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2017 Power Broker

Ahead of the Curve

If a given industry sector is facing challenges, you can bet a 2017 Power Broker® is already well on their way to a solution.
By: | February 20, 2017 • 4 min read

Looking for the Power Broker Winners? Click Here.

Talk to a health care risk manager from the Midwest and they will tell you we face a crisis in mental health. In many areas of the country, access to quality psychological counseling is severely limited, with some patients needing to travel hundreds of miles to get help.

Telemedicine — a practitioner videoconferencing with a patient — is a viable solution, but regulation of telemedicine service providers is done on a state by state basis, making the arrangement of malpractice insurance very complicated.

Enter Larry Hansard, a Dallas-based regional managing director with Arthur J. Gallagher and a 2017 Power Broker® in the health care category.

Hansard developed a comprehensive telemedicine medical professional liability program that allows practitioners to provide telemedicine services not only anywhere in the United States but anywhere in the world.

Hansard not only saved the day for thousands of individuals in need of help, he saved the day for Doctor on Demand, a telemedicine startup that was struggling to obtain affordable insurance coverage.

“I don’t worry about insurance, he really owns the insurance process,” said Matt Scalo, head of finance at Doctor on Demand.

Everywhere we turned in judging the 2017 edition of Power Broker®, in this 12th consecutive installment of the program, we found insurance brokers like Hansard whose creativity, industry knowledge and customer service made a difference not only for their clients but for the economy at large.

“My approach to client service would best be described as creative customer concentration,” Hansard wrote in his 2017 Power Broker® application.

Aon’s Paul Finnett, a 2017 Power Broker® in the traditional energy category, services an oil and gas industry that is facing a severe downturn.

One of his offshore drilling clients was forced into Chapter 11 bankruptcy when idled rigs left it with a heavy debt load and sharply reduced revenues.

Finnett was able to create competition between U.S. and international insurance markets to get the bankrupt drilling company coverage as it scrambled to regain its financial footing. He got the company an additional $100 million in third-party liability coverage and achieved year-over-year premium savings of 40 percent.

“Truly understanding a client’s needs builds trust and respect,” Finnett wrote in his 2017 Power Broker® application.

“Once you have that trust and confidence from your client, you end up having a mutually beneficial long-term relationship and become a valued extension to their team,” wrote Finnett.

Yet another crisis produced yet another 2017 Power Broker®.  A budget crisis in the State of Illinois led to drastic cuts in education funding.

Arthur J. Gallagher’s Rockford, Ill.-based Area Senior Vice President Laurie Miller jumped into the fray and set up a health care insurance purchasing pool for financially struggling rural Illinois schools. What is now known as the Illinois Scholastic Cooperative launched in September 2016. The cooperative started with seven districts as members and now covers more than 1,000 employees.

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Other cash-strapped schools in Illinois are taking note of the savings gained by ISC members. Those amount to 5 percent overall in health care coverage premium costs. One rural district was able to avoid an 18 percent premium increase by joining the pool.

“We treat our clients like extended members of our family and we are relentless in pursuing claims resolution for people who often have no one to fight for them,” Miller wrote in her 2017 Power Broker® application.

Yet another 2017 Power Broker® stepped in to provide an insurance and risk mitigation solution to an industry badly in need of one.

Take the threat of a cyber attack and the risk that such an attack could derail a train and you have the makings of a catastrophic loss.

Tricia Piccinini, a Baltimore-based vice president of property brokerage with Aon, worked with markets in London, Bermuda and the U.S. to include coverage for collision and derailment in the case of a cyber event.

“I do not beat around the bush when it comes to my clients,” Piccinini said.

“I am always available to take a call, whether it is in the middle of the evening or vacation,” she wrote in her 2017 Power Broker® application.

Devoted customer service, dedication to learning as much as you can about the industry you serve, and driven creativity in finding solutions. Those are the hallmarks of a Power Broker® as expressed so clearly by Aon’s Tricia Piccinini.

Congratulations to her and to all of the 2017 Power Brokers. Click here to begin reading profiles of all of this year’s winners.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Pharma Under Fire

Opioids Give Rise to Liability Epidemic

Opioids were supposed to help. Instead, their addictive power harmed many, and calls for accountability are broadening.
By: | May 1, 2018 • 8 min read

The opioid epidemic devastated families and flattened entire communities.

The Yale School of Medicine estimates that deaths are nearly doubling annually: “Between 2015 and 2016, drug overdose deaths went from 33,095 to 59,000, the largest annual jump ever recorded in the United States. That number is expected to continue unabated for the next   several years.”

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That’s roughly 160 deaths every day — and it’s a count that’s increasing daily.

In addition to deaths, the number of Americans struggling with an opioid disorder disease (the official name for opioid addiction) is staggering.

The National Institute on Drug Abuse (NIDA) estimates that 2 million people in the United States suffer from substance use disorders related to prescription opioid pain relievers, and roughly one-third of those people will “graduate” to heroin addiction.

Conversely, 80 percent of heroin addicts became addicted to opioids after being prescribed opioids.

As if the human toll wasn’t devastating enough, NIDA estimates that addiction costs reach “$78.5 billion a year, including the costs of health care, lost productivity, addiction treatment, and criminal justice involvement.”

Shep Tapasak, managing principal, Integro Insurance Brokers

With numbers like that, families are not the only ones left picking up the pieces. Municipalities, states, and the federal government are strained with heavy demand for social services and crushing expenditures related to opioid addiction.

Despite the amount of money being spent, services are inadequate and too short in duration. Wait times are so long that some people literally die waiting.

Public sector leaders saw firsthand the range and potency of the epidemic, and were among the first to seek a legal reckoning with the manufacturers of  synthetic painkillers.

Seeking redress for their financial burden, some municipalities, states and the federal government filed lawsuits against big pharmaceutical companies and manufacturers. To date, there are more than 100 lawsuits on court dockets.

States such as Ohio, West Virginia, New Jersey, Pennsylvania and Arkansas have been hit hard by the epidemic. In Arkansas alone, 72 counties, 15 cities, and the state filed suit, naming 65 defendants. In Pennsylvania, 16 counties, Philadelphia, and Commonwealth officials have filed lawsuits.

Forty one states also have banded together to subpoena information from some drug manufacturers.

Pennsylvania’s Attorney General, Josh Shapiro, recently told reporters that the banded effort seeks to “change corporate behavior, so that the industry can no longer do what I think it’s been doing, which is turning a blind eye to the effects of dumping these drugs in the communities.”

The volume of legal actions is growing, and some of the Federal cases have been bound together in what is called multidistrict litigation (MDL). These cases will be heard by a judge in Ohio. Plaintiffs hope for a settlement that will provide funding to be used to help thwart the opioid epidemic.

“From a societal perspective, this is obviously a big and impactful issue,”  said Jim George,  a managing director and global claims head with Swiss Re Corporate Solutions. “A lot of people are suffering in connection with this, and it won’t go away anytime soon.

“Insurance, especially those in liability, will be addressing this for a long time. This has been building over five or six years, and we are just now seeing the beginning stages of liability suits.” 

Basis for Lawsuits

The lawsuits filed to date are based on allegations concerning: What pharma knew or didn’t know; what it should have known; failure to monitor size and frequency of opioid orders, misrepresentation in marketing about the addictive nature of opioids; and false financial disclosures.

Opioid manufacturers, distributors and large drugstore chains together represent a $13 billion-a-year industry, meaning the stakes are high, and the pockets deep. Many have compared these lawsuits to the tobacco suits of the ’90s.

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But even that comparison may pale. As difficult as it is to quit smoking, that process is less arduous than the excruciating and often impossible-to-overcome opioid addiction.

Francis Collins, a physician-geneticist who heads the National Institutes of Health, said in a recorded session with the Washington Post: “One really needs to understand the diabolical way that this particular set of compounds rewires the brain in order to appreciate how those who become addicted really are in a circumstance where they can no more [by their own free will] get rid of the addiction than they can get free of needing to eat or drink.”

“Pharma and its supply chain need to know that this is here now. It’s not emerging, it’s here, and it’s being tried. It is a present risk.” — Nancy Bewlay, global chief underwriting officer for casualty, XL Catlin

The addiction creates an absolutely compelling drive that will cause people to do things against any measure of good judgment, said Collins, but the need to do them is “overwhelming.”

Documented knowledge of that chemistry could be devastating to insureds.

“It’s about what big pharma knew — or should have known.  A key allegation is that opioids were aggressively marketed as the clear answer or miracle cure for pain,” said Shep Tapasak, managing principal, Integro Insurance Brokers.

These cases, Tapasak said, have the potential to be severe. “This type of litigation boils down to a “profits over people” strategy, which historically has resonated with juries.”

Broadening Liability

As suits progress, all sides will be waiting and watching to see what case law stems from them. In the meantime, insurance watchers are predicting that the scope of these suits will broaden to include other players in the supply chain including manufacturers, distribution services, retail pharmacies, hospitals, physician practices, clinics, clinical laboratories and marketing agencies.

Litigation is, to some extent, about who can pay. In these cases, there are several places along the distribution chain where plaintiffs will seek relief.

Nancy Bewlay, global chief underwriting officer for casualty, XL Catlin

Nancy Bewlay, XL Catlin’s global chief underwriting officer for casualty, said that insurers and their insureds need to pay close attention to this trend.

“Pharma and its supply chain need to know that this is here now. It’s not emerging, it’s here, and it’s being tried. It is a present risk,” she said.

“We, as insurers who identify emerging risks, have to communicate to clients. We like to be on the forefront and, if we can, positively influence the outcome for our clients in terms of getting ahead of their risks.”

In addition to all aspects of the distribution chain, plaintiffs could launch suits against directors and officers based on allegations that they are ultimately responsible for what the company knew or should have known, or that they misrepresented their products or signed off on misleading financial statements.

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Shareholders, too, could take aim at directors and officers for loss of profits or misleading statements related to litigation.

Civil litigation could pave the way, in some specific instances, for criminal charges. Mississippi Attorney General Jim Hood, who in 2015 became the first state attorney general to file suit against a prescription drug maker, has been quoted as saying that if evidence in civil suits points to criminal behavior, he won’t hesitate to file those charges as well.

Governing, a publication for municipalities and states, quoted Hood in late 2017 as saying, “If we get into those emails, and executives are in the chain knowing what they’ve unleashed on the American public, I’m going to kick it over to a criminal lawsuit. I’ve been to too many funerals.”

Insurers and insureds can act now to get ahead of this rising wave of liability.

It may be appropriate to conduct a review of policy underwriting and pricing. XL Catlin’s Bewlay said, “We are not writing as if everyone is a pharma manufacturer. Our perception of what is happening is that everyone is being held accountable as if they are the manufacturer.

“The reality is that when insurers look at the pharma industry and each part of the supply chain, including the pharma companies, those in the chain of distribution, transportation, sales, marketing and retail, there are different considerations and different liabilities for each. This could change the underwriting and affect pricing.”

Bewlay also suggests focusing on communications between claims teams and underwriters and keeping a strong line of communication open with insureds, too.

“We are here to partner with insureds, and we talk to them and advise them about this crisis. We encourage them to talk about it with their risk managers.”

Tapasak from Integro encourages insureds to educate themselves and be a part of the solution. “The laws are evolving,” he said. “Make absolutely certain you know your respective state laws. It’s not enough to know about the crisis, you must know the trends. Be part of the solution and get as much education as possible.

“Most states have ASHRM chapters that are helping their members to stay current on both passed and pending legislation. Health care facilities and providers want to do the right thing and get educated. And at the same time, there will likely be an uptick in frivolous claims, so it’s important to defend the claims that are defensible.”

Social Service Risk

In addition to supply chain concerns, insurers and insureds are concerned that even those whose mission it is to help could be at risk.

Hailed as a lifesaver, and approved by the Food and Drug Administration (FDA), the drug Naloxone, can be administered to someone who is overdosing on opioids.  Naloxone prevents overdose by blocking opioid receptor sites and reversing the effects of the overdose.

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Some industry experts are concerned that police and emergency responders could incur liability after administering Naloxone.

But according to the U.S. Department of Justice, “From a legal standpoint, it would be extremely difficult to win a lawsuit against an officer who administers Naloxone in good faith and in the course of employment. … Such immunity applies to … other professional responders.”

Especially hard hit are foster care agencies, both by increased child placements and stretched budgets. More details in our related coverage.

While the number of suits is growing and their aim broadening, experts think that some good will come of the litigation. Settlements will fund services for the addicted and opioid risk awareness is higher than ever. &

Mercedes Ott is managing editor of Risk & Insurance. She can be reached at [email protected]