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2018 Power Broker

Education

No Problem Too Big

Charmaine Davis, CIC, CRM
Senior Vice President
Marsh, Washington, D.C.

Earthquakes on campus? No problem. Remote flights? No problem. High premiums? No problem. With Charmaine Davis, clients know the words “no problem” aren’t lip service.

Davis’ “no problem” solutions are the result of hard work, industry knowledge and connections; understanding client needs; and leveraging the marketplace to her clients’ advantage.

“When I was new to my job, Charmaine carried me — she educated me and helped me understand this field,” said one higher education client.

“More recently, when an earthquake damaged buildings on campus, caused a gas leak and left one building shuttered, Charmaine and her Marsh team walked us through this large, complex claim. She spent many, many extra hours on this, and there were never any fees or charges — just total support.”

“Her advice is perfect,” said another client. “I would recommend Charmaine to anyone.”

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The client added that Davis was able to renegotiate their high-premium workers’ comp coverage into a unique risk solution — a program that provided them with chargeback money, ultimately saving them around $200,000. “That savings is because of Charmaine,” he added. “She used her ingenuity to make that happen.”

“Nothing fazes Charmaine,” said another client whose wildlife conservation program requires charter flights to remote locations. She said Davis introduced them to a risk management program that helps enterprise-wide, allowing them to focus on their mission.

He Can Teach You a Thing or Two

Tyler LaMantia, CLCS
Area Executive Vice President
Gallagher, Rolling Meadows, Ill.

Every school district wants to allocate funds to its core purpose: educating students. Tyler LaMantia helped school district members of the Prairie State Insurance Cooperative (PSIC) in Illinois do just that — and more. Working closely with PSIC and its executive board, LaMantia developed a multi-year plan to protect the pool’s finances by mitigating risk with proactive claim management and loss control, while keeping member deductibles low and retentions stable.

PSIC members also improved risk management using a three-pronged loss control program LaMantia helped implement, resulting in fewer claims. Members received on-site loss control strategies targeted specifically at their risk needs and online loss-control training for all school district employees. Additionally, he educated them about cyber risks, leading to the decision to make cyber-threat coverage part of their package rather than an add-on.

“Tyler and the team literally built a better mouse trap,” said Dave Cratty, finance manager, Special Education Association of Peoria County. “Tyler’s dedication to and knowledge of the education sector, particularly in K to 12, is so strong. There might be someone out there who knows as much as him, but it’s hard to imagine anyone who knows more.”

In 2017, PSIC declared an equity return of more than $700,000 to its member school districts while maintaining a low-deductible structure — with no increases to property, auto or general liability deductibles. They also closed out 2009/2010 and 2010/2011 policy year claims, which typically were taking 10 or more years to settle.

Changing the Conversation

Shelley Levine, CIC, CRM, CSRM
Area Executive Vice President
Gallagher, New York

One of Shelley Levine’s education clients had an important but unplanned call in just a few hours. So he emailed her for some advice. Could she spend some time going over their policy to prep him? Of course, she said. But she did one better. Within the hour Levine was on campus and ready to take the call with her client.

“That’s the kind of customer service we get from Shelley. She’s super-responsive in addition to being knowledgeable, analytical and a strong negotiator.”

One client said Levine’s knowledge and negotiating skill enhanced their coverage while decreasing their costs.

“Shelley conducted an analysis of our coverage, which resulted in us gaining millions of dollars in additional coverage, two or three new lines of coverage and a couple of enhancements — all for the same or less premium cost than we had been paying,” said the client.

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When an education client challenged Levine to help them enhance their enterprise risk management (ERM) she took the time to get to know the school’s culture with an eye on every operational detail.

The school wanted faculty, staff and students to play a role in ERM but was struggling with how to include students who already had packed schedules.

“Shelley changed the conversation. Instead of a club or another meeting for the kids around ERM, she laid out a process that students use to make decisions. The new process integrated ERM into what they were already doing. Students make policy around real problems we face.”

Protecting the Study Abroad Experience

Chris Lueders, ARM
Area Senior Vice President
Gallagher, Rolling Meadows, Ill.

What’s that line about “the best laid plans?” Many of us have had something important — and costly — go wrong. For students studying abroad, such a disruption can affect academic progress and derail chances for a meaningful learning experience.

Chris Lueders of Gallagher came up with a risk solution for this problem at a major university. Their director of risk management explained: “We had no mechanism in place to provide student refunds if study abroad trips needed to be cancelled. There are sometimes concerns around international travel or specific travel advisories or bans that we follow for student safety.

“Chris worked very hard and was instrumental in putting together a trip cancellation policy and insurance product — the first one we had and the first one I am aware of in the market. Now this product is mandatory for our students embarking on study abroad trips.”

The director of compliance and risk management at another of Lueder’s higher education clients lauded her for great customer service — turnaround within two          hours — and for being a creative thinker who devises creative solutions.

This client had a complicated placement with moving and storing library books. The property carrier wasn’t competitive, so Lueder explored options and got coverage for the books under a cargo policy for a great price. The client added, “We’ve had some other sticky or 11th hour placements, but I’ve never felt placed on the back burner by Chris — she always makes us feel like we’re her most important client.”

Securing Hard-to-Get Coverage

Roberto Santiago
Vice President
Marsh, New York

Football and its relationship with traumatic brain injury (TBI) have been in the news of late, but the reality is that this risk exists in other areas, too. Sports such as ice hockey, rugby, soccer and even cheerleading carry TBI risks, explained Evelyn Wilson, director of purchasing and vendor relations, Salem State University.

The number of carriers willing to write coverage is limited.  Salem State University and fellow members of a Massachusetts-based college consortium bought coverage together — until their carrier drastically altered coverage by attaching a participant injury waiver and a neurodegenerative injury exclusion to all their accounts.

They faced an uphill battle; but they didn’t face it alone. They turned to Roberto Santiago of Marsh to give them the home-team advantage.

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Santiago faced a triple challenge: Find a replacement insurer, find it in a limited marketplace and convince the insurer to write the unique program structure the consortium members needed to operate athletics programs and protect students. Santiago conducted an extensive search without breaking a sweat. The result was a program that covered TBI at a very competitive price.

“Roberto has a very deep knowledge about higher education,” said Wilson. “His analysis is always in-depth, and he works very closely with us and other members of the consortium. He’s responsive, his customer service is excellent and we could not be happier with him.”

One Size Does Not Fit All

James Shewey
Client and Sales Executive
RCM&D, Glen Allen, Va.

Life on a college campus is rarely dull. Consequently, neither is life as a campus risk manager. But RCM&D’s James Shewey is helping to create risk solutions that leave everyone involved breathing a little easier.

Steve McAllister, vice president for finance and administration, Washington and Lee University, had handled a lot in his tenure.

Then the dance program told him that they wanted to do a spring semester performance off the side of a campus building. Not to worry. Just call James.

“We called James, and he worked closely with the carrier, the dance program, the rig company and everyone else to coordinate all the needs and make sure we were covered. James knows that insurance is not a one-size-fits-all box for us, and he is flexible in his approach and in managing both liability and perception of liability,” said McAllister.

Shewey also helped the Washington and Lee team with emergency management planning and drills. “James helped our internal team plan and hold these emergency drills in real time. Afterward he evaluated the drills and made recommendations to us,” said McAllister.

Pat McCann, CFO, the University of Virginia Foundation, said James is a 10 out of 10 in customer service, industry knowledge and risk solutions.

“We have a lot of real estate,” McCann noted. “And James has been very strategic in how he structures that coverage, so we get the right coverage at a fair price. He’s also brought in experts at no cost to us to advise us on risk management issues. He is exceptional.”

The complete list of 2018 Power Broker® winners can be found here.

Finalists:

Nick Baumgartner
Account Executive
Aon, Chicago

Alex Burton
Area President
Gallagher, Birmingham, Al.

James Gershon
Executive Vice President
Bolton & Company, Santa Clara, Calif.

Greg Hunter
Area Managing Director
Gallagher, Boston

Wendy Rosler
Senior Vice President
Marsh, New York

 

 

 

 

 

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]