View From the Bench

Workers’ Comp Docket

Significant workers' compensation legal decisions from around the country.
By: | May 12, 2017 • 11 min read

Obtaining Job Under False Name Doesn’t Preclude Benefits

Mera-Hernandez v. U.S.D. 233, No. 112,760 (Kan. 03/24/17)

Ruling: The Kansas Supreme Court upheld the Court of Appeals’ determination that a school custodian was eligible for workers’ compensation benefits despite the fact that she obtained the job using a false name and identification documents.

What it means: Because workers’ compensation laws frequently provide the exclusive remedy for a worker injured on the job, many states, including Kansas, liberally construe the term “employee” when determining eligibility for coverage.

Here, Kansas’ broad definition of employee, which essentially includes anyone who has entered into an employment arrangement with an employer, made an employer responsible for benefits.

Summary: A school custodian’s use of a false name and identification documents to obtain employment with a Kansas school district did not let the district off the hook for workers’ compensation benefits when the custodian injured her back.

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Because the custodian fell within the broad definition of “employee” set forth in Kansas’ Workers’ Compensation Act, the district could not exclude her from coverage, the Kansas Supreme Court ruled. It upheld the state Court of Appeals’ decision, which in turn affirmed a determination by the state Workers’ Compensation Board that the custodian was entitled to benefits for her work-related back injury.

The district asserted that because the custodian’s fraudulent conduct induced it to hire her, her employment contract was void from the beginning. Without an employment contract, it argued, she could not recover any benefits under the state’s workers’ compensation system.

Noting that the district’s argument “has been rejected at every level to this point,” the court explained that the definition of “employee” “should be liberally construed to bring workers within the provisions of the Act.”

Under the workers’ compensation law, an employee is “any person who has entered into the employment of or works under any contract of service or apprenticeship with an employer,” the court added. As the custodian fit the broad definition of employee, she was entitled to coverage.

The court also pointed out that in another case it declined to “read a public policy exception based on immigration status into the Act.” Instead determining that because the employee met the statutory definition of employee, she was covered.

Finally, it observed, the state legislature amended the act in 2011 but did not alter the definition of ‘employee.’”

Expert Testimony Connects Employee’s Cancer to Workplace Mercury Exposure

Paradise Valley Unified School District, et al. v. Industrial Commission of Arizona, et al., No. 1 CA-IC 16-0020 (Ariz. Ct. App. 03/28/17)

Ruling: The Arizona Court of Appeals upheld an administrative law judge’s finding that a school district technician’s bladder cancer was caused by exposure to mercury from crushed light bulbs. He was therefore entitled to workers’ compensation benefits for his industrial injury.

What it means: Employers in Arizona should ensure that workers who handle toxic materials are provided with adequate safety equipment, and comply with user manual instructions, as well as applicable state and federal safety regulations.

Summary: A technician for a school district was the primary operator of a “bulb-eater machine” his school district purchased. The machine was used to crush and dispose of all fluorescent bulbs that burned out in the district. The technician testified that he crushed approximately 20,000 bulbs over the course of his employment.

Four years after he started using the machine, he was diagnosed with an aggressive form of bladder cancer. He sought workers’ compensation benefits for his condition. An administrative law judge ruled in his favor, and the district appealed. The Arizona Court of Appeals held that he was entitled to benefits.

The court explained that to secure benefits, the technician had to show not only that his injury arose of his employment, but that industrial exposure to mercury caused him to develop cancer.

He satisfied the first element, legal causation, by demonstrating that operating the machine over a period of years inside a closed warehouse was part of his job duties, the court noted.

According to the ALJ, the court continued, the technician “was exposed to mercury vapor from broken and exploding fluorescent tubes and in fact was covered with dust containing mercury while performing his work.”

As to the second element, medical causation, the court highlighted the testimony of one of the technician’s treating physicians. He testified that the technician was “fairly young” to have bladder cancer and that he lacked any of the “usual risk factors, such as smoking, second-hand smoke, or a genetic predisposition.”

An expert witness added that the paper mask the technician used “did not provide the level of filtration necessary to protect against mercury exposure.” Based on the totality of the evidence, the court held that the technician was entitled to workers’ compensation benefits.

Board Must Take Second Look at Softball Injury After Applying Incorrect Standard

Morris James LLP v. Weller, No. N16A-05-006 FWW (Del. Super. Ct. 03/16/17)

Ruling: The Delaware Superior Court reversed a decision by the Industrial Accident Board finding that a paralegal’s injury during a softball game was compensable and sent the case back to apply the correct standard.

What it means: In Delaware, a worker’s injury during a recreational activity not sponsored by the employer is compensable if it occurred on the employer’s premises, the employer required participation, or the employer derived a substantial benefit beyond the intangible value of improvement in employee health and morale.

Summary: A group of a law firm’s employees decided to form a softball team to compete in the Wilmington Lawyers’ Softball League. The firm paid for the team’s jerseys, bats, and meals after each game.

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A bankruptcy paralegal previously managed the team and worked on softball-related activities at work. He left work early to get a cooler and buy beverages for the game.

During the game, the paralegal was running around the bases when his Achilles tendon ruptured. The controller of the law firm suggested that he file a workers’ compensation claim. The law firm’s carrier denied the claim.

Later, the Industrial Accident Board determined that the paralegal’s injury occurred within the course and scope of his employment. The law firm argued that the board applied the incorrect standard. The Delaware Superior reversed the board’s decision and sent the case back for it to apply the correct standard.

The board found that the Wilmington Lawyers’ Softball League, not the law firm, sponsored the softball games. The court found that the board applied factors that apply to a company-sponsored recreational event.

The court said that a different standard applies when a recreational event is not sponsored by an employer. A worker’s injury during a recreational activity not sponsored by the employer is compensable if it occurred on the employer’s premises, the employer required participation, or the employer derived a substantial benefit beyond the intangible value of improvement in employee health and morale.

The court pointed out that only one of the factors must be satisfied to support a finding that an injury is compensable. Also, the third factor requires an employer to derive a “substantial benefit” form the activity.

The court said that in the context of a recreational event, such as a softball game, a direct benefit to an employer includes business advertising, publicity, and monetary gain.

School Employee Scores Benefits for Wipeout During Senior Prank Day

Field v. Pinckneyville Community H.S. Dist. 101, 25 ILWCLB 12 (Ill. W.C. Comm. 2016)

Ruling: The Illinois Workers’ Compensation Commission awarded a teacher permanent partial disability benefits based on 35 percent loss of use of the left leg and medical expenses of $80,791 for injuries sustained while walking from her vehicle to the building where she worked.

What it means: In Illinois, when a teacher parks in an area that is much farther away than the normal area because students are participating in a senior prank day by blocking teachers from parking in their customary parking spaces, the prank day is implicitly approved by the school administrators, and the blocking of the teachers from parking in their customary parking spaces is a known activity, the teacher was within the scope of her employment.

Summary: A high school art teacher testified she was en route to her employer when she found the entrances to the school parking lot were blocked off by vehicles as part of a senior prank day. Therefore, she parked next to the football practice field, which was across a side street that bordered the school.

As she walked across the morning grass, she fell and fractured her lower left leg. The grass was not flat but had a slight decline from the sidewalk to the parking lot. The arbitrator found the teacher’s accident arose out of and in the course of her employment and awarded benefits.

The arbitrator noted that although the teacher parked in a spot that was much farther away from her customary parking space, it was the most direct route from her car to the school doors.

The school tradition of Senior Prank Day was not a school-sponsored event, but it was implicitly approved by the school administrators, and the blocking of the teachers from parking in their customary parking spaces was a known activity.

Accordingly, the teacher was within the scope of her employment when she parked across the street from the school.

After she parked, the teacher took the most direct route from her car to the school doors while maintaining a distance from the students, their music, and their vehicles.

The teacher testified that although she was not scared of the students, she was focused on their activities and desired to avoid close contact. She was not sure whether she slipped on the morning grass or tripped in an unseen hole.

Under these circumstances, she, as a teacher and therefore an intended target of the prank, experienced an increased risk of harm than that of the general public. Furthermore, her choice of route across the mowed grass and away from the students and vehicles was reasonable.

Upon review, the commission affirmed and adopted the decision of the arbitrator.

Suit for Injuries Resulting From Stroke at Work Moves Forward

Baiguen v. Harrah’s Las Vegas, LLC d/b/a Harrah’s Casino Hotel, et al., No. 70204 (Nev. Ct. App. 02/28/17)

Ruling: The Nevada Court of Appeals reversed a grant of summary judgment to an employer on a worker’s suit. The evidence did not show that the worker’s injuries arose from his employment.

What it means: In Nevada, a worker’s injury arose from his employment when there is a causal connection between the injury and the nature of the work or workplace.

Summary: A worker for Harrah’s Casino Hotel suffered a stroke sometime between driving to work and prior to the start of his shift. His coworkers saw him exhibiting signs of distress in the parking lot and the clocking-in area before work, but nobody realized that his condition was as serious as a stroke.

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A group of coworkers drove him home, where he remained unattended for two days and eventually suffered permanent injuries. The worker sued Harrah’s for negligence, claiming that its failure to render him timely medical aid reduced his chances of avoiding permanent harm from the stroke. Harrah’s sought summary judgment, arguing that the worker’s sole remedy was workers’ compensation.

The District Court granted summary judgment to Harrah’s, finding that the suit was barred by the exclusive remedy of the workers’ compensation law. The Nevada Court of Appeals reversed.

The court found that the worker’s injury occurred during the course of employment. He was on the premises of his place of employment and was proceeding to work when he experienced the stroke.

The court found that the facts of the case raised a question regarding whether the risk of the worker’s injuries were personal and neutral. The court determined that the worker’s injuries did not arise from his employment.

If the risk was personal, he would have suffered the stroke regardless of his employment. If the risk was neutral, the record did not show that his work duties or the working conditions increased the risk of the stroke.

Clerk’s Claim For Depression Not Barred

Wilson v. Charleston County School District, No. 5475 (S.C. Ct. App. 03/22/17)

Ruling: The South Carolina Court of Appeals held that a clerk’s change of condition claim was not barred by the doctrine of res judicata and was filed within the 12-month deadline.

What it means: In South Carolina, a change of condition claim for depression is not barred by res judicata when the depression was not raised in the worker’s initial claim.

Summary: A data clerk for a school district was a bystander to a fight between two students. The students inadvertently pushed into her and pinned her against a marble countertop, which resulted in injuries to her neck and back.

The clerk received workers’ compensation benefits. Later, she filed a claim alleging a change of condition, asserting that her back injury was affecting her mental health. The clerk had been diagnosed with endogenous depression.

The school district argued that the claim was barred by the doctrine of res judicata and was not timely filed. The South Carolina Court of Appeals held that the clerk’s change of condition claim was not barred by the doctrine of res judicata and was filed within the 12-month deadline.

The doctrine of res judicata ensures that no one is sued twice for the same cause of action. Here, the clerk experienced prior episodes of depression following her husband’s death and an episode related to anxiety.

However, she said that she did not experience significant depression until pain from her back injury increased significantly. No doctor opined that she had work-related depression before the initial hearing.

The court found that the evidence showed that the clerk’s psychological condition worsened after the initial hearing and before she filed her claim alleging the change of condition. The clerk did not raise the issue of depression in her initial hearing. At that time, it had not progressed to endogenous depression. Therefore, the claim was not barred.

The court also found that the clerk satisfied the requirement that a claim be filed within a 12-month deadline. She filed the notice of claim alleging a change of condition within 12 months of her last payment of compensation.

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Insurance Executives to Watch

2018: Year of the Underwriter

Our 2018 Insurance Executives to Watch drive a renewed focus on underwriting.
By: | December 14, 2017 • 16 min read

In insurance, perfect storms come in all shapes and sizes.  Consider this one, as we all must.

Years and years of ample capacity and manageable losses resulted in commercial insurance pricing floating further and further downward. Everywhere you looked, but especially in property, underwriters were not able to hold the line on price.

And then it came. The third quarter of 2017. Unprecedented Caribbean storm activity aligned with a whopper of an earthquake in Mexico and wildfires that scorched hundreds of acres in California’s pricey wine country.

By some estimates as much as $100 billion in insurance industry surplus was wiped from the books in a matter of weeks, at a time when carriers were charging the lowest premium prices relative to the risk in many years. Big carriers like Chubb and AIG saw 3Q losses of more than $1 billion.

As he takes the reins at AIG, no less a figure than Brian Duperreault has christened 2018 the year of the underwriter. Across the industry, entire lines of business are being rewritten in this transitioning market.

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“The severity of the recent catastrophic events forced AIG and all market participants to reassess appropriate pricing for the risks assumed,” Duperreault said.

Data and analytics receive lots of attention and resource investment, but as Duperreault and other 2018 Insurance Executives to Watch stated recently, data and analytics are just tools to be wielded in the hands of experienced underwriters, for which there is no replacement.

“No one has commented more on the importance of data analytics and technology in our industry than me,” Duperreault said during a third quarter earnings conference call with analysts.

“However, it is the underwriter, properly armed with this information, that is the central control point of our business. So, it is important that we get the balance back. Our use of technology and data will complement seasoned underwriters with the skill sets to evaluate the business on a risk by risk basis,” Duperreault said.

Duperreault also signalled that he planned to re-examine his company’s approach to the use of reinsurance.

“You know it is not my style to take large limits and retentions of risk,” he said. “We will also partner closely with reinsurance as they provide another valuable set of eyes into our book.”

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A Worthy Competitor

Dawn M. Miller, ARM, ERMP, CEO, AXA Insurance Company

As a competitive figure skater, AXA Insurance Company (U.S.) CEO Dawn Miller glides across the ice with grace and artistry, making it look easy.

In truth, her skill demonstrates a powerful athleticism stemming from years of honing her craft — sometimes falling, but always getting up, smarter for the lessons learned.

This grit-and-poise combo served Miller well during her career, which started at OPIC, followed by Willis, then onto AXA P&C  as global head of business development, and next leadership roles at AIG. She served with AIG as head of client engagement across 47 EMEA countries, as well as shouldering market-facing roles in Europe, the Gulf Region, Africa and the U.S.

“I apply lessons learned on the ice in business,” Miller said.

“Fail fast, I say. You will have setbacks but learn from them and move forward. Focus on what you do well and refine it.”

The next step for this worthy competitor? Leading AXA’s U.S. commercial insurance business as it develops client and stakeholder partnerships, raises the profile of multinational insurance programs and helps global clients face risks in new or unknown territories.

“This opportunity suits AXA Group given the size and breadth of our global network and the leading position of the U.S. market as a [foreign direct investment] destination,” Miller said.

Important also, Miller said, is AXA’s shift to a partnership focus.

“AXA’s global ecosystems allows us to craft solutions that empower clients. One example is AXA’s ‘Give Data Back’ data-sharing initiative that uses data as a tool to help clients know and understand risk.”

For 2018, Miller predicts, “The U.S. commercial market will begin to harden with a double-digit increase mainly due to an increase in the retrocession market, which will likely drive companies to seek alternative and enhanced modeling approaches.”

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Staying Ahead of Risk

Jeff Grange, President, North American Specialty Insurance; Global Credit and Surety Practice Leader, QBE

Since joining QBE in 2013 as president of specialty insurance, Jeff Grange tripled the division’s business in an effort to establish a national brand. Now the insurer is hoping Grange can bring his magic to its Global Credit and Surety Practice.

“We have to deliver products and services in a global context, but we also have to keep an eye on the future. We need to be ready to address risks as they emerge,” Grange said.

That effort may be hindered, though, by an aging and dwindling insurance workforce, the rapid pace of technological change, and the industry’s tendency to react rather than anticipate those changes.

Grange plans to tackle all three challenges.

“We combat those trends by partnering with STEM (science, technology, engineering and mathematics) organizations. With the rise of data analytics and the Internet of Things, the underwriter of the future will look a lot like today’s STEM student,” Grange said.

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“We’re surrounding ourselves with these young individuals who will help us stay on the leading edge of innovation and bring a fresh perspective to our traditional view of risk.”

Grange will also leverage QBE’s competencies in economic forecasting.

“We’re looking prospectively at sector risk, credit markets, country risk and the like,” he said.

Staying ahead of change will be critical. In 2018 and beyond, Grange sees CAT events, political uncertainty and country risk introducing some volatility in capacity and pricing.

The credit and surety markets, however, are currently on an upward trend, buoyed by continuing economic recovery in the U.S. and a stock market at its peak.

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Leading Through Engagement

Kathleen Savio, President of Alternative Markets, CEO designate, Zurich North America

Zurich Insurance Group announced in September the retirement of Mike Foley, who served Zurich North America as CEO since 2008. Kathleen Savio, current president of alternative markets, assumes the role this January.

While Foley is leaving some pretty big shoes to fill, Savio’s reputation precedes her: Zurich credits Savio for her dynamic community engagement.

“Helping is what we do, and community engagement and involvement is an extension of our purpose,” she said. “We cannot underestimate the impact we have in how our employees feel about coming to work each day. Everyone wants to be appreciated. Even on the busiest of days, I try not to forget that.”

And her community-centric attitude extends beyond the office walls. Savio serves as chair of the Z Zurich Foundation, a $100 million-endowed foundation that provides local grants supporting youth, mental health and community resilience.

“I’ve learned a lot about the positive impact we have on businesses and communities,” she said. “Insurance helps people and businesses get back up and running when faced with adversity.”

One example of such adversity would be the hurricanes that rocked the U.S. this summer and fall.

“The immense damage from Harvey, Irma and Maria demonstrated the importance of insurance in helping communities recover.”

Savio predicts losses from the storms could reach $100 billion, which is in alignment with industry estimates, driving property price movement upward in the coming months.

“Our focus is to help people and businesses be more resilient,” she added. In her new role, Savio will be dedicated to working with Zurich’s customers and distributors to prepare for similar events and other exposures.

“Our world is changing at a faster rate than we ever have seen before, and it won’t bypass the insurance industry or any of the industries and businesses that we protect,” said Savio.

“Together with my colleagues, I’m ready to lead Zurich North America through these challenges and opportunities.”

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Fighting Stance

Ed Moresco, President, Europe, Allied World

Following an acquisition and a significant reorganization, Allied World Insurance has entered an exciting new phase, one that will no doubt be marked by the same robust growth that has marked its history for the past 16 years.

As the insurer’s new head of European business, Ed Moresco comes across as confident about the company’s position in the face of global change and is more than ready to roll up his sleeves.

“If you look at Allied World as an organization, the term we like to use is that we punch above our weight class,” said Moresco. “We are quite often pitted against carriers that are maybe twice the size, three times our size just in terms of premium and market cap.”

The international operation, however, has not yet reached that level, which is where Moresco will focus his attention for the upcoming year and beyond.

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“We’re gaining relevance in the market, but we’re certainly not to the point where we’re critical to the space,” he said. “So our focus over the next two to three years is really to get to that point where we are viewed as a critical market.”

To get there amid an environment of global volatility, he said, his operations will remain focused on the organization’s strength in technical underwriting.

“We’ve lived that mantra and that ethos throughout our growth as an organization,” he said. “Staying close to the brokers and the clients and staying true to our technical underwriting will be critical, especially in these uncertain times.”

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At Warp Speed

Jonathan Zaffino, Executive Vice President, Everest Re Group

When Everest Re president and CEO Dominic Addesso addressed shareholders at the end of 2016, he took pride in pointing out recent hire Jonathan Zaffino, a Marsh & McLennan and ACE alumnus.

As president of Everest Insurance North America, Zaffino justified the hire by running all out in 2016, standing up nine business segments and bringing more than 100 products to market.

And his work isn’t done; Everest continues its expansion, fueling this by hiring more than 300 new colleagues in the last few years, as it transitions from a company focused on programs to a broader, global specialty company.

Zaffino, with the new title of executive vice president, Everest Re Group, is the one leading the transition in Everest Re’s insurance operations.

“We, as an organization, decided to be much more present, visible and capable in the broader definition of a specialty insurer. That included significantly expanding our capabilities in the direct broker business — both retail and wholesale,” Zaffino said.

One of Zaffino’s challenging tasks is bringing together new hires from more than 70 companies and getting them to sing from the same songbook. The lyrics involve embracing the Everest underwriting culture, which — among other things — means finding the right price for the risk regardless of line, client or geography.

Historically, Everest Re has had the right underwriting formula, averaging more than $1 billion in net income from 2012 through 2016. Its combined ratio over that same period averaged an enviable 87.

But then came the third quarter of 2017 with CAT losses squeezing more than $100 billion in surplus out of the insurance markets. Zaffino, like others, knows he’s in a transitioning market, but Everest Re possesses a robust and highly rated balance sheet.

Over the past 20-plus years, the company demonstrated its firm grip on the long view. Zaffino’s task is to build on top of that formidable foundation, moving quickly to reposition the face of the insurance operation.

“We’re moving quickly because we see opportunity,” he said.

And where does he see the markets going in 2018?

“Prior to the third quarter CAT activity, we were seeing a lot of fatigue in certain lines of business,” he said.

“The property lines began to renew at flat pricing, commercial auto lines were receiving needed rate adjustments, and pockets of other lines also started to come under increased scrutiny.

“We believe that the general theme of rates adjusting upward is an accurate statement at this time, but we don’t believe it will be a linear march. The ultimate outcome will be sorted out line by line, geography by geography, risk by risk.”

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Guiding Global Growth in M&A

Rowan Bamford, Global Head of Mergers & Acquisitions and Tax Insurance, Ironshore

In the two years since Ironshore established its M&A and tax insurance unit, the insurer has doubled down on its effort to become a global leader in the market.

The original 10-person underwriting team is now a 40-person powerhouse of specialists spread across nine countries. Gross written premium increased from about $60 million in 2014 to $240 million in 2017 as Ironshore built up business in the U.S., Canada and Latin America.

Rowan Bamford, Global Head of Mergers & Acquisitions and Tax Insurance, is charged with extending that growth to emerging markets around the world.

Harnessing global growth without entering unprofitable markets prematurely — while keeping Ironshore’s product compliant with local laws and regulations — ultimately comes down to people and patience.

“Recruiting experienced underwriters and regional managers is critical,” Bamford said. “I have to fully trust that the people reporting to me can quickly adapt to the challenges inherent in new markets.”

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Due diligence is also key. Bamford puts in time on the road, meeting with legal experts to better understand the unique regulatory and political environments of each target market.

“That helps us understand the nuances of local markets and determine where our product will work and where it won’t,” he said. “We’re not scared to spend the time doing research, finding where we should be doing business and who the right people to guide us are.”

While M&A volume will be highest in the U.S., transactions in new territories will continue in 2018.

“The M&A market is growing at the fastest rate in the U.S., and the tax insurance market is likely to grow significantly next year. Companies are just as likely to look at prospects in Mexico City as in Kansas City. Offering our product legally in places where M&A insurance has never existed before will be both our challenge and our opportunity in 2018,” Bamford said.

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A Sense of Confidence

Brian Duperreault, President and CEO, AIG

Brian Duperreault made his mark in the insurance business by identifying companies and executives that possessed potential and then helping them develop that potential.

This same formula appears to be in play as Duperreault returns as president and CEO to AIG, the company where he spent the formative decades of his career.

“AIG has a great culture with a spirit of collaboration and collegiality that gives me great confidence that we’re going to get our plans done,” said Duperreault, who took over the reins at AIG in May.

Duperreault said he saw ample reason to praise his new teammates at AIG in watching them respond to the catastrophes that caused so much human pain in the third quarter of 2017.  Hurricanes Harvey, Irma and Maria, the wildfires in California and the earthquake in Mexico all exacted a withering toll.

“I have been extremely impressed with our employees’ responses to those disasters, whether they were located in the impacted areas or helping colleagues around the world,” Duperreault said.

Structurally, Duperreault said he wants to create better-defined businesses within AIG and clearer lines of accountability.

One high-profile example of that is with AIG’s excess and surplus lines company, Lexington. Rather than run excess and surplus business through the other branches of the company, Duperreault picked AIG stalwart George Stratts to run Lexington as more of a stand-alone company.

“He will be building on AIG’s strong core capabilities and history of innovation, along with focused distribution strategies to meet the needs of our clients and brokers in this niche segment,” Duperreault said.

Look for Duperreault and his fellow underwriters at AIG to raise prices in 2018.

“We have successfully begun to raise rates appropriately as a result [of Q3 losses] and we will continue to do so,” Duperreault said.

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Corralling Intangibles

Mike Lebovitz, Senior Vice President, Innovation, FM Global

For many executives, the challenge in 2018 and beyond is clear and compelling. Grow the business. Make the business more profitable, etc., etc.

But for Mike Lebovitz, who heads a new innovation team at FM Global, the challenge isn’t in the known; it’s in the unknown.

Many business leaders accept that the world 10 years from now could be unrecognizable from what we know today, “But we have little idea how it’s going to be different,” Lebovitz said.

Now seven months into building his team, Lebovitz faces a two-headed challenge. On one side, he needs to add value to his FM Global teammates across the company in this era of rapid change. Rather than taking on the mantle of innovation, he needs to find a way to help the entire company keep pace.

“This group is about thinking differently, coming up with ideas, utilizing resources within the organization and people within the organization to bring in new ideas,” he said.

The other side of the challenge is assisting FM Global’s clients, the customers who, in fact, own the mutual insurer, to achieve their goals.

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“That is going to be our opportunity: to engage with our clients and understand their jobs to be done and help them do them faster, better, smarter,” Lebovitz said. To achieve this dual challenge, Lebovitz wants to recruit talent who understand that “in order to innovate you have to be able to fail.”

“I need people who understand science and technology, people who understand data and digital, people who understand business,” Lebovitz said.

“I’m looking for people that have the ability to fail, learn from it, and then move on to the next challenge,” he said. “If you’re not failing in innovation, you’re not taking enough risks,” he said.

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To Boldly Go

Seraina Macia, Executive Vice President and CEO, Blackboard

As mission statements go, “reimagining how commercial insurance is done” is an intriguing one, but it might sound like too lofty an ambition.

If anyone is capable of achieving it, though, it’s Seraina Macia, the executive vice president and CEO of Blackboard, a technology-focused subsidiary of AIG. Macia was previously the CEO of Hamilton USA and has held numerous executive positions at AIG.

“Seraina brings to AIG a rare combination of deep insurance expertise and an acute understanding of the role that technology and data analytics are playing in the ongoing evolution of our industry,” said Brian Duperreault, president and CEO, AIG. “Her perspective will be a valuable one to have on our leadership team.”

Under Macia’s direction, Blackboard will build upon the work of Hamilton USA, applying the cutting edge of technology to risk selection, pricing and claims-handling processes.

“We want to leverage emerging technology and data science to transform underwriting and claims by providing new tools and better information to the underwriter and claims adjusters to make better and faster decisions,” said Macia.

“This will help clients and brokers move faster and with more insight so that they can focus on what’s important: relationships, building business and reinvesting for growth.”

The name Blackboard represents a clean slate, and Macia says she feels blessed to have the opportunity to build a dynamic platform at a such a pivotal moment for the industry.

“Beyond 2018 and into the future, our aspiration is to put Blackboard at the forefront of innovation and technology in the insurance industry.”

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Filling a Multinational Void

Alfred Bergbauer, Vice President, Head of Multinational Underwriting, The Hartford

Recognizing a need for multinational solutions in the middle market, The Hartford embarked last year on a top-down initiative to expand their capabilities in global risks.

“Most middle market companies are uninsured, underinsured or improperly insured for multinational risks,” said Alfred Bergbauer, who came on board as The Hartford’s vice president and head of multinational underwriting last year.

“Eighty percent of middle market companies have international exposure, but half of them are never educated about international solutions by their broker. Educating that segment is our challenge and our opportunity,” he said.

The Hartford’s team of more than 1,000 underwriters, including 15 multinational specialists, work side by side with brokers to identify clients’ multinational exposure using specific criteria.

“We developed six critical questions for brokers to ask every client to determine their level of risk,” Bergbauer said. “Underwriters, brokers and insureds all have to be a part of the conversation.”

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In 2018, Bergbauer expects to be challenged by a perception that global business is cooling off, imperiled by nationalistic and protectionist movements around the world. Market research paints a different picture.

According to United Nations reports, foreign direct investment has steadily trended upward since 1990. In the last two years, though, U.S. investments have shifted away from emerging markets to more mature markets with established customer bases that mirror domestic buying behaviors.

In particular, investments by the small and mid-size segments have increased sharply.

“Watching the market indicated to us that we need to serve these smaller companies moving to establish presence in mature overseas markets,” Bergbauer said. &

The R&I Editorial Team can be reached at [email protected]