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By Dan Reynolds

In the insurance world, it was Arnold Stone, a veteran Travelers Cos. claims executive, who first got the chance to see what George Neale could do. In those days, back in 1978, Neale was fresh out of Duke University with a degree in economics.

These days we know Neale as the executive vice president and chief claims officer on the commercial side for Boston-based Liberty Mutual Insurance. Neale now oversees a department that has more than 5,000 people and which paid out more than $9 billion in claims between Nov. 1, 2011, and Oct. 31, 2012.

Neale, who was using analytics to manage the costs of workers' compensation long before it was fashionable, has made a reputation for himself as a calming presence in a world, commercial insurance claims resolution in particular, that is perhaps characterized by more agitation than is necessary.

"Sometimes we make insurance life or death," said Charlie Martin, a managing director and Casualty Consulting leader for Marsh in Norwalk, Conn.

"George takes that out of it, he quickly figures out what the problem is and identifies a solution and he does it in a very professional, calm manner," Martin said.

Natural talent is part of what makes Neale good at what he does. Having lots of experience is another reason.

It has been 35 years since Stone first saw Neale and since then, a lot of claims have passed under the bridge.

But back in 1978, Neale was just a young man looking to stave off the Carter recession with a stable job that gave him a car.

Stone spoke to Risk & InsuranceŽabout Neale from his home in Lake Wylie, S.C., which is right across the state line and about 20 minutes from downtown Charlotte, N.C.

Stone recalls that he was managing the claims operation in North Carolina for Travelers, and when he met Neale, immediately saw something special in him.

"He liked the business to start with," Stone said. "You have to like the insurance claims business, as you do in most professions," Stone said.

Neale recalls the meeting with Stone, with whom he still plays tennis and attends sporting events, as a lucky stroke, an introduction to a man who cared enough about a young professional to show him the ropes.

"I think the most important thing he did, when I was a 22-year-old kid working for him, was that he saw more things in me than I saw in myself," Neale said.

Stone chuckles at this.

"I feel more proud that he feels I had something to do with his career because he did that on his own," Stone said.

What the two men agree on is that Neale was a natural in the claims business almost from his first steps in it.

"One of the difficult things about claims, is that nobody goes to school to be a claims person," Neale said.

But in his own way, Neale, whose tennis partners call him "The Professor" for his cerebral approach to tennis, has been a student of the claims game.

Neale spent 19 years with Travelers, working his way up the ranks. When he departed, to take a job with Kemper, he was the youngest senior vice president in the history of the Hartford, Conn.-based company.

When he left Travelers, Neale went to work for Bob Lindemann, now president and chief operating officer of CNA Commercial, who at the time was trying to figure out how to improve Kemper's workers' compensation claims approach.

Stone remembers Neale as a young African-American man who wasn't afraid to travel into mostly white, sometimes overtly racist areas of North and South Carolina.

Lindemann remembers Neale as somebody who wasn't afraid to challenge the status quo at Kemper.

"We had a mindset in a pretty insular company that this is how we adjust claims," said Lindemann, describing the landscape at Kemper when Neale arrived there in 1997.

"George came in with 'How do we do this better?' and it was a pretty tough slog for George because he was a status quo breaker in an organization that fiercely protected the status quo," Lindemann said.

The workers' compensation liabilities at Kemper would eventually overwhelm the company. But at a company that needed some fixing, Lindemann recalls that Neale was always asking what he could do better, not looking for ways to pin blame on other people.

"Instead of George saying, 'It's not my fault that the underwriters are writing bad business,' he would say, 'What can the claims department do differently?" Lindemann said.

It was back then, some 15 years ago and way before it was popular, that Neale started using data and analytics to manage workers' compensation claims liability.

Neale, the Duke economics major, was also maturing as an insurance executive, looking at the entirety of the organization and how each department affected the other.

"Economics teaches you that everything you do has a cause and an effect," Neale said.

Lindemann said Neale used that knowledge to look at Kemper and its clients holistically.

"What I am particularly proud of George was that he marched from a claims leader to a business leader," Lindemann said.

"The Travelers years made me a very good claims person," Neale said. "But when I got to Kemper I became a really good insurance person."

Data and Liberty

Neale's work in data and analytics has advanced to the point where he is now working in an organization in Liberty Mutual that has invested a considerable amount of resources, that is, human talent and financial resources, into using data to manage claims outcomes in workers' compensation and other areas.

Flagging co-morbidities like obesity and diabetes, and an increasing national dependency on narcotic pain relievers, is just one of the measures that Neale's organization is using to get people back to work quicker and give them a better quality of life.

"We are in the business of saving lives," Neale said, quoting one of the physicians he works with at Liberty Mutual.

"It's not saving lives in the context of people dying. It's saving the quality of life. If you can get back to work, you can get back to normal activities," Neale said.

"A person who is on the couch all day dependent on narcotics, that is not a good life for that person," Neale said.

Neale's department is responsible for claims from policyholders with businesses from small through middle market and national accounts. And it is responsible for general liability, property and commercial auto, in addition to workers' compensation.

These days, according to Neale, there is no sweeping danger, like asbestos years ago, that is beleaguering claims managers.

Silica exposure was thought to be a risk but it didn't turn out to be that bad from a claims severity perspective.

Chinese drywall popped up a few years ago but hasn't been followed by anything particularly menacing.

Neale, like many others, told us that change must come to New York labor laws if contractors and their insurers hope to thrive doing business in the Empire State. Currently, broad judicial interpretations are allowing construction workplace injuries to result in general liability claims against the general contractor. This greatly impairs the "exclusive remedy" provision of workers' compensation coverage.

After Sandy Struck

His department negotiated the chaos of Superstorm Sandy in fine style, Neale said. That's because they had good advanced knowledge of the storm's path. With that knowledge, Neale and his team were able to craft a plan to ensure maximum mobility for claims adjusters in the field.

"A few days before the storm was to hit we got everyone on a conference call," Neale said. One of the goals of the call was to make sure that there were communication backups in place if electricity was lost.

Another precaution included hiring a tanker full of gas to make sure that adjusters' vehicles could stay fueled in the storm's aftermath.

All of these measures are in the service of having adjusters get to as many claimants as quickly as possible.

"There are certain things that you can't control but one of the things that you can control, on the front end, is knowing that people need to hear from you quickly," Neale said.

In the case of Superstorm Sandy, Neale reports that policyholders were reasonable, as long as they were contacted early and given clear expectations.

First Chair

Neale, the insurance man, has many sides. A natural on trumpet, he found himself playing alongside some legendary names in music as a younger man.

He is also a very good tennis player who has traded strokes with players with world rankings.

With youth orchestras and in playing with the Duke Jazz Ensemble, Neale played with the jazz trumpet great Dizzy Gillespie, and was once in an orchestra conducted by Aaron Copeland.

As a musician, Neale has played the Albert Hall and the Kennedy Center, the latter 10 times, he said.

The executive also cuts a trim figure in his shirt sleeves. Neale played competitive tennis after he left Duke and still manages to play a game of doubles three or four times per week.

For all his accomplishment in words and deeds, Neale retains a calmness in how he relates them.

Marsh's Martin said that, although Neale is technically strong, it's his style that carries the day.

"George's style is so effective," Martin said. "He is very calm and very cool and I don't mean that in a negative way," he said.

"He just has a calming effect, whatever the issue may be," Martin said.

The insurance industry, and we don't mean this in a negative way, has plenty of very bright people in it who express themselves with plenty of energy. Let's just say some of us can be a little aggressive at times.

Martin said Neale has plenty of responsibility, but isn't hitting you over the head with it.

"George has a big job at Liberty managing claims," Martin said. "And you will get people, I don't want to say that they are yellers and screamers, but you kind of know when their voice gets elevated or the tone of a letter," he said.

Having said that, Martin echoed CNA's Lindemann in saying that Neale has not been afraid to effect change in his new position.

Neale was named executive vice president and chief claims officer, Commercial Insurance at Liberty Mutual in July 2012.

"He is not afraid to make change," Martin said, "is not content with the status quo and is looking for continuous improvement."

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

March 1, 2013

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