2016 NWCDC

The Claims Experience, Reimagined

For Disney's Tim East, the way forward is to change the way we think about — and talk about — workers' compensation.
By: | November 30, 2016 • 3 min read

Fast approaching its centennial anniversary, The Walt Disney Co. witnessed an extraordinary amount of change, with more dips and twists than any of its own amusement park rides.

Tim East, a director of corporate risk management for the company, has been on that ride with Disney for more than four decades. He says it boils down to three things: Change is going to come at us. Change is hard. But, ultimately, change is good.

“Change is going to be an unrelenting force,” East said on Wednesday in the opening keynote address of the 25th National Workers’ Compensation and Disability Conference® & Expo in New Orleans.

It requires the workers’ comp industry to adapt, and to make a solid commitment to continuous improvement, he said.

The change can begin with language.

“Dairy products and chopped meat go through processes. People should not be processed.” — Tim East, director of corporate risk management, The Walt Disney Co.

Employers have been advised for years to refer to their people as “injured workers” rather than claimants. But East took that concept further, noting that Disney refers to its claims adjusters as workers’ comp representatives.

“The worst thing we can call somebody is a loss adjuster,” he said, because it sends a message to injured workers that they’re just numbers in need of adjustment.

“The labels you give people reflect how you think about them,” said East.

But that point extends beyond people. The claims process, for instance, should be reframed as the claims experience, he suggested.

“Dairy products and chopped meat go through processes. People should not be processed,” said East.

It also shifts perceptions when employers stop talking about return to work, and start talking about “recovery while working.”

East went so far as to say that we should drop the term workers’ comp altogether, and start calling it worker recovery – an idea he credits to blogger Bob Wilson, president and CEO of WorkersCompensation.com.

If we make that change, said East, we shift the entire perception of the goal of workers’ comp, placing the emphasis where it more rightly belongs.

Walking the Advocacy Talk

East supports an advocacy-based claims model, with the goal of building trust and holding organizations accountable for results beyond cost containment.

“We’ve become so focused on red flags, that we can’t see the people behind the red flags – people that need our help,” East said.

Some in the industry might be surprised by other employee-focused recommendations East had to share, including eliminating unwarranted fraud investigation, clamping down on the overuse of utilization review, and engaging in fewer of what East calls “cheap denials” of claims.

He also advises employers to do everything within their power to make sure that injured workers have access to actual people who can answer their questions.

“Why is it so hard to talk to a human being in the workers’ comp industry?” he asked, noting that the No. 1 complaint he hears from union leaders is that injured workers can’t get to a real live person.

 

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

More from Risk & Insurance

More from Risk & Insurance

2018 Most Dangerous Emerging Risks

Emerging Multipliers

It’s not that these risks are new; it’s that they’re coming at you at a volume and rate you never imagined before.
By: | April 9, 2018 • 3 min read

Underwriters have plenty to worry about, but there is one word that perhaps rattles them more than any other word. That word is aggregation.

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Aggregation, in the transferred or covered risk usage, represents the multiplying potential of a risk. For examples, we can look back to the asbestos claims that did so much damage to Lloyds’ of London names and syndicates in the mid-1990s.

More recently, underwriters expressed fears about the aggregation of risk from lawsuits by football players at various levels of the sport. Players, from Pee Wee on up to the NFL, claim to have suffered irreversible brain damage from hits to the head.

That risk scenario has yet to fully play out — it will be decades in doing so — but it is already producing claims in the billions.

This year’s edition of our national-award winning coverage of the Most Dangerous Emerging Risks focuses on risks that have always existed. The emergent — and more dangerous — piece to the puzzle is that these risks are now super-charged with risk multipliers.

Take reputational risk, for example. Businesses and individuals that were sharply managed have always protected their reputations fiercely. In days past, a lapse in ethics or morals could be extremely damaging to one’s reputation, but it might take days, weeks, even years of work by newspaper reporters, idle gossips or political enemies to dig it out and make it public.

Brand new technologies, brand new commercial covers. It all works well; until it doesn’t.

These days, the speed at which Internet connectedness and social media can spread information makes reputational risk an existential threat. Information that can stop a glittering career dead in its tracks can be shared by millions with a casual, thoughtless tap or swipe on their smartphones.

Aggregation of uninsured risk is another area of focus of our Most Dangerous Emerging Risks (MDER) coverage.

The beauty of the insurance model is that the business expands to cover personal and commercial risks as the world expands. The more cars on the planet, the more car insurance to sell.

The more people, the more life insurance. Brand new technologies, brand new commercial covers. It all works well; until it doesn’t.

As Risk & Insurance® associate editor Michelle Kerr and her sources point out, growing populations and rising property values, combined with an increase in high-severity catastrophes, threaten to push the insurance coverage gap to critical levels.

This aggregation of uninsured value got a recent proof in CAT-filled 2017. The global tally for natural disaster losses in 2017 was $330 billion; 60 percent of it was uninsured.

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This uninsured gap threatens to place unsustainable pressure on public resources and hamstring society’s ability to respond to natural disasters, which show no sign of slowing down or tempering.

A related threat, the combination of a failing infrastructure and increasing storm severity, marks our third MDER. This MDER looks at the largely uninsurable risk of business interruption that results not from damage to your property or your suppliers’ property, but to publicly maintained infrastructure that provides ingress and egress to your property. It’s a danger coming into shape more and more frequently.

As always, our goal in writing about these threats is not to engage in fear mongering. It’s to initiate and expand a dialogue that can hopefully result in better planning and mitigation, saving the lives and limbs of businesses here and around the world.

2018 Most Dangerous Emerging Risks

Critical Coverage Gap

Growing populations and rising property values, combined with an increase in high-severity catastrophes, are pushing the insurance protection gap to a critical level.

Climate Change as a Business Interruption Multiplier

Crumbling roads and bridges isolate companies and trigger business interruption losses.

 

Reputation’s Existential Threat

Social media — the very tool used to connect people in an instant — can threaten a business’s reputation just as quickly.

 

AI as a Risk Multiplier

AI has potential, but it comes with risks. Mitigating these risks helps insurers and insureds alike, enabling advances in almost every field.

 

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