2017 Teddy Award Winner

Advocacy Takes Off

For Delta Air Lines, putting employees first is the right thing to do for all company stakeholders.
By: | November 1, 2017 • 5 min read

It’s coming up on 90 years since Delta Air Lines made its first passenger flight.

Delta founder C.E. Woolman, considered a visionary by many, keenly understood how employee satisfaction has a direct bearing on company success.

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“It is the initiative, the personal attitudes and the motivations of our people as they approach their daily work upon which we rely for acceptance, for growth, and for survival,” said Woolman.

No doubt he would be pleased that Delta is a winner of the 2017 Theodore Roosevelt Workers’ Compensation and Disability Management Award — an honor bestowed in large part due to the company’s embrace of his founding philosophy, that Delta employees’ are the number one asset to the organization.

Headquartered in Atlanta, Delta operates a mainline fleet of more than 800 aircraft, offering service to 335 destinations in 62 countries on six continents, serving more than 180 million customers each year.

All of that rests on the shoulders of 85,000-plus employees worldwide who are exposed to a broad spectrum of workplace risks, from moving heavy cargo to serving passengers in the midst of turbulence. Caring for those workers is no small endeavor.

A 2013 shift toward an employee advocacy model for disability and leave management was a game-changer for Delta. Early success convinced the company it was the right way to go.

In 2015, the company moved to an integrated absence management program for all lines, including workers’ compensation, administered by a single TPA (Sedgwick) to further improve the employee experience.

Full Integration

Chris Collins, Delta’s vice president, global human resources services, championed the move to a single-source vendor. His goal: To reduce the frustration and duplicated processes that an employee experiences when navigating through the various programs at Delta after being injured on the job.

“We were looking for a single vendor source — a majority of the disability programs are unbundled,” explained Collins. “We couldn’t do that; it wasn’t working for us because of the way we pay the disability claims.

Chris Collins, VP Global HR Services, Delta Air Lines

“We needed it all with one vendor so that we didn’t have competing systems and competing vendors that don’t communicate well with each other.”

More than 110,000 claims were transitioned into the system, along with a staggering 5 million documents. All things considered, said Collins, the process went smoothly, allowing Delta to streamline the program and reduce duplicated redundant steps in the process.

“We reviewed and changed processes that tended to be redundant and cumbersome for the employee to manage through when a work comp injury was filed. Delta’s disability and leave benefits run concurrent when a work comp injury occurs,” said Susan Emerson, general manager, claims management, disability, leave and workers’ compensation claims.

Delta sees solid results resulting from the integrated programs. Since the move to an integrated model in 2015, Delta’s claims program has maintained an average closing ratio of 114 percent, exceeding expectations.

Of course, the most gratifying achievement is the improved employee experience with the claims process. The 2017 employee satisfaction surveys provide good comments and accolades from employees for the improved process and ease of claim handling.

“Delta Air Lines strongly embraces employee advocacy and this drives everything we do from a claims perspective,” said Lynn Williams, managing director with Sedgwick.

“We were looking for a single vendor source — a majority of the disability programs are unbundled. We needed it all with one vendor so that we didn’t have competing systems and competing vendors that don’t communicate well with each other.” — Chris Collins, vice president, global human resources services, Delta Air Lines

“Whether addressing occupational or non-occupational incidents … we all become advocates for their employees to ensure their recovery and return to a productive life.”

To Emerson, the employee advocacy model is a matter of common sense. The strategy streamlines the claim process, making it more efficient and smooth for employees.

Employee advocacy starts by adding more user-friendly language to explain benefits and the process — and removes cumbersome insurance terminology and technical terms. Being injured or ill is enough of a challenge in itself. Employees don’t need the added burden of understanding insurance and technical terminology, she said.

Susan Emerson, general manager, claims management, disability, leave and workers’ compensation claims, Delta

Additionally, Delta works with its TPA to integrate convenient offerings into the claim process. This includes direct deposit for payments to the employee (for lost wage replacement benefits, as well as reimbursement for other expenses such as mileage or out of pocket medical expenses), access to highly-rated physicians in the medical management network, a complex pharmacy review program, nurse triage, telephonic and field nurse case management services.

Emerson said she’s aware of those who perceive employee advocacy as soft and assume it may not be the best approach for some employers. “We see eyebrows raised a lot,” she said. “But Delta’s success follows that of other large employers who take a similar approach — including Disney, Safeway and industry peer Southwest Airlines. We decided ‘Stop the grinding;’ all it does is cause a lot of frustration in the process, and your employees are less apt to be favorable to your program.”

For workers’ compensation cases with a disability and leave component, the workers’ comp examiner is the single point of contact for employees and helps them navigate the disability and leave processes. This reduces phone calls and correspondence and improves payment accuracy.

Additionally, Delta created a concierge desk for its disability and leave of absence benefits. Employees can call to request assistance, ask questions or ask for direction at any time.

The integrated program focuses on assisting employees select top-tier providers or specialists immediately, ensuring that each claim is heading in the right direction from the start.

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“Sedgwick has a robust network — they really pay attention to the top-tier providers and their outcomes,” said Emerson. “They do what they’re supposed to do to help employees get well and return to work. To me, that’s the best approach.”

Emerson said that while Delta’s integrated program wouldn’t be the right fit for every company, it was the right move to make for the benefit of both employees and Delta.

“You make the investment to help the process flow more smoothly for all parties involved.” &

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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 mkerr@lrp.com

More from Risk & Insurance

More from Risk & Insurance

Insurtech

Kiss Your Annual Renewal Goodbye; On-Demand Insurance Challenges the Traditional Policy

Gig workers' unique insurance needs drive delivery of on-demand coverage.
By: | September 14, 2018 • 6 min read

The gig economy is growing. Nearly six million Americans, or 3.8 percent of the U.S. workforce, now have “contingent” work arrangements, with a further 10.6 million in categories such as independent contractors, on-call workers or temporary help agency staff and for-contract firms, often with well-known names such as Uber, Lyft and Airbnb.

Scott Walchek, founding chairman and CEO, Trōv

The number of Americans owning a drone is also increasing — one recent survey suggested as much as one in 12 of the population — sparking vigorous debate on how regulation should apply to where and when the devices operate.

Add to this other 21st century societal changes, such as consumers’ appetite for other electronic gadgets and the advent of autonomous vehicles. It’s clear that the cover offered by the annually renewable traditional insurance policy is often not fit for purpose. Helped by the sophistication of insurance technology, the response has been an expanding range of ‘on-demand’ covers.

The term ‘on-demand’ is open to various interpretations. For Scott Walchek, founding chairman and CEO of pioneering on-demand insurance platform Trōv, it’s about “giving people agency over the items they own and enabling them to turn on insurance cover whenever they want for whatever they want — often for just a single item.”

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“On-demand represents a whole new behavior and attitude towards insurance, which for years has very much been a case of ‘get it and forget it,’ ” said Walchek.

Trōv’s mobile app enables users to insure just a single item, such as a laptop, whenever they wish and to also select the period of cover required. When ready to buy insurance, they then snap a picture of the sales receipt or product code of the item they want covered.

Welcoming Trōv: A New On-Demand Arrival

While Walchek, who set up Trōv in 2012, stressed it’s a technology company and not an insurance company, it has attracted industry giants such as AXA and Munich Re as partners. Trōv began the U.S. roll-out of its on-demand personal property products this summer by launching in Arizona, having already established itself in Australia and the United Kingdom.

“Australia and the UK were great testing grounds, thanks to their single regulatory authorities,” said Walchek. “Trōv is already approved in 45 states, and we expect to complete the process in all by November.

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group.” – Scott Walchek, founding chairman and CEO, Trōv

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group,” he added.

“But a mass of tectonic societal shifts is also impacting older generations — on-demand cover fits the new ways in which they work, particularly the ‘untethered’ who aren’t always in the same workplace or using the same device. So we see on-demand going into societal lifestyle changes.”

Wooing Baby Boomers

In addition to its backing for Trōv, across the Atlantic, AXA has partnered with Insurtech start-up By Miles, launching a pay-as-you-go car insurance policy in the UK. The product is promoted as low-cost car insurance for drivers who travel no more than 140 miles per week, or 7,000 miles annually.

“Due to the growing need for these products, companies such as Marmalade — cover for learner drivers — and Cuvva — cover for part-time drivers — have also increased in popularity, and we expect to see more enter the market in the near future,” said AXA UK’s head of telematics, Katy Simpson.

Simpson confirmed that the new products’ initial appeal is to younger motorists, who are more regular users of new technology, while older drivers are warier about sharing too much personal information. However, she expects this to change as on-demand products become more prevalent.

“Looking at mileage-based insurance, such as By Miles specifically, it’s actually older generations who are most likely to save money, as the use of their vehicles tends to decline. Our job is therefore to not only create more customer-centric products but also highlight their benefits to everyone.”

Another Insurtech ready to partner with long-established names is New York-based Slice Labs, which in the UK is working with Legal & General to enter the homeshare insurance market, recently announcing that XL Catlin will use its insurance cloud services platform to create the world’s first on-demand cyber insurance solution.

“For our cyber product, we were looking for a partner on the fintech side, which dovetailed perfectly with what Slice was trying to do,” said John Coletti, head of XL Catlin’s cyber insurance team.

“The premise of selling cyber insurance to small businesses needs a platform such as that provided by Slice — we can get to customers in a discrete, seamless manner, and the partnership offers potential to open up other products.”

Slice Labs’ CEO Tim Attia added: “You can roll up on-demand cover in many different areas, ranging from contract workers to vacation rentals.

“The next leap forward will be provided by the new economy, which will create a range of new risks for on-demand insurance to respond to. McKinsey forecasts that by 2025, ecosystems will account for 30 percent of global premium revenue.

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“When you’re a start-up, you can innovate and question long-held assumptions, but you don’t have the scale that an insurer can provide,” said Attia. “Our platform works well in getting new products out to the market and is scalable.”

Slice Labs is now reviewing the emerging markets, which aren’t hampered by “old, outdated infrastructures,” and plans to test the water via a hackathon in southeast Asia.

Collaboration Vs Competition

Insurtech-insurer collaborations suggest that the industry noted the banking sector’s experience, which names the tech disruptors before deciding partnerships, made greater sense commercially.

“It’s an interesting correlation,” said Slice’s managing director for marketing, Emily Kosick.

“I believe the trend worth calling out is that the window for insurers to innovate is much shorter, thanks to the banking sector’s efforts to offer omni-channel banking, incorporating mobile devices and, more recently, intelligent assistants like Alexa for personal banking.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.”

As with fintechs in banking, Insurtechs initially focused on the retail segment, with 75 percent of business in personal lines and the remainder in the commercial segment.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.” — Emily Kosick, managing director, marketing, Slice

Those proportions may be set to change, with innovations such as digital commercial insurance brokerage Embroker’s recent launch of the first digital D&O liability insurance policy, designed for venture capital-backed tech start-ups and reinsured by Munich Re.

Embroker said coverage that formerly took weeks to obtain is now available instantly.

“We focus on three main issues in developing new digital business — what is the customer’s pain point, what is the expense ratio and does it lend itself to algorithmic underwriting?” said CEO Matt Miller. “Workers’ compensation is another obvious class of insurance that can benefit from this approach.”

Jason Griswold, co-founder and chief operating officer of Insurtech REIN, highlighted further opportunities: “I’d add a third category to personal and business lines and that’s business-to-business-to-consumer. It’s there we see the biggest opportunities for partnering with major ecosystems generating large numbers of insureds and also big volumes of data.”

For now, insurers are accommodating Insurtech disruption. Will that change?

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“Insurtechs have focused on products that regulators can understand easily and for which there is clear existing legislation, with consumer protection and insurer solvency the two issues of paramount importance,” noted Shawn Hanson, litigation partner at law firm Akin Gump.

“In time, we could see the disruptors partner with reinsurers rather than primary carriers. Another possibility is the likes of Amazon, Alphabet, Facebook and Apple, with their massive balance sheets, deciding to link up with a reinsurer,” he said.

“You can imagine one of them finding a good Insurtech and buying it, much as Amazon’s purchase of Whole Foods gave it entry into the retail sector.” &

Graham Buck is a UK-based writer and has contributed to Risk & Insurance® since 1998. He can be reached at riskletters.com.