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A Year of Opportunity for U.S. Manufacturers

2018 will present both challenges and opportunities for U.S. manufacturers.
By: | February 1, 2018 • 5 min read

2018 is shaping up to be a year of historic shift for U.S. manufacturing. Tax reform, favorable regulatory changes, advances in industrial technology, and an improving economy and unemployment rate all present opportunities for organic growth.

“Many manufacturers expect to increase sales in 2018, both domestically and abroad,” said Stacie Graham, Senior Vice President and General Manager, National Insurance, Central Division, for Liberty Mutual Insurance. “Recent tax and regulatory changes in particular present opportunities to increase exports to international markets.”

But there are persistent operational challenges that could block manufacturers from seizing these opportunities. An industry-wide talent shortage and skills gap hinder growth potential for U.S manufacturers. To overcome them, apprenticeships and efficiency tools like co-bots could be the way forward.

Talent and Skills Shortfall

According to a 2017 report by Deloitte and The Manufacturing Institute, the U.S. manufacturing industry could be short by about two million workers over the 2015–2025 period.

“The labor participation rate will continue to drop through 2026 according to the Bureau of Labor Statistics. This shift is largely driven by aging workers who are retiring—and there isn’t enough new talent in the pipeline to replace them,” Graham said.

The manufacturing sector — like many others– needs to invest more in attracting and training talent. Some of the difficulty could stem from what Graham called an “image problem.”

“There’s a perception that manufacturing is not a viable career path, because automation is taking over, or because it’s dangerous, or simply because many jobs on the factory floor seem repetitive,” she said. Less than five in 10 Americans surveyed by Deloitte believe manufacturing jobs are interesting, rewarding, clean, safe, stable, or secure.

The increasingly technical nature of manufacturing work may also present challenges, as potential job candidates may not have the right skills.

Manufacturers are feeling the pinch. In a recent survey by the National Association of Manufacturers, companies indicated that attracting and maintaining a quality workforce is a top challenge.

Now is the time for manufacturers to address these operational challenges so they can be successful in the long term.

Bridging the Gap

When it comes to training new skills, earlier is better for both employees and businesses. Manufacturers that invest in apprenticeship programs targeting younger applicants can help to teach the necessary skills to a pool of talent early in their career journeys.

For example, Germany adopted an apprenticeship model in the mid-2000s, which helped decrease the youth unemployment rate from a high of 15.9 percent in 2005 to 6.6 percent in 2017. In the U.S., the youth unemployment rate reached 10.1 percent in 2017.

“There is a big opportunity to tap into that pool,” Graham said. “And if apprentices have good experiences, they’ll spread the word among their peers, helping to cultivate a continuing pipeline of talent.”

Talent development and training may not completely bridge the gap created by a mass exodus of retirees, and that’s where collaborative robots —or co-bots — come into play.

Co-bots: 5 Key Areas to Address

As the name suggests, co-bots work alongside human workers, not replace them entirely.

By performing tasks that pose ergonomic or other safety risks to employees, co-bots can free up employees for higher-level thinking tasks like quality control or the actual programming of co-bots.

“Co-bots boost worker efficiency and can reduce the total number of employees on the floor,” Graham said, but they don’t come without their own challenges.

Brokers can play a key role in helping their clients take advantage of the efficiency gains promised by co-bots while mitigating the risks.  Here are five areas brokers should address with their clients to help them effectively implement co-bot technology:

  1. Safety: Have you conducted a risk assessment to make sure employees know how to safely operate and work side-by-side with co-bots? Using co-bots correctly should reduce workers’ exposures to more dangerous tasks, but misuse could place employees in harm’s way.
  2. Product Liability: Are co-bots producing materials of consistent quality? If programmed incorrectly, co-bots could produce faulty work that increases product liability exposure.
  3. Contract Language: Have you consulted with legal counsel to put contracts in place among the co-bot manufacturer, programmer, and end user to assign liability appropriately should machinery fail?
  4. Contingency Planning: Is there a backup plan if the factory loses power? Are you able to quickly repair or procure co-bot machinery if needed?
  5. Insurance Coverage: Do you have appropriate coverage limits on property, equipment breakdown, business interruption, and operational replacement costs to account for changes to your operation?

The Right Risk Partner

The right insurer can help brokers address these areas and help their clients take advantage of the business opportunities ahead.

Liberty Mutual’s team of risk control consultants can help create company-specific safety checklists to help ensure that co-bots don’t present a bigger threat than opportunity.

“Members of our risk control team specialize in manufacturing. They sit on health and safety committees and take part in discussions about standards for industrial robots and co-bots,” Graham said. “They help ensure we’re keeping up with industry changes so we can provide the right guidance.”

Industry-specific expertise is complemented by broad range of coverages, from standard to E&S lines, offered by Liberty Mutual and Ironshore, now a Liberty Mutual company.

“We have such a wide breadth of products available for manufacturers, from small and mid-size to very large. Whether it’s a guaranteed cost policy or a loss responsive policy, we can build a program that makes the most sense for that company,” Graham said.

Liberty Mutual also offers specific endorsements for industrial equipment, metal, plastics, and food manufacturers, including commercial general liability enhancements and E&O coverage claims-made and defense within limits.

“Our job is to make it easy for brokers to find the right mix of coverage and services their clients need to be successful. “We’re able to do that with our risk control resources and flexibility in building program structures that work.”

To learn more, visit https://business.libertymutualgroup.com/business-insurance/industries/manufacturers-insurance-coverage.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.




Liberty Mutual Insurance offers a wide range of insurance products and services, including general liability, property, commercial automobile, excess casualty and workers compensation.

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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]