2016 Power Broker

Education

Creating Coverage Options

Charlie Herr Producer Arthur J. Gallagher, Kansas City, Mo.

Charlie Herr
Producer
Arthur J. Gallagher, Kansas City, Mo.

The Kansas budget crisis led to a drastic cut in education funding in the state, devastating school budgets. With a single carrier accounting for up to 90 percent of the property/casualty insurance market for schools, there was little chance of any school finding premium savings. Many schools went without coverage.

Charlie Herr’s solution: introduce a risk-financing pool. Herr set up the Kansas Educational Risk Management Insurance Pool within months despite significant red tape from the state, according to Roger Miller, business manager for pool member Rose Hill Unified School District 394.

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Participants in the new pool, which launched on July 1, 2015, realized immediate benefits, including: an average 26 percent reduction in premium; an average 500 percent reduction in property deductibles, including wind and hail-specific deductibles; 100 percent increases in collective liability limits, including general liability, school board legal and all other professional liabilities; and a potential dividend/surplus return of up to 13 percent of premium.

“This initial savings allowed us to hire two additional kindergarten teachers,” noted Clint Schutte, assistant superintendent for business/finance with Haysville USD 261.

“Mr. Herr has been great to work with, because he is working for us, not telling us what we should do,” observed Joel R. Lovesee, superintendent of Bluestem USD 205.

Working Tirelessly for Growth

Tyler LaMantia Area Vice President Arthur J. Gallagher, Itasca, Ill.

Tyler LaMantia
Area Vice President
Arthur J. Gallagher, Itasca, Ill.

An Indiana-based insurance pool for school systems was in trouble. Growth in the pool was stagnant; coverage disputes were thorny and the program’s overall design was in question.

What better time for Tyler LaMantia, an area vice president, and his colleagues to get to work?  Hired as the program administrators for the pool for 2015, LaMantia and the Gallagher team got things straightened out. LaMantia revamped the program, resulting in coverage enhancements — including increased property limits — and aligning the policies of the two excess carriers on the program to eliminate any gaps. He also went to bat for the pool and got some coverage denials reversed.

“What makes him special is that he can relate to lay people,” said Mary Roberson, the co-chairperson  of the Educational Service Centers Risk Funding Trust.

Not only did LaMantia get the pool structured properly, he got it growing again. From 31 members when LaMantia and AJG got involved, the pool now boasts 40 members.

“He worked tirelessly for growth and that didn’t come easy,” said Roberson.

Getting a big claim reversal overturned also signaled to the pool members that they had a worthy advocate in Tyler LaMantia.

So committed was LaMantia to the pool’s success that he reached out to the chairman of the pool, while traveling, about some questions from members on the restructuring of the pool’s finances … LaMantia was out of town for his wedding at the time.

Success Under Pressure

Greg Hunter Area President Arthur J. Gallagher, Boston

Greg Hunter
Area President
Arthur J. Gallagher, Boston

Clients count on Greg Hunter for services that go beyond a broker’s normal call of duty, and he delivers.

A university risk manager described the complication that the school’s lawyers created for Hunter as he was finalizing the institution’s property/casualty insurance renewal.

Under the terms of a lease agreement for a school building owned by a trustee, the school, not the trustee, bore the property risk. In the summer of 2015, the trustee was closing a complex property refinancing deal “that required some rather dated and archaic insurance language on the property policy,” the risk manager explained. But university lawyers forgot to advise risk management about the language until the final day of the school’s current policy, which also was two days before the refinancing deal was scheduled to close.

“We gave Greg absolutely no time to accomplish this,” the risk manager said.

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The results: “We were able to obtain the extra coverage — with a decrease in premium and a two-year rate guarantee.”

Risk managers for two other higher education institutions laud Hunter for risk management assessments he led them through at no cost. One was a tabletop drill to determine whether the college’s insurance and emergency response plans were sufficient to support students who study abroad. For another college, Hunter conducted a detailed ERM assessment and has followed up with continued support.

Michael and the Tornado

Michael Mchugh Area Senior Executive Vice President Arthur J. Gallagher, Itasca, Ill.

Michael Mchugh
Area Senior Executive Vice President
Arthur J. Gallagher, Itasca, Ill.

Sorting out the loss-fund contributions for a 175-member school district insurance pool can be an actuarial nightmare. Get it wrong and you create pain for school boards and superintendents.

Their pain levels are high enough already. That’s why members of the Collective Liability Insurance Cooperative think so much of Michael McHugh and his teammates.

They cite McHugh’s patience and professionalism in creating a debit/credit scenario that is fair to all parties.

“Mike is tuned in completely to the educational space,” said one risk management client.

And McHugh works every day to build that crucial sector knowledge, trying to learn about at least one new topic or add a new nugget of educational sector information weekly.

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McHugh takes a paternalistic approach to his work. He looks after an education insurance pool like it’s “his baby,” according to a source, but is also willing to step in and help calm an emotional parent. Such was the case when a child was injured at a school-sponsored event and triggered a student accident insurance payment.

Even when a tornado tore the roof off of a high school, blew out windows and damaged athletic fields, McHugh and his team came through.

With just two weeks until the beginning of the school year, McHugh’s prompt service of the account meant that the roof repairs took place in just three business days.

Ninety percent of the damage was mitigated before the school year started.

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]