Risk Insider: Joe Cellura

Made in America

By: | February 14, 2017 • 2 min read
Joe Cellura is President, North American Casualty, at Allied World, responsible for for the production and profitability of Primary Casualty, Excess Casualty, Environmental, Surety, Primary Construction and Programs. He can be reached at [email protected]

 

Made in America: What does that mean once you get past the patriotic slogan? How does the insurance industry prepare for potential upswings in manufacturing on its own soil?

President Trump has been quite vocal about bringing manufacturing jobs back to the United States. U.S. manufacturing jobs declined from 17.3 million in 2000 to 12.3 million in 2015. Industry innovation and technology significantly reduced the workforce, but clearly, many jobs also moved overseas.

The Wall Street Journal’s recent analysis of S&P 500 company communications found that many companies are speaking with investors about the impact of President Trump’s priority to “increase U.S. manufacturing employment.”

Opening new plants is not as easy as purchasing an empty manufacturing plant, and hanging your sign on the door. There are a host of environmental concerns whether a company chooses to build new or to renovate an old plant.

CEOs are strategizing about this policy priority, and the insurance and risk management community must work alongside the C-suite as a critical part of the strategic process, assessing the new risk picture and preparing to manage these risks.

Preparing the Insurance Industry

A manufacturing workforce shift would require top-notch leadership and risk management focus. Insurance underwriters will be assessing the risk by looking at a company’s management leadership qualities and their ability to recruit and train quality employees.

Evaluating this changing risk picture should include a detailed look at exposures related to physical plants, the workers, the product and the bottom line. This requires a look across the full spectrum of risks.

For example, what are the liability issues that might arise from an untrained workforce?  What are the construction risks involved in renovating old or building new manufacturing plants?

Consider the environmental exposures. Opening new plants is not as easy as purchasing an empty manufacturing plant, and hanging your sign on the door. There are a host of environmental concerns whether a company chooses to build new or to renovate an old plant.

Even with mothballing, which ensures that plants that have been out of use are still ready and safe to reopen, there is concern that old plants will not be up to safety and quality standards. There are an abundance of unused manufacturing plants all over the U.S. that are gathering dust. Companies are trying to unload, clean-up and reuse them.  If old or new plants have any proximity to waterways and wetlands, executives need to think about the possibility of exposing those habitats to contaminants.

Changing Risk Assessments

For companies that have been out of the U.S. manufacturing world for some time, how will they manage these operations?

The insurance industry, along with manufacturers, will need to build a new model for this era of manufacturing risk. Standards must be set and manufacturers must meet them for underwriters to properly assess premiums. Precedent would be helpful, but too much time has passed since the 1950’s U.S. manufacturing zenith, when workers were not joined by robots on the assembly lines.

Manufacturing risk assessments changed when companies moved overseas because brokers and insurers could not physically go to the plants and assess risks on-site.  With the possibility of companies moving back, the insurance industry has to be prepared to walk the floors and understand what they are seeing.

The insurance industry, like the manufacturers, will need to enhance its focus from foreign risk control and liability underwriting to the complex domestic landscape. This domestic operating theater will present a myriad of legal, environmental and management challenges. The opportunity lies in meeting those challenges.

As we anticipate change on the horizon, we must take a broad look at the risk picture and begin to lay a foundation for a smooth transition to more American production. The first building blocks need to be safety. Risk management planning will protect manufacturers and their shareholder value.

More from Risk & Insurance

More from Risk & Insurance

2017 Teddy Awards

The Era of Engagement

The very best workers’ compensation programs are the ones where workers aren’t just the subject of the program, they’re a part of it.
By: | November 1, 2017 • 5 min read

Employee engagement, employee advocacy, employee participation — these are common threads running through the programs we honor this year in the 2017 Theodore Roosevelt Workers’ Compensation and Disability Management Awards, sponsored by PMA Companies.

A panel of judges — including workers’ comp executives who actively engage their own employees — selected this year’s winners on the basis of performance, sustainability, innovation and teamwork. The winners hail from different industries and regions, but all make people part of the solution to unique challenges.

Advertisement




Valley Health System is all-too keenly aware of the risk of violence in health care settings, running the gamut from disruptive patients to grieving, overwrought family members to mentally unstable active shooters.

Valley Health employs a proactive and comprehensive plan to respond to violent scenarios, involving its Code Atlas Team — 50 members of the clinical staff and security departments who undergo specialized training. Valley Health drills regularly, including intense annual active shooter drills that involve participation from local law enforcement.

The drills are unnerving for many, but the program is making a difference — the health system cut its workplace violence injuries in half in the course of just one year.

“We’re looking at patient safety and employee safety like never before,” said Barbara Schultz, director of employee health and wellness.

At Rochester Regional Health’s five hospitals and six long-term care facilities, a key loss driver was slips and falls. The system’s mandatory safety shoe program saw only moderate take-up, but the reason wasn’t clear.

Rather than force managers to write up non-compliant employees, senior manager of workers’ compensation and employee safety Monica Manske got proactive, using a survey as well as one-on-one communication to suss out the obstacles. After making changes based on the feedback, shoe compliance shot up from 35 percent to 85 percent, contributing to a 42 percent reduction in lost-time claims and a 46 percent reduction in injuries.

For the shoe program, as well as every RRH safety initiative, Manske’s team takes the same approach: engaging employees to teach and encourage safe behaviors rather than punishing them for lapses.

For some of this year’s Teddy winners, success was born of the company’s willingness to make dramatic program changes.

Advertisement




Delta Air Lines made two ambitious program changes since 2013. First it adopted an employee advocacy model for its disability and leave of absence programs. After tasting success, the company transitioned all lines including workers’ compensation to an integrated absence management program bundled under a single TPA.

While skeptics assume “employee advocacy” means more claims and higher costs, Delta answers with a reality that’s quite the opposite. A year after the transition, Delta reduced open claims from 3,479 to 1,367, with its total incurred amount decreased by $50.1 million — head and shoulders above its projected goals.

For the Massachusetts Port Authority, change meant ending the era of having a self-administered program and partnering with a TPA. It also meant switching from a guaranteed cost program to a self-insured program for a significant segment of its workforce.

Massport’s results make a great argument for embracing change: The organization saved $21 million over the past six years. Freeing up resources allowed Massport to increase focus on safety as well as medical management and chopped its medical costs per claim in half — even while allowing employees to choose their own health care providers.

Risk & Insurance® congratulates the 2017 Teddy Award winners and holds them in high esteem for their tireless commitment to a safe workforce that’s fully engaged in its own care. &

_______________________________________________________

More coverage of the 2017 Teddy Award Winners and Honorable Mentions:

Advocacy Takes Off: At Delta Air Lines, putting employees first is the right thing to do, for employees and employer alike.

 

Proactive Approach to Employee SafetyThe Valley Health System shifted its philosophy on workers’ compensation, putting employee and patient safety at the forefront.

 

Getting It Right: Better coordination of workers’ compensation risk management spelled success for the Massachusetts Port Authority.

 

Carrots: Not SticksAt Rochester Regional Health, the workers’ comp and safety team champion employee engagement and positive reinforcement.

 

Fit for Duty: Recognizing parallels between athletes and public safety officials, the city of Denver made tailored fitness training part of its safety plan.

 

Triage, Transparency and TeamworkWhen the City of Surprise, Ariz. got proactive about reining in its claims, it also took steps to get employees engaged in making things better for everyone.

A Lesson in Leadership: Shared responsibility, data analysis and a commitment to employees are the hallmarks of Benco Dental’s workers’ comp program.

 

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