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2017 Power Broker

Workers’ Compensation

An Indispensable Partner

Christopher Bailey
Vice President
Willis Towers Watson, Greenville, S.C.

After decades coaching college football, Dave Roberts launched a new venture — Vital Care EMS, a South Carolina medical transportation company. There was a steep learning curve at first, and the company’s experience mod went “through the roof.”

Willis Towers Watson’s Christopher Bailey stepped in and analyzed Vital Care’s program top to bottom, identifying everything from quick-fix issues to long-term improvements. Roberts, the company’s president, credited Bailey with helping him turn things around.

“[He] helped us grow from five trucks and 20 people to 100 trucks and 400 people,” said Roberts. “He’s always given me great advice — even when I don’t want to listen to him.”

Roberts said the company could never have grown so fast without Bailey.

“We’ve been approached by every person in the state to [change brokers] and I won’t even go there,” he said. “I have the highest regard for him.”

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“He is the bomb,” said Dustin Pelletier, franchise owner and operator of the Big Air Trampoline Park in Spartanburg, S.C. Pelletier said Bailey had never worked with a trampoline park before. But he learned the industry so fast and so thoroughly that he soon found better insurance solutions than even Big Air corporate could offer.

“He got me better cover with less expensive premiums — better than corporate,” he said.

In fact it’s so good, said Pelletier, that corporate is asking, “Hey, can we get that guy’s number?”

A Champion for Small Employers

Riley Holman
Insurance Consultant
Dixie Leavitt, Cedar City, Utah

Dixie Leavitt’s Riley Holman understands that often the person managing workers’ comp for a small entity wears several other hats as well. That’s why he makes it a priority to streamline and simplify coverage as much as possible, while offering expert advice on safety improvements that won’t break the bank.

He also understands that even one workplace tragedy can turn a small business upside down in a moment.

Holman saw that playing out with a sand and gravel company in a tough position. A workplace accident had led to a double fatality and a large claim payout.

Carriers were not inclined to take the company on, and they were only able to find coverage with a nonstandard carrier, paying more for less coverage than they needed.

“We were practically uninsurable,” said the company president. “Other brokers said, ‘There’s almost nothing we can do.’ “

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Holman disagreed. He knew of a standard carrier with an appetite for their business. He arranged for underwriters to do a loss control visit to better understand the actual exposures, as well as the measures the company was taking to prevent future incidents.

“Riley leveraged his relationships and brought the carriers out to see the operations and to show that the fatality didn’t tell the whole story,” said the company president.

The new program saved more than $100,000, rescuing the company from being slowly strangled by excessive premiums.

Crisis Averted

Linda Joski, CRM
Area Senior Vice President
Arthur J. Gallagher, Brookfield, Wis.

The Milwaukee Center for Independence was thrown for a loop with a substantial legislative change impacting the state’s workers’ comp law. The law specified that the entity providing financial management services would become the employer of record for workers’ comp purposes for workers providing long-term care benefits under programs administered by the state.

That put MCFI, a nonprofit, in the crosshairs, as the fiscal agent responsible for withholding income taxes for employees of one such program.

The law “would have meant we had to put 18,000 workers’ comp policies in place,” at an expense of about $2.9 million, said Rob Wedel, CFO and vice president of finance for MCFI. It’s a burden that could have buried MCFI. But Gallagher’s Linda Joski came to the rescue.

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“Linda settled everybody down and got the right people in place, connected [the carrier] United Heartland and the state and got everyone on the same page with a viable solution,” Wedel said.

Joski helped arrange one master program for all participants involved, eliminating the administrative burden of single policies. Joski also negotiated using MCFI’s experience mod of .72 rather than the typical 1.00 used for new entities — resulting in additional savings of 28 percent (about $2.3 million).

Joski’s dedication and creativity “saved the state of Wisconsin about $5 million … it was just phenomenal,” said Wedel.

Bringing the ‘Wow’ Factor

Machelle McKenzie, CRM, CIC
Managing Director
Crystal & Company, Houston

Machelle McKenzie’s clients tend to talk about her in extremes — but in a good way.

“If she ever leaves, my business goes with her,” said Cheryl Wyatt, director of human resources for Stronghold Ltd. in La Porte, Texas. “There’s nothing she can’t answer, and I never have to wait for a response. I literally send emails at 2 in the morning … and I actually get her at 2 in the morning.”

Wyatt’s company split into two entities in early 2016, a complex undertaking with a high volume of moving parts.

“We wanted all of our billing to be separate,” said Wyatt. “Machelle had to split out the cost by entity. In particular for workers’ comp, that’s not easy … we work in almost every state.”

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Wyatt was impressed with how quickly McKenzie was able to find a workable solution, not to mention how quickly she completed the project.

“She did it in a couple of weeks,” said Wyatt. “It would have taken me six months.”

Clients value McKenzie’s ability to assess every angle and identify substantive ways to help the business succeed.

For one client, McKenzie recently discovered and corrected a carrier reporting error, bringing the company’s experience mod down from .98 to a more manageable .80. For another, she got a letter of credit reduced from $990,000 to $200,000.

The Next Frontier in Claims Audits

Joe Picone, CPCU, AIC
Claim Consulting Practice Leader
Willis Towers Watson, Glen Allen, Va.

Jenny Novoa, director of risk management for The Gap, threw down the gauntlet for her broker, Willis Towers Watson’s Joe Picone: Help us find a better way to evaluate third-party administrators (TPAs). More specifically, Novoa wanted to measure TPA performance based on outcomes rather than using standard “best practice” audits.

“We had to figure out how to build a tool to do that,” said Novoa.

Picone rolled up his sleeves and dug in, recruiting additional stakeholders from Foot Locker, Saks Fifth Avenue and Corvel.

To build the new audit tool, Picone, Novoa and the team incorporated numerous factors into the claim process such as employee co-morbidities, failures in the return-to-work process and life events as well as the hiring process and performance management.

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They completed audits using both the new tool and the old tool, and compared the results, which turned out to be a revelation. Using the traditional audit tool, some claims scored high even though they had poor outcomes, while some with good outcomes had lower scores.

For example, a file that received a perfect “100” score on a best practice audit may have exceeded expected medical disability guidelines by 400 percent.

Using the outcomes-based audit tool, there was a far higher correlation between high scores and good outcomes. It’s a “very cool tool,” said Novoa — the first of its kind in the industry.

Rolling Into Claims Success

Dennis Tierney
Director of Workers’ Compensation Claims
Marsh, New York

Power Brokers love a challenge. Marsh’s Dennis Tierney got that and more when he took on Motivate International as a client. A global bike share leader, Motivate International partners with governments and brands in major cities around the world.

The company was at a crossroads after the acquisition of a troubled bike share operator. The acquired company, which didn’t have a risk management department, had amassed $10 million in claims in only three years.

“Our broker at the time was on cruise control,” said Grant Barkey, Motivate’s risk manager. “We needed somebody who was strong on claims, someone who understood our business.”

Barkey partnered with Tierney and his team at Marsh, and he is effusive when explaining how far things have come since then.

“My entire team is pretty rock star,” said Barkey. “[They] really turned around our claims and claims management.”

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One key hurdle, said Barkey, was that carriers didn’t really understand the bike share business, which is a fairly young industry, or its sometimes nuanced exposure. But Tierney got it, Barkey said, and strove to make sure that carriers could wrap their heads around it.

The company ultimately ended up with a new carrier, said Barkey, and Tierney has been instrumental in ensuring that the carrier has a solid handle on Motivate International’s exposures. The company has made incredible strides in closing out open claims and setting up special handling agreements with the carrier.

 Finalists:

Jeffrey Breskin
Director
Crystal & Company, Los Angeles

Carol Murphy
Managing Director and Casualty Growth Leader
Aon, Chicago

Thomas Ryan
Managing Director
Marsh, New York City

Teri Weber
Partner
Spring Consulting Group, Boston

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

The risk manager for Boyd Gaming Corp. says curiosity keeps him engaged, and continual education will be the key to managing emerging risks.
By: | May 1, 2018 • 4 min read

R&I: What was your first job?

I was trained as an accountant, worked in public accounting and became a CPA. Being comfortable with numbers is helpful in my current role, and obviously, the language of business is financial statements, so it helps.

R&I: How did you come to work in risk management?

Working in finance in the corporate environment included the review of budgets and the analysis of business expenses. I quickly found the area of benefits and insurance — and how “accepting risk” impacted those expenses — to be fascinating. I asked a lot of questions. Be careful what you ask for — I soon found myself responsible for those insurance areas and haven’t looked back!

R&I: What is the risk management community doing right?

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I have found the risk management community to be a close-knit group, whether that’s industry professionals, risk managers with other companies or support organizations like RIMS and other regional groups. The expertise of the carriers and specialty vendors to develop new products and programs, along with the appropriate education, will continue to be of key importance to companies going forward.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

As I’m sure many in the insurance field would agree, Hurricanes Katrina and Rita in 2005 changed our world and our industry. It was a particularly intense time and certainly a baptism by fire for people like me who were relatively new to the industry. This event clearly accelerated the switch to the acceptance of more risk, which impacted mitigation strategies and programs.

Bob Berglund, vice president, benefits and insurance, Boyd Gaming Corp.

R&I: What emerging commercial risk most concerns you?

The fast-paced threat that cyber security represents today. Our company, like so many companies, is reliant upon computers, software and IT expertise in our everyday existence. This new risk has forged an even stronger relationship between risk management and our IT department as we work together to address this growing threat.

Additionally, the shooting event in Las Vegas in 2017 will have an enduring impact on firms that host large gatherings and arena-style events all over the world, and our company is no exception.

R&I: What insurance carrier do you have the highest opinion of?

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With the various types of insurance programs we employ, I have been fortunate to work with most of the large national and international carriers — all of whom employ talented people with a vast array of resources.

R&I:  How much business do you do direct versus going through a broker?

We use brokers for many of our professional coverages, such as property, casualty, D&O and cyber. We are self-insured under our health plans, with close to 25,000 members. We tend to manage those programs internally and utilize direct relationships with carriers and specialty vendors to tailor a plan that works best for team members.

R&I: Who is your mentor and why?

I have been fortunate to have worked alongside some smart and insightful people during my career. A key piece of advice, said in many different ways, has served me well. Simply stated: “Seek to understand before being understood.”

What this has meant to me is try everything you can to learn about something, new or old. After you have gained this knowledge, you can begin to access and maybe suggest changes or adjustments. Being curious has always been a personal enjoyment for me in business, and I have found people are more than willing to lend a hand, offer information and advice — you just need to ask. Building those alliances and foundations of knowledge on a subject matter makes tackling the future more exciting and fruitful.

R&I: What have you accomplished that you are proudest of?

Our benefit health plan is much more than handing out an insurance card at the beginning of the year. We encourage our team members and their families to learn about their personal health, get engaged in a variety of health and wellness programs and try to live life in the healthiest possible way. The result of that is literally hundreds of testimonials from our members every year on how they have lost weight, changed their lifestyle and gotten off medications. It is extremely rewarding and is a testament to [our] close-knit corporate culture.

R&I: What’s the best restaurant you’ve ever eaten at?

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Some will remember the volcano eruption in Iceland in spring of 2010. I was just finishing a week of meetings in London with Lloyd’s syndicates related to our property insurance placement when the airspace in England and most of northern Europe was shut down — no airplanes in or out! Flights were ultimately canceled for the following five days. Therefore, with a few other stranded visitors like myself, we experimented and tried out new restaurants every day until we could leave. It was a very interesting time!

R&I: What is the riskiest activity you ever engaged in?

I am originally from Canada, and I played ice hockey from the time I was four years old up until quite recently. Too many surgeries sadly forced my recent retirement.

R&I: What do your friends and family think you do?

That’s a funny one … I am a CPA working in the casino industry, doing insurance and risk management, so neighbors and acquaintances think I either do tax returns or they think I’m a blackjack dealer at the casino!




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]