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Public Sector Risk

Risk on the Thin Blue Line

Targeted killings of police officers are on the rise.
By: | June 6, 2017 • 6 min read

Police work is a risky job that is getting even more perilous.

The number of police officers shot and killed in the United States in 2016 increased by 64 (56 percent) over 2015, according to the National Law Enforcement Officers Memorial Fund.

If that statistic seems startling, consider the number of ambush-style police killings in 2016 — 21 — the highest total in more than two decades.

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And that figure may well be surpassed in 2017, said Ken Wallentine, senior legal advisor for Lexipol, which provides best practice policy guidance to public safety agencies across the nation.

“Sadly, we are on track for another tragically record setting year,” with 17 targeted police officer killings already in 2017, said Wallentine, “and we’re not even half way through the year. I don’t remember ever seeing this before.”

Nancy Sylvester, managing director of Arthur J. Gallagher’s public sector practice is dismayed, but not surprised, by fatal gun attacks upon police.

“Is it increasing? Yes, and I’d never heard of that happening before. But now it’s expected.”

Barry Scott, risk manager for the City of Philadelphia said he’s trying not to be surprised, but instead to be aware about what’s going on.

“But certainly it’s an unusual phenomenon,” he said.

Build Trust, and Underwrite

The challenges facing public sector administrators charged with protecting police was part of Scott’s presentation at the RIMS conference in his city back in late April: police tactical awareness, officer mental health and well-being, police department support and training, “those were just some of the areas we talked about and it was very well received,” Scott said.

Fortunately, Scott was able to speak from a position of strength, having worked with the Philadelphia police department and its 6,300 police officers “to provide them with the tools they need to stay safe.”

Sensitivity training, de-escalation techniques and better ways of responding to the mentally ill underpin a new police culture. It’s also a culture where the mental and emotional well-being of officers is emphasized.

There were two targeted attacks resulting in injuries to Philadelphia police in 2016.  Philadelphia experienced just one police fatality by firearm since August 2012.

Unfortunately, the risk profile Philly’s police officers face from violence remains high, and much of this has to do with one word, Scott said: trust. It’s the one thing that keeps him busiest — building trust within the community while ensuring police have the tools needed to protect themselves along with the community.

“From a risk perspective, we’re working with the mayor’s office, city council and legislative offices to try and make sure the laws we have are ones that end up leaving us better protected.”

A case in point, Scott said, is last year’s DNC convention in Philadelphia. Laws were adjusted to make incidents associated with public demonstrations a lower-grade crime “so that we weren’t arresting a number of people during the convention who were just demonstrating and exercising their civil rights. That kind of step really takes away some opportunities for more violent or dangerous confrontation,” he said.

That didn’t stop the city from purchasing protester insurance for the convention. As Scott told a reporter last year, “We’re looking to protect the city’s financial resources for the taxpayers who have given us those dollars to steward. So if we are able to buy insurance to do that, then it’s a great deal.”

Mental Health: a Two-Way Street

For others, the main problems associated with violence against police aren’t legal or monetary, but cultural. Groups like Black Lives Matters leave cops “grappling with a conundrum,” said Wallentine: citizens want police officers to effectively police their communities and yet “are hyper-critical of us when we engage in policing.

“We are hyper-exposed to danger and one of the cultural artifacts is that some officers are saying, `If I don’t want to get into trouble, I shouldn’t do anything.’ ”

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Wallentine’s advice to police departments is to respond in a more nuanced fashion to the culture of caution that has always marked police work. That means creating an environment where police officers remain vigilant, but don’t over-read the clues in a domestic situation, for example (the most dangerous call for police), before that situation actually unfolds.

“We want officers to be careful, but we can’t have them behaving with hyper-vigilance and treating citizens as if they’re all the enemy. First off, that’s not so, and secondly, that’s not very effective policing.”

Sylvester agrees. Once a public sector risk manager, now a broker who gives advice to risk managers, she said the new catchphrase in police/community interactions is “managing crisis confrontation.”

Sensitivity training, de-escalation techniques and better ways of responding to the mentally ill underpin a new police culture. It’s also a culture where the mental and emotional well-being of officers is emphasized.

Sylvester said judging mental fitness for duty now occurs well before a raw recruit steps into a police car with an older, more experienced officer.

“Now, there’s a matrix test for the mental and emotional well-being of new recruits. Before, that would come later in their training; they’d `get around to it.’ They deal with that upfront now.”

Costs Count, Too

“Be careful out there!” That was the staff sergeant’s admonition to officers leaving the precinct on the hit TV show Hill Street Blues years ago. But it might just as easily come from the police department’s chief accountant. That’s because the number of officers heading out the door for some of Sylvester’s larger metropolitan clients have a hard time filling their full roster for law enforcement.

“Do more officers have to take more shifts and what does that do at the end of the day? But it also presents a different picture to the insurance underwriter.” Sylvester admits her clients “hate” her insurance application because it’s so long, including a liability costs review centered on a great many things, including training, dispatcher and police dog numbers, jail size, and hot pursuit policies.

Dale Stockton, executive director of Below 100, a national officer-safety initiative designed to reduce police line-of-duty deaths, underscores the dangers hot pursuits pose to police officers with a story: at the end of May, Bluefield, West Virginia’s Lieutenant Aaron Crook was killed when his patrol car in pursuit of a suspected drunk driver collided with another Bluefield Police Department patrol car and a West Virginia State Police patrol car.

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“The devastation,” said Stockton, “is as great to the family as when an officer is lost in gunfire incidents.” Nearly as sad, he added, vehicle crashes “are about as preventable as it gets.”

Stockton’s story is intended to make an even more sobering but largely unknown point: the risk posed by increased police shootings is far below that of police vehicle crashes.

The cost to law enforcement of police officer injury is also difficult to estimate, said Stockton, including life time medical, workers’ comp payments, and payments for pain and suffering. People remember media stories about police dying in a hail of bullets or high-profile vehicle crashes, he said. But there are plenty of additional costs that never make the pages of the newspaper.

David Godkin is a freelance magazine writer based in Toronto. He can be reached at [email protected]

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.