling, shows the potential to more swiftly and easily perform computations that will allow insurers to better analyze long-tail risks.

Stress testing, setting reserves for variable annuities, profitability analysis and capital modeling are all potential applications. The U.S. Patent and Trademark office this year issued Towers Watson two patents for Vadiveloo's innovation.

Vadiveloo, a native of Malaysia, earned his doctorate at the University of California at Berkeley and taught at Syracuse University and the University of Oklahoma before seeking a practical outlet for his gifts and knowledge in the actuarial sciences.

Insert Applause Here

From the high technology of Vadiveloo's work, to the bottom-line humanism of workers' compensation regulator Laura Collins, this year's Risk InnovatorTM winners demonstrate that this industry should applaud itself for the range of talent it employs and how passionately some of these professionals pursue what they do to make a living and to insure the livings and lives of others.

Some of these innovators did something you could almost classify as simple and obvious. Some of them did something highly technical and complex. But all of them achieved what they did because they saw a need and did something about it.

DAN REYNOLDS is managing editor of Risk & Insurance®. He can be reached at dreynolds@lrp.com

September 15, 2012

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