Risk Insider: Jon Hall

A Rising Tide

By: | June 22, 2017 • 3 min read
Jonathan W. Hall is chief operating officer at FM Global. He oversees FM Global’s insurance operations and insurance staff functions, as well as the FM Global Resilience Index, a data driven resource that ranks the business resilience of 130 countries and regions. He can be reached at [email protected]

Earthquakes. Tropical cyclones. Snow. Flooding. Of all the natural hazards, studies show that flood is the most expensive. According to a report published by Aon Benfield in 2016, flooding was the costliest overall peril for the fourth consecutive year, at $62 billion.

Our world’s climate is changing, and some weather patterns are shifting. Due to the rise in world population, a rise in value at risk, increasing vulnerability due to globalization, and the rapid development of emerging markets which are less resilient, property loss from natural catastrophes has been, and will continue to be, ever more costly.

Many businesses are questioning if they’re doing enough to prepare for and adapt to these catastrophes. But just how should businesses plan to stem the rising tide? Of all the natural disaster losses, flood loss can be both the most predictable and the most preventable, so armed with clear information, businesses can take action to protect their value.

The most obvious action is to locate far from low-lying river, coastal or other flood-prone areas. If that isn’t possible, however, there are some proactive steps businesses can take to reduce their risk of potential flood damage and business interruption.

Among the preparations businesses can take to reduce the impact of flood is permanently moving all electrical, computer and telecommunications equipment safely out of low-lying interior and outside areas to settings above the flood level.

Flood preparation and awareness are key. Facilities located within high-hazard flood zones will eventually experience major flooding. In addition, FM Global has always recommended that clients not build in moderate-hazard (500-year flood-exposed) areas. In fact, in many areas around the world, building codes and regulations now call for critical infrastructure occupancies, such as utilities, emergency services, schools and hospitals, to build higher or protect against the 500-year flood level.

Nearly one in 10 commercial facilities are already located within a flood zone, and the best loss prevention practice for these properties is unremitting vigilance. While there is no way to prevent a flood from occurring, businesses can enhance their resilience by preparing for whatever precipitation extremes could occur. This can’t happen, however, without a contingency plan. Without a plan, buildings, machinery, data centers, transportation networks, supply chains, employees and customers are all at risk.

Facilities at risk for flooding must prepare well in advance to keep water out of business-critical areas to limit downtime and service interruptions. Smart businesses have a clear plan for what they will do when flooding is imminent, including choosing the best location for their flood barriers, sealing walls and floors, and providing flood pumps and other mitigation equipment that will help maintain business continuity.

Among the preparations businesses can take to reduce the impact of flood is permanently moving all electrical, computer and telecommunications equipment safely out of low-lying interior and outside areas to settings above the flood level.

FM Global’s recently released interactive Global Flood Map presents business executives with a powerful strategic planning tool, and risk managers with a way to address potential flood exposure around the world. Built using hydrology and hydraulic science, the Global Flood Map considers, among other factors, essential information like rainfall, evaporation, snowmelt and terrain. A version of the map is available for use by businesses and the public at no cost.

The map can help users determine whether their business locations reside in a potential flood zone by simply typing in physical addresses. The map identifies potential 100 year flood zones — highlighted in pink — and potential 500-year flood zones highlighted in yellow. The term 100-year flood exposure can be misleading. Over the 30-year life of a facility (or a risk manager’s career), there is a one in four chance your facility will flood if it is located in a 100-year flood zone, and a one in six chance if it is located in a 500-year zone.

Knowing their unique flood risk helps prepare businesses to implement the best solutions for when a disaster strikes, and gives them the opportunity to stem the rising tide.

More from Risk & Insurance

More from Risk & Insurance

2017 Teddy Awards

The Era of Engagement

The very best workers’ compensation programs are the ones where workers aren’t just the subject of the program, they’re a part of it.
By: | November 1, 2017 • 5 min read

Employee engagement, employee advocacy, employee participation — these are common threads running through the programs we honor this year in the 2017 Theodore Roosevelt Workers’ Compensation and Disability Management Awards, sponsored by PMA Companies.

A panel of judges — including workers’ comp executives who actively engage their own employees — selected this year’s winners on the basis of performance, sustainability, innovation and teamwork. The winners hail from different industries and regions, but all make people part of the solution to unique challenges.

Advertisement




Valley Health System is all-too keenly aware of the risk of violence in health care settings, running the gamut from disruptive patients to grieving, overwrought family members to mentally unstable active shooters.

Valley Health employs a proactive and comprehensive plan to respond to violent scenarios, involving its Code Atlas Team — 50 members of the clinical staff and security departments who undergo specialized training. Valley Health drills regularly, including intense annual active shooter drills that involve participation from local law enforcement.

The drills are unnerving for many, but the program is making a difference — the health system cut its workplace violence injuries in half in the course of just one year.

“We’re looking at patient safety and employee safety like never before,” said Barbara Schultz, director of employee health and wellness.

At Rochester Regional Health’s five hospitals and six long-term care facilities, a key loss driver was slips and falls. The system’s mandatory safety shoe program saw only moderate take-up, but the reason wasn’t clear.

Rather than force managers to write up non-compliant employees, senior manager of workers’ compensation and employee safety Monica Manske got proactive, using a survey as well as one-on-one communication to suss out the obstacles. After making changes based on the feedback, shoe compliance shot up from 35 percent to 85 percent, contributing to a 42 percent reduction in lost-time claims and a 46 percent reduction in injuries.

For the shoe program, as well as every RRH safety initiative, Manske’s team takes the same approach: engaging employees to teach and encourage safe behaviors rather than punishing them for lapses.

For some of this year’s Teddy winners, success was born of the company’s willingness to make dramatic program changes.

Advertisement




Delta Air Lines made two ambitious program changes since 2013. First it adopted an employee advocacy model for its disability and leave of absence programs. After tasting success, the company transitioned all lines including workers’ compensation to an integrated absence management program bundled under a single TPA.

While skeptics assume “employee advocacy” means more claims and higher costs, Delta answers with a reality that’s quite the opposite. A year after the transition, Delta reduced open claims from 3,479 to 1,367, with its total incurred amount decreased by $50.1 million — head and shoulders above its projected goals.

For the Massachusetts Port Authority, change meant ending the era of having a self-administered program and partnering with a TPA. It also meant switching from a guaranteed cost program to a self-insured program for a significant segment of its workforce.

Massport’s results make a great argument for embracing change: The organization saved $21 million over the past six years. Freeing up resources allowed Massport to increase focus on safety as well as medical management and chopped its medical costs per claim in half — even while allowing employees to choose their own health care providers.

Risk & Insurance® congratulates the 2017 Teddy Award winners and holds them in high esteem for their tireless commitment to a safe workforce that’s fully engaged in its own care. &

_______________________________________________________

More coverage of the 2017 Teddy Award Winners and Honorable Mentions:

Advocacy Takes Off: At Delta Air Lines, putting employees first is the right thing to do, for employees and employer alike.

 

Proactive Approach to Employee SafetyThe Valley Health System shifted its philosophy on workers’ compensation, putting employee and patient safety at the forefront.

 

Getting It Right: Better coordination of workers’ compensation risk management spelled success for the Massachusetts Port Authority.

 

Carrots: Not SticksAt Rochester Regional Health, the workers’ comp and safety team champion employee engagement and positive reinforcement.

 

Fit for Duty: Recognizing parallels between athletes and public safety officials, the city of Denver made tailored fitness training part of its safety plan.

 

Triage, Transparency and TeamworkWhen the City of Surprise, Ariz. got proactive about reining in its claims, it also took steps to get employees engaged in making things better for everyone.

A Lesson in Leadership: Shared responsibility, data analysis and a commitment to employees are the hallmarks of Benco Dental’s workers’ comp program.

 

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]