Column: Workers' Comp

Next-Level Solutions for 2017

By: | December 14, 2016 • 2 min read
Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

As surely as Americans will resolve to exercise more and eat less following the holiday excess, workers’ compensation writers will be busy this month predicting 2017’s top stories.

I’ll limit my predictions to two. Neither will become a sexy news story, nor will readers proclaim me a workers’ comp clairvoyant. But even the world’s most cautious risk manager would sleep soundly wagering a year’s salary on their certain occurrence.

I predict that one, workers will continue getting hurt. Two, good workers’ comp and safety managers will continue looking for measures to reduce those injuries.

Given my predictions are certain to occur, I’ll provide some ideas to help mitigate the inevitable.

One is a strategy I first heard from my friend Bill Wainscott, manager of workers’ comp and occupational health at International Paper.

It calls for establishing a separate worker safety program exclusively focusing on the causes of a company’s most severe accidents, while maintaining the employer’s established safety program for reducing overall frequency.

During 2016, I heard more employers touting results from increased worker-involvement measures, like allowing any employee to halt any job when they observe safety issues.

Over the years, employers have continually cut frequency. Many are experiencing record low injury rates because of their safety measures, coupled with factors like increased workplace automation.

But severity continues to hound them.

Advertisement




So while establishing a second injury-prevention program is not a widespread trend, some large, name-brand employers decided they needed to do more to stop severe injuries and deaths. They have reportedly experienced successful results.

It’s a topic Wainscott addressed at this year’s National Workers’ Compensation and Disability Conference® & Expo.

He believes success means employers first establish a safety culture that truly impacts overall frequency. You can’t skip that requirement. It provides the foundation for launching an exclusive severity program.

Employers can then identify what’s driving their serious worker injuries and fatalities to develop very detailed safety programs targeting those causes.

Another idea requires increasingly involving workers in safety leadership. This can work with the above idea or stand-alone. But during 2016, I heard more employers touting results from increased worker-involvement measures, like allowing any employee to halt any job when they observe safety issues. You might find that such measures make your safety efforts more about people and less about procedures. This can occur because people typically respond better when they engage in creating or fostering safety procedures.

They are more likely to take pride in the success of practices they help develop and enforce and to understand that safety is about caring for themselves and their co-workers.

Continue finding measures like these that help employees return home safe every day, and I predict less of your company’s revenue will flow to claim-service providers, no matter what workers’ comp news topics emerge during 2017. &

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.

Advertisement




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.

Advertisement




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]