Risk Insider: Marilyn Rivers

Summer Blues: Seasonal Tourism Puts Risk Managers to the Test

By: | June 7, 2018 • 3 min read
Marilyn Rivers, CPCU, ARM, AIC, currently serves as the Director of Risk and Safety - City Safety and Compliance Officer for the City of Saratoga Springs, NY and is a Director at Large and Delegate for the Government and Public Sector Division of the National Safety Council. She can be reached at [email protected]

Communities across the country are busy painting lines on roadways, planting flowers and readying their constituents for the seasonal influx of visitors and their baggage. If you’re thinking of baggage as a suitcase, I’m talking about another kind of baggage.

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Each of us brings with us trials and tribulations from which we are seeking one brief moment of respite. Tired, weary and looking for a bit of diversion, we visit communities across the globe hoping for that one moment of solace whether it be sedate or a daring adventure.

As many of us prepare for the summer “high season,” we refurbish our visible infrastructure and prepare ourselves for the diversity of the population descending upon us. Our “regulars” are our community who assist us in our continuous yearly preparations. They steel themselves to the onslaught of traffic congestion and begin managing the changes that will occur in their own personal lives as they plan on how they will deal with the visitors descending upon them. This often creates conflict with the multitude of special events used as fundraising activities for local nonprofits designing events that offer activities to supplement vacation experiences.

Managing seasonal risk is like spinning a prize wheel. Each spin brings with it a potentially different outcome with any one visitor as they bring with them the issues weighing on their mind and their own individual visiting community spirit.

Seasonal risk management is like a classically choreographed ballet. It requires finesse and the precise timing of sequential and compatible governance. Many of us at the top of the seasonal destination list of “places to be and to be seen” in any given season will tax public safety budgets as additional staff is needed for the influx of visitors, the dynamics of their activities and the interaction with the community they are visiting.

Each of our communities gear up for staffing depending upon how we need to mitigate our risks. This staffing may include counselors for children’s summer camps, lifeguards for water risks, flower crews for beautification efforts and additional traffic control staff for known increases in traffic flow.

Long gone is the self-sufficiency of local community law enforcement. Communities across the nation constantly interact with other local law enforcement and state and federal authorities to ensure the safety of all the totality of all of our existences. ICE (Immigration and Customs Enforcement) isn’t a cube we place in our cup for a cold drink.

It’s become an organizational effort intent on managing the legality of our private business support staff, and in some cities its enforcement actions may be devastating to the viability of our resources as we attempt to feed, water, house and entertain our visitor populations.

Bars and restaurants embrace the revenue generated from our adult population. Sunshine and warm weather generate beer festivals, beer gardens, wine tastings, barbecue competitions and farmers markets.

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Each event brings with it coordination, licensing, insurance, code and fire enforcement and … staffing that separates government employees from their own seasonal family activities. Think about the overtime associated with each event as risk mitigation efforts ebb and flow with the multitude of events occurring on every given available day — rain or shine — during your community’s “high season.”

While we, as communities, attempt to inject the “happy” factor into seasonal events, our risk warriors take on a weariness as we make all those dreams come true. There is a saturation point in our community’s capacity to mitigate the totality of our daily, weekly and seasonal risks. We just try not to reach it as we problem solve together as a community team by continually COMMUNICATING.

Managing seasonal risk is like spinning a prize wheel. Each spin brings with it a potentially different outcome with any one visitor as they bring with them the issues weighing on their mind and their own individual visiting community spirit. Managing seasonal risk requires patience, courage and belief in the preparations that take place each day of the year as we embrace the hospitality our community offers. &

The opinions expressed in this piece are those of Marilyn Rivers,  not those of the City of Saratoga Springs.

More from Risk & Insurance

More from Risk & Insurance

Insurtech

Kiss Your Annual Renewal Goodbye; On-Demand Insurance Challenges the Traditional Policy

Gig workers' unique insurance needs drive delivery of on-demand coverage.
By: | September 14, 2018 • 6 min read

The gig economy is growing. Nearly six million Americans, or 3.8 percent of the U.S. workforce, now have “contingent” work arrangements, with a further 10.6 million in categories such as independent contractors, on-call workers or temporary help agency staff and for-contract firms, often with well-known names such as Uber, Lyft and Airbnb.

Scott Walchek, founding chairman and CEO, Trōv

The number of Americans owning a drone is also increasing — one recent survey suggested as much as one in 12 of the population — sparking vigorous debate on how regulation should apply to where and when the devices operate.

Add to this other 21st century societal changes, such as consumers’ appetite for other electronic gadgets and the advent of autonomous vehicles. It’s clear that the cover offered by the annually renewable traditional insurance policy is often not fit for purpose. Helped by the sophistication of insurance technology, the response has been an expanding range of ‘on-demand’ covers.

The term ‘on-demand’ is open to various interpretations. For Scott Walchek, founding chairman and CEO of pioneering on-demand insurance platform Trōv, it’s about “giving people agency over the items they own and enabling them to turn on insurance cover whenever they want for whatever they want — often for just a single item.”

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“On-demand represents a whole new behavior and attitude towards insurance, which for years has very much been a case of ‘get it and forget it,’ ” said Walchek.

Trōv’s mobile app enables users to insure just a single item, such as a laptop, whenever they wish and to also select the period of cover required. When ready to buy insurance, they then snap a picture of the sales receipt or product code of the item they want covered.

Welcoming Trōv: A New On-Demand Arrival

While Walchek, who set up Trōv in 2012, stressed it’s a technology company and not an insurance company, it has attracted industry giants such as AXA and Munich Re as partners. Trōv began the U.S. roll-out of its on-demand personal property products this summer by launching in Arizona, having already established itself in Australia and the United Kingdom.

“Australia and the UK were great testing grounds, thanks to their single regulatory authorities,” said Walchek. “Trōv is already approved in 45 states, and we expect to complete the process in all by November.

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group.” – Scott Walchek, founding chairman and CEO, Trōv

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group,” he added.

“But a mass of tectonic societal shifts is also impacting older generations — on-demand cover fits the new ways in which they work, particularly the ‘untethered’ who aren’t always in the same workplace or using the same device. So we see on-demand going into societal lifestyle changes.”

Wooing Baby Boomers

In addition to its backing for Trōv, across the Atlantic, AXA has partnered with Insurtech start-up By Miles, launching a pay-as-you-go car insurance policy in the UK. The product is promoted as low-cost car insurance for drivers who travel no more than 140 miles per week, or 7,000 miles annually.

“Due to the growing need for these products, companies such as Marmalade — cover for learner drivers — and Cuvva — cover for part-time drivers — have also increased in popularity, and we expect to see more enter the market in the near future,” said AXA UK’s head of telematics, Katy Simpson.

Simpson confirmed that the new products’ initial appeal is to younger motorists, who are more regular users of new technology, while older drivers are warier about sharing too much personal information. However, she expects this to change as on-demand products become more prevalent.

“Looking at mileage-based insurance, such as By Miles specifically, it’s actually older generations who are most likely to save money, as the use of their vehicles tends to decline. Our job is therefore to not only create more customer-centric products but also highlight their benefits to everyone.”

Another Insurtech ready to partner with long-established names is New York-based Slice Labs, which in the UK is working with Legal & General to enter the homeshare insurance market, recently announcing that XL Catlin will use its insurance cloud services platform to create the world’s first on-demand cyber insurance solution.

“For our cyber product, we were looking for a partner on the fintech side, which dovetailed perfectly with what Slice was trying to do,” said John Coletti, head of XL Catlin’s cyber insurance team.

“The premise of selling cyber insurance to small businesses needs a platform such as that provided by Slice — we can get to customers in a discrete, seamless manner, and the partnership offers potential to open up other products.”

Slice Labs’ CEO Tim Attia added: “You can roll up on-demand cover in many different areas, ranging from contract workers to vacation rentals.

“The next leap forward will be provided by the new economy, which will create a range of new risks for on-demand insurance to respond to. McKinsey forecasts that by 2025, ecosystems will account for 30 percent of global premium revenue.

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“When you’re a start-up, you can innovate and question long-held assumptions, but you don’t have the scale that an insurer can provide,” said Attia. “Our platform works well in getting new products out to the market and is scalable.”

Slice Labs is now reviewing the emerging markets, which aren’t hampered by “old, outdated infrastructures,” and plans to test the water via a hackathon in southeast Asia.

Collaboration Vs Competition

Insurtech-insurer collaborations suggest that the industry noted the banking sector’s experience, which names the tech disruptors before deciding partnerships, made greater sense commercially.

“It’s an interesting correlation,” said Slice’s managing director for marketing, Emily Kosick.

“I believe the trend worth calling out is that the window for insurers to innovate is much shorter, thanks to the banking sector’s efforts to offer omni-channel banking, incorporating mobile devices and, more recently, intelligent assistants like Alexa for personal banking.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.”

As with fintechs in banking, Insurtechs initially focused on the retail segment, with 75 percent of business in personal lines and the remainder in the commercial segment.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.” — Emily Kosick, managing director, marketing, Slice

Those proportions may be set to change, with innovations such as digital commercial insurance brokerage Embroker’s recent launch of the first digital D&O liability insurance policy, designed for venture capital-backed tech start-ups and reinsured by Munich Re.

Embroker said coverage that formerly took weeks to obtain is now available instantly.

“We focus on three main issues in developing new digital business — what is the customer’s pain point, what is the expense ratio and does it lend itself to algorithmic underwriting?” said CEO Matt Miller. “Workers’ compensation is another obvious class of insurance that can benefit from this approach.”

Jason Griswold, co-founder and chief operating officer of Insurtech REIN, highlighted further opportunities: “I’d add a third category to personal and business lines and that’s business-to-business-to-consumer. It’s there we see the biggest opportunities for partnering with major ecosystems generating large numbers of insureds and also big volumes of data.”

For now, insurers are accommodating Insurtech disruption. Will that change?

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“Insurtechs have focused on products that regulators can understand easily and for which there is clear existing legislation, with consumer protection and insurer solvency the two issues of paramount importance,” noted Shawn Hanson, litigation partner at law firm Akin Gump.

“In time, we could see the disruptors partner with reinsurers rather than primary carriers. Another possibility is the likes of Amazon, Alphabet, Facebook and Apple, with their massive balance sheets, deciding to link up with a reinsurer,” he said.

“You can imagine one of them finding a good Insurtech and buying it, much as Amazon’s purchase of Whole Foods gave it entry into the retail sector.” &

Graham Buck is a UK-based writer and has contributed to Risk & Insurance® since 1998. He can be reached at riskletters.com.