Risk Insider: Chris Mandel

Insurtech or RiskTech?

By: | April 3, 2018 • 3 min read
Chris Mandel is SVP, strategic solutions for Sedgwick and Director of the Sedgwick Institute. He is a long-term risk management leader and a former president of RIMS. He can be reached at [email protected]

I was recently invited to participate at a technology-focused forum at a Siemens location in Houston, Texas. The meeting was centered on the technology that Siemens built to better manage operational risk among energy companies.


While the meeting was seemingly narrow in its design and intent, the exchange of ideas and discussions became broad and far-reaching as attendees ranged from insurers, reinsurers, brokers, consultants and other risk stakeholders.

The core question posed at this meeting was whether or not Siemens’ insurtech solution could be expanded and applied to the broader energy sector and beyond.

Within this context, my role was to share a more strategic message related to the bigger picture of risk and the increasing challenge it has become to most risk leaders. The ensuing discussion led me to a “light bulb moment” that I believe others will find interesting.

While the big picture of strategic risk is often seen as an enterprise-wide practice that attempts to apply the fundamental risk process to all significant risks, the insurtech world seems singularly focused on technology that solves insurance-related problems.

This is well and good, as I continue to believe that insurance is a critical mitigation and risk transfer tool, whose importance to efficient commerce and economies worldwide cannot be understated.

However, there is a bigger picture, both with respect to risk itself and in the world of technology, and that is risk technology.

My light bulb moment was when I realized that as important as insurance — and by extension insurtech — is, “risktech” is the future of technology that will be the most helpful to risk leaders going forward.

Even today, cyber risk is still often addressed and managed by insurance solutions. And yet while necessary, those techniques are often very limited in their affect.

I am not talking about today’s popular governance, risk management and compliance systems framework, but rather the technology solutions that will help mitigate risk by more effectively navigating the digitization of the risk profile of organizations.

I believe this emerging reality was signaled first and most significantly by the challenges of cyber risk. Even today, cyber risk is still often addressed and managed by insurance solutions. And yet while necessary, those techniques are often very limited in their affect.

For example, most high-profile hacks result in related insurance proceeds totaling a few hundred million dollars; and yet, total loss costs will often exceed $1 billion.


Admittedly, insurance is not available for much of the consequences of these events. Nevertheless, an organization’s board of directors, shareholders, executives and customers may have bigger expectations.

While I am not saying there aren’t other mitigation techniques available to address cyber events, I am suggesting that we need more of them. More specifically, we need other “risktech” mitigation tools to manage the risks of an increasingly digitized risk profile.

The good news is that these solutions are already beginning to emerge and are broadening the technology solution set that was previously tied to insurable risks.

The remaining question is whether or not risk leaders are up to this new world challenge and how they’ll respond. But, that’s the subject of another day.

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.


That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.


Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

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