2016 Risk All Star: Chauncey Fagler

An ERM Mantra

Patient, persevering and persistent. Chauncey Fagler, executive director of the Florida College System Risk Management Consortium, is all of those things.

Chauncey Fagler, executive director, Florida College System Risk Management Consortium

Chauncey Fagler, executive director, Florida College System Risk Management Consortium

Whether it’s spending $175,000 to audit property in an initiative that ended up saving consortium members $3 million each year in premium costs, or persuading more of the consortium’s 28 member colleges to participate in a health benefits program, Fagler is always searching for great risk management solutions.

Giving the college system “the best consortium” possible is his mantra, he said.

“Change is always hard. It’s just helping members to see that making changes will be of benefit to them and their colleges,” he said.

His most recent challenge was convincing more colleges to join with the 20 colleges already in the consortium’s health plan. That effort required multiple presentations to HR and business officers of the colleges as well as their boards of trustees.

Fagler is a “trusted adviser,” said Greg Ferguson, corporate account executive, Florida Blue (Blue Cross/Blue Shield).  “He leads them down the path to reason to make decisions for the right reasons,” he said.

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Fagler’s achievement in keeping consortium’s health care premium costs substantially lower than the market for more than 10 years was a key selling point.

“We have been very fortunate when you compare the consortium to the marketplace,” Fagler said.

He credits his team, the effectiveness of the consortium’s negotiating abilities, and the “outstanding job” that participating colleges do in communicating to employees about cost-savings activities. Two more colleges agreed to participate, resulting in a 30 percent increase in the number of employees protected by the consortium’s health benefits.

“Change is always hard. It’s just helping members to see that making changes will be of benefit to them and their colleges.” — Chauncey Fagler, executive director, Florida College System Risk Management Consortium

Matthew Snook, a partner at Mercer, said Fagler “has really developed and fleshed out the concept of enterprise risk management at the consortium. … Chauncey has a degree of credibility that has made it easier for his team to take this thing they have created and bring others into it,” he said.

“The more bodies they bring in, the more effective they are.”

Fagler’s leadership and problem-solving abilities were also needed a few years back when RMS modeling software changed the consortium’s 250-year probable maximum loss (PML) from $216 million to $436 million.

“That was a big challenge needing a solution,” he said.

Here’s how he found one:

The consortium hired an outside appraisal firm for $175,000 to identify all underwriting data for the covered buildings, which reduced the PML from $436 million to $244 million. Since then, the consortium has saved, on average, $3 million a year on its property program because of the accurate underwriting data.

“We are always asking, ‘Can we show you the benefits of being in the consortium?’ Once the colleges see the benefit to their bottom line, it makes financial sense to be a part of the consortium.” &

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AllStars2016v1oRisk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, perseverance and passion.

See the complete list of 2016 Risk All Stars.

More from Risk & Insurance

More from Risk & Insurance

Robotics Risk

Rise of the Cobots

Collaborative robots, known as cobots, are rapidly expanding in the workforce due to their versatility. But they bring with them liability concerns.
By: | May 2, 2017 • 5 min read

When the Stanford Shopping Center in Palo Alto hired mobile collaborative robots to bolster security patrols, the goal was to improve costs and safety.

Once the autonomous robotic guards took up their beats — bedecked with alarms, motion sensors, live video streaming and forensics capabilities — no one imagined what would happen next.

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For some reason,  a cobots’ sensors didn’t pick up the movement of a toddler on the sidewalk who was trying to play with the 5-foot-tall, egg-shaped figure.

The 300-pound robot was programmed to stop for shoppers, but it knocked down the child and then ran over his feet while his parents helplessly watched.

Engaged to help, this cobot instead did harm, yet the use of cobots is growing rapidly.

Cobots are the fastest growing segment of the robotics industry, which is projected to hit $135.4 billion in 2019, according to tech research firm IDC.

“Robots are embedding themselves more and more into our lives every day,” said Morgan Kyte, a senior vice president at Marsh.

“Collaborative robots have taken the robotics industry by storm over the past several years,” said Bob Doyle, director of communications at the Robotic Industries Association (RIA).

When traditional robots joined the U.S. workforce in the 1960s, they were often assigned one specific task and put to work safely away from humans in a fenced area.

Today, they are rapidly being deployed in the automotive, plastics, electronics assembly, machine tooling and health care industries due to their ability to function in tandem with human co-workers.

More than 24,000 robots valued at $1.3 billion were ordered from North American companies last year, according to the RIA.

Cobots Rapidly Gain Popularity

Cobots are cheaper, more versatile and lighter, and often have a faster return on investment compared to traditional robots. Some cobots even employ artificial intelligence (AI) so they can adapt to their environment, learn new tasks and improve on their skills.

Bob Doyle, director of communications, Robotic Industry Association

Their software is simple to program, so companies don’t need a computer programmer, called a robotic integrator, to come on site to tweak duties. Most employees can learn how to program them.

While the introduction of cobots into the workplace can bring great productivity gains, it also introduces risk mitigation challenges.

“Where does the problem lie when accidents happen and which insurance covers it?” asked attorney Garry Mathiason, co-chair of the robotics, AI and automation industry group at the law firm Littler Mendelson PC in San Francisco.

“Cobots are still machines and things can go awry in many ways,” Marsh’s Kyte said.

“The robot can fail. A subcomponent can fail. It can draw the wrong conclusions.”

If something goes amiss, exposure may fall to many different parties:  the manufacturer of the cobot, the software developer and/or the purchaser of the cobot, to name a few.

Is it a product defect? Was it an issue in the base code or in the design? Was something done in the cobot’s training? Was it user error?

“Cobots are still machines and things can go awry in many ways.” — Morgan Kyte, senior vice president, Marsh

Is it a workers’ compensation case or a liability issue?

“If you get injured in the workplace, there’s no debate as to liability,” Mathiason said.

But if the employee attributes the injury to a poorly designed or programmed machine and sues the manufacturer of the equipment, that’s not limited by workers’ comp, he added.

Garry Mathiason, co-chair, robotics, AI and automation industry group, Littler Mendelson PC

In the case of a worker killed by a cobot in Grand Rapids, Mich., in 2015, the worker’s spouse filed suit against five of the companies responsible for manufacturing the machine.

“It’s going to be unique each time,” Kyte said.

“The issue that keeps me awake at night is that people are so impressed with what a cobot can do, and so they ask it to do a task that it wasn’t meant to perform,” Mathiason said.

Privacy is another consideration.

If the cobot records what is happening around it, takes pictures of its environment and the people in it, an employee or customer might claim a privacy violation.

A public sign disclosing the cobot’s ability to record video or take pictures may be a simple solution. And yet, it is often overlooked, Mathiason said.

Growing Pains in the Industry

There are going to be growing pains as the industry blossoms in advance of any legal and regulatory systems, Mathiason said.

He suggests companies take several mitigation steps before introducing cobots to the workplace.

First, conduct a safety audit that specifically covers robotics. Make sure to properly investigate the use of the technology and consider all options. Run a pilot program to test it out.

Most importantly, he said, assign someone in the organization to get up to speed on the technology and then continuously follow it for updates and new uses.

The Robotics Industry Association has been working with the government to set up safety standards. One employee can join a cobot member association to receive the latest information on regulations.

“I think there’s a lot of confusion about this technology and people see so many things that could go wrong,” Mathiason said.

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“But if you handle it properly with the safety audit, the robotics audit, and pay attention to what the standards are, it’s going to be the opposite; there will be fewer problems.

“And you might even see in your experience rating that you are going to [get] a better price to the policy,” he added.

Without forethought, coverage may slip through the cracks. General liability, E&O, business interruption, personal injury, cyber and privacy claims can all be involved.

AIG’s Lexington Insurance introduced an insurance product in 2015 to address the gray areas cobots and robots create. The coverage brings together general and products liability, robotics errors and omissions, and risk management services, all three of which are tailored for the robotics industry. Minimum premium is $25,000.

Insurers are using lessons learned from the creation of cyber liability policies and are applying it to robotics coverage, Kyte said.

“The robotics industry has been very safe for the last 30 years,” RIA’s Doyle said. “It really does have a good track record and we want that to continue.” &

Juliann Walsh is a staff writer at Risk & Insurance. She can be reached at [email protected]