NWCDC Session Preview

NWCDC Adopts Technology Track

This year’s presentations offer timely and diverse solutions to the challenges facing the workers’ compensation and disability realm.
By: | September 5, 2017 • 4 min read

From wearables to insurtech, telemedicine and more, employers face budding challenges as technology advances. Adapting tech into the workers’ comp system can help reduce claims and provide positive results, but technology can also create strife.

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“We’re all challenged by technology and how to utilize it,” said William Wainscott, manager of occupational health & workers’ compensation at International Paper. “The new technology track at NWCDC will give us an opportunity to see how other employers are using technology to advance their programs.”

The National Workers’ Compensation and Disability Management Conference & Expo boasts a number of technology-based sessions during its Dec. 6 through Dec. 8 conference in Mandalay Bay, Las Vegas.

“The track focuses on the integration or use of technology. For example, there is a session on using telemedicine. We’ve been talking about telemedicine for workers’ comp for years. There’s also a great panel discussing use of analytical tools throughout the claims process. I am very interested in the session about wearables,” he said.

Wainscott acts as an NWCDC program co-chair and, together with co-chair Denise Algire, has worked to provide a diverse group of topics. Algire added that when they were designing the program this year, they wanted to create content around technology that is relevant to employers.

William Wainscott, manager, workers’ comp and occupational health, International Paper

“So much of the industry is surrounded by technology,” she said.

Algire is the director of risk initiatives and the national medical director of risk management at Albertsons Companies. She will be addressing “How High-Performance Claims Organizations Use Technology to Differentiate Their Operations” during the conference.

In this session, Algire and her colleagues will discuss technology’s impact on high-performing claims-management organizations and share concrete examples on how technology is used to drive claim outcomes.

Beyond Technology

Tech isn’t the only topic of interest. This year’s NWCDC is robust with diverse topics that employers and service providers will want to see. With sessions on complex claims, pharmacy management strategies, predictive analytics, managed care and more, NWCDC has a little bit of everything in store.

“Every year we strive to bring in new speakers and new ideas focused on employer best practices,” said Algire. She noted that one of the biggest challenges is having two sessions of interest occurring at the same time. “To ensure attendees have a chance to participate in popular sessions, this year has a few key repeating sessions. The agenda is laid out so that attendees can pick the topics that are most relevant for them and their businesses.”

Barry Bloom, a principal consultant with the bdb Group, will speak at one of the repeating sessions. “The Double Play-Process: A Blueprint for Closing Complex, High-Value Claims,” held on Thursday, Dec. 7, at 10:45 am and 4:15 pm, will cover topics on managing high-exposure litigated claims, practicing claim-process quality control and adopting the double-play process into managing claims.

“I always walk away from this session with an ‘a-ha’ moment. There’s always someone who gives a tip or two that I can apply to my own program.” — William Wainscott, manager, workers’ comp and occupational health, International Paper

Wainscott and Algire will both be speaking at the conference as well.

“60 Tips in 60 Minutes — Sage Advice for Overcoming Complex Claims Challenges” is scheduled for Friday, Dec. 8, at 8:30 am. The fast-paced nature of the session will keep attendees on their toes as the panel of seven industry experts, including Wainscott, give tips on how to better deal with and prevent complex claim challenges.

“I always walk away from this session with an ‘a-ha’ moment,” Wainscott said. “There’s always someone who gives a tip or two that I can apply to my own program.”

Algire, in addition to speaking on high-performance claims and technology, will be speaking during “Where’s the ‘Care’ in Managed Care? Fixing Misaligned Incentives.”

“Managed care was developed with the objective of getting patients the best care,” she explained. “What has happened over time with managed care is misaligned incentives with unintended consequences.”

Frank Pennachio, partner at Oceanus Partners, will tackle care management alongside Algire. They will discuss these unintended consequences, diving into the flaws in percentage-of-savings models, fee-splitting and other payment arrangements. The session is scheduled for Thursday, Dec. 7, at 10:45 am.

‘The Nordstrom Way’

In total, the conference features 34 breakout sessions, two mega sessions, one general session and a keynote address delivered by Janine Kral, the VP of risk management at Nordstrom.

“Janine’s continuing the discussion within the industry on driving employee advocacy and getting employees engaged,” said Wainscott. “I’m interested in hearing how she takes the Nordstrom customer service philosophy and transfers it into the injured worker’s recovery process.”

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“Injured worker engagement has a connection to what we do as retailers. A functional, happily engaged employee is more likely to provide great customer service to our customers,” Algire added.

Nordstrom’s workers’ comp program has long embraced the practice of injured worker advocacy, and Kral, leading the way, will speak on how the retailer applied its customer-focused approach to engaging with injured employees.

Kral has been with Nordstrom for 30 years, evolving the risk management department into the best-in-class program that exists today. “The Nordstrom Way: Boosting Injured-Worker Engagement” is set for Wednesday, Dec. 6, at 8:30 am.

The complete agenda for NWCDC can be found on the conference’s website, along with presenter bios and the Expo’s exhibitor list. &

Autumn Heisler is a staff writer at Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Alternative Energy

A Shift in the Wind

As warranties run out on wind turbines, underwriters gain insight into their long-term costs.
By: | September 12, 2017 • 6 min read

Wind energy is all grown up. It is no longer an alternative, but in some wholesale markets has set the incremental cost of generation.

As the industry has grown, turbine towers have as well. And as the older ones roll out of their warranty periods, there are more claims.

This is a bit of a pinch in a soft market, but it gives underwriters new insight into performance over time — insight not available while manufacturers were repairing or replacing components.

Charles Long, area SVP, renewable energy, Arthur J. Gallagher

“There is a lot of capacity in the wind market,” said Charles Long, area senior vice president for renewable energy at broker Arthur J. Gallagher.

“The segment is still very soft. What we are not seeing is any major change in forms from the major underwriters. They still have 280-page forms. The specialty underwriters have a 48-page form. The larger carriers need to get away from a standard form with multiple endorsements and move to a form designed for wind, or solar, or storage. It is starting to become apparent to the clients that the firms have not kept up with construction or operations,” at renewable energy facilities, he said.

Third-party liability also remains competitive, Long noted.

“The traditional markets are doing liability very well. There are opportunities for us to market to multiple carriers. There is a lot of generation out there, but the bulk of the writing is by a handful of insurers.”

Broadly the market is “still softish,” said Jatin Sharma, head of business development for specialty underwriter G-Cube.

“There has been an increase in some distressed areas, but there has also been some regional firming. Our focus is very much on the technical underwriting. We are also emphasizing standardization, clean contracts. That extends to business interruption, marine transit, and other covers.”

The Blade Problem

“Gear-box maintenance has been a significant issue for a long time, and now with bigger and bigger blades, leading-edge erosion has become a big topic,” said Sharma. “Others include cracking and lightning and even catastrophic blade loss.”

Long, at Gallagher, noted that operationally, gear boxes have been getting significantly better. “Now it is blades that have become a concern,” he said. “Problems include cracking, fraying, splitting.

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“In response, operators are using more sophisticated inspection techniques, including flying drones. Those reduce the amount of climbing necessary, reducing risk to personnel as well.”

Underwriters certainly like that, and it is a huge cost saver to the owners, however, “we are not yet seeing that credited in the underwriting,” said Long.

He added that insurance is playing an important role in the development of renewable energy beyond the traditional property, casualty, and liability coverages.

“Most projects operate at lower capacity than anticipated. But they can purchase coverage for when the wind won’t blow or the sun won’t shine. Weather risk coverage can be done in multiple ways, or there can be an actual put, up to a fixed portion of capacity, plus or minus 20 percent, like a collar; a straight over/under.”

As useful as those financial instruments are, the first priority is to get power into the grid. And for that, Long anticipates “aggressive forward moves around storage. Spikes into the system are not good. Grid storage is not just a way of providing power when the wind is not blowing; it also acts as a shock absorber for times when the wind blows too hard. There are ebbs and flows in wind and solar so we really need that surge capacity.”

Long noted that there are some companies that are storage only.

“That is really what the utilities are seeking. The storage company becomes, in effect, just another generator. It has its own [power purchase agreement] and its own interconnect.”

“Most projects operate at lower capacity than anticipated. But they can purchase coverage for when the wind won’t blow or the sun won’t shine.”  —Charles Long, area senior vice president for renewable energy, Arthur J. Gallagher

Another trend is co-location, with wind and solar, as well as grid-storage or auxiliary generation, on the same site.

“Investors like it because it boosts internal rates of return on the equity side,” said Sharma. “But while it increases revenue, it also increases exposure. … You may have a $400 million wind farm, plus a $150 million solar array on the same substation.”

In the beginning, wind turbines did not generate much power, explained Rob Battenfield, senior vice president and head of downstream at JLT Specialty USA.

“As turbines developed, they got higher and higher, with bigger blades. They became more economically viable. There are still subsidies, and at present those subsidies drive the investment decisions.”

For example, some non-tax paying utilities are not eligible for the tax credits, so they don’t invest in new wind power. But once smaller companies or private investors have made use of the credits, the big utilities are likely to provide a ready secondary market for the builders to recoup their capital.

That structure also affects insurance. More PPAs mandate grid storage for intermittent generators such as wind and solar. State of the art for such storage is lithium-ion batteries, which have been prone to fires if damaged or if they malfunction.

“Grid storage is getting larger,” said Battenfield. “If you have variable generation you need to balance that. Most underwriters insure generation and storage together. Project leaders may need to have that because of non-recourse debt financing. On the other side, insurers may be syndicating the battery risk, but to the insured it is all together.”

“Grid storage is getting larger. If you have variable generation you need to balance that.” — Rob Battenfield, senior vice president, head of downstream, JLT Specialty USA

There has also been a mechanical and maintenance evolution along the way. “The early-generation short turbines were throwing gears all the time,” said Battenfield.

But now, he said, with fewer manufacturers in play, “the blades, gears, nacelles, and generators are much more mechanically sound and much more standardized. Carriers are more willing to write that risk.”

There is also more operational and maintenance data now as warranties roll off. Battenfield suggested that the door started to open on that data three or four years ago, but it won’t stay open forever.

“When the equipment was under warranty, it would just be repaired or replaced by the manufacturer,” he said.

“Now there’s more equipment out of warranty, there are more claims. However, if the big utilities start to aggregate wind farms, claims are likely to drop again. That is because the utilities have large retentions, often about $5 million. Claims and premiums are likely to go down for wind equipment.”

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Repair costs are also dropping, said Battenfield.

“An out-of-warranty blade set replacement can cost $300,000. But if it is repairable by a third party, it could cost as little as $30,000 to have a specialist in fiberglass do it in a few days.”

As that approach becomes more prevalent, business interruption (BI) coverage comes to the fore. Battenfield stressed that it is important for owners to understand their PPA obligations, as well as BI triggers and waiting periods.

“The BI challenge can be bigger than the property loss,” said Battenfield. “It is important that coverage dovetails into the operator’s contractual obligations.” &

Gregory DL Morris is an independent business journalist based in New York with 25 years’ experience in industry, energy, finance and transportation. He can be reached at [email protected]