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Point: Insurance and Risk Professionals Must Innovate
Not innovating isn't an option because the risks the industry faces are changing all the time.
By Dan Reynolds Innovation in risk management is constant and ongoing because the challenges that risk managers and their insurance partners face are constantly growing and changing.
The field of workers' compensation risk management, the largest chunk of the liability space, has undergone rapid and relentless change in the past five years. Pain medication use and misuse has exploded and the industry is in an innovation race to keep up. Vendors and carriers are going as fast as they can to bring to market the best models and methods that will be able to predict and manage the sort of injured worker who is likely to go off-track and create a claim of catastrophic size due to drug addiction. Global property risk management is also a space in which innovation is constant. Losses are occurring in places due to sources that have proved almost impossible to predict. Just as the industry was healing from the black eyes it received from hurricanes in 2005 and 2008, it found itself nursing bruised ribs from hail, tsunamis and tornadoes in 2011. Carriers and their clients aren't sitting on their hands and waiting for the next kick. They are putting real money and human talent into upgrading their ability to better understand the risk of tornado strikes in the U.S., and finding supply chain work-arounds to defend against the possibility that a typhoon or earthquake could severe supply chains in Asia or elsewhere. What about piracy in the horn of Africa? Innovators are finding ways to cut down frequency and severity of losses in that area. What about threats to computer networks bedeviling data storage? Well, there too, brokers and carriers are on the march with new products and risk management procedures. In the past four years, through our Risk Innovator? award program, we have seen professionals dial into the minutia of claims to help with everything from making public schools safer to creating simulators that help us get a better grip on the risks faced by long-haul truck drivers in South America. Innovation is all around us in the industry, and that's just part of the reason the industry survives, continues to lead, and remains so intellectually stimulating. DAN REYNOLDS is managing editor of Risk & Insurance®. He can be reached at riskletters@lrp.com. September 15, 2012 Copyright 2012© LRP Publications |
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May not be reproduced in any form without written permission.
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