Risk Scenario

A Crushing, Complex Claim

A young baggage handler's injury claim is crushing - literally.
By: | July 26, 2012 • 11 min read
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

Part One


Jerry McShane hustled as fast as he could through Chicago’s Midway Airport Concourse C on his way to his job as a baggage handler for Vista Airlines. He was late to work, for no other reason than he had spent a late night at Wrigley Field.

His beloved Cubbies had drawn out the agony, but had once again lost to the rival Milwaukee Brewers.  This time the score was 4-3 in 13 innings.

As he jogged, Jerry checked to see if he had his earplugs and a backup set. You didn’t want to get caught on the tarmac without them.

Once out on the tarmac, Jerry and his buddies shouted condolences to one another over the fate of their Cubs and took turns teasing each other about their work habits. Jerry, 19, was invigorated despite the Cubbies’ loss.  The hustle and flow of the airport was exciting to his young eyes and ears; people dressed up and going places.

It was a busy day on the Midway tarmac. The average passenger might not notice, but parts of Terminal C were being renovated as tractor trailers ferried new HVAC systems and other hardware for the new stores and restaurants that would serve the upgraded terminal.

Jerry was about a third of the way through his workday, slinging luggage onto the conveyor belt that bore them into the belly of a 747, bound for Miami, when he looked up and saw a girl with shimmering chestnut hair leafing through a magazine in her window seat.


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Her hair was straight and fine, and was cut in an A-line bob so that it fell over her face when her head was down.  When she brought her head up, she tossed her hair back and caught Jerry’s eye in that moment.

She smiled at Jerry, she was freckled and her blues eyes were sparkling. Jerry smiled back.

“Wow,” he said to himself inside.

Just then the roar of an incoming 747 rattled Jerry and  he not only lost eye contact with this beautiful woman that he would never see again but momentarily lost his bearings.

He knew where the baggage cart he was unloading was. But as he broke his gaze with the girl on the plane, he turned and stepped between two parked baggage trucks, right into the path of an oncoming semi.

The steel fender of the semi slammed into Jerry, smashing his left hip and driving him under the second and third set of the truck’s wheels. Jerry screamed so loudly his co-workers heard him through their protective head gear.

The severity of Jerry’s injuries were immediately, gruesomely apparent.  Jerry’s body twitched involuntarily as he entered shock. Deep, dark splotches of blood stained his jeans where his knees had been crushed.

One of Jerry’s fellow workers started ripping up his own outer shirt to make tourniquets for both of Jerry’s legs. The red-haired girl could only watch from her plane window in nauseated horror at what had just happened.

Part Two


There may be insurance claims adjustors who never get out of the office to see a patient but Nancy Dunning, a workers’ compensation claims adjustor for the Evergreen Insurance Co., isn’t one of them.  Nancy cares about the injured workers she encounters and something about Jerry McShane’s case had really hooked her.

The young, vibrant baggage handler had lost both of his legs below the knee due to the injuries he suffered on the Midway tarmac. His left hip injury was also severe and complicated.  Jerry required additional surgery to place pins in the fractured bone.  In accordance with standard procedure in these matters, Jerry had first been sent to an inpatient rehab center post-surgery where he was treated and trained to adjust to his new life.

In the weeks following Jerry’s accident, Nancy had had a myriad of issues around his case to address through phone calls and e-mails, such as lining up home healthcare, accessing durable medical equipment and his transportation and home modification needs.

In rehab, Jerry had been measured for a wheelchair that was suited to his short-term needs and an appropriate rehabilitative mattress, engineered to avoid bedsores given his severely damaged legs and broken hip.  Nancy was also working with Jerry’s physiatrist, or rehab physician, on an order for prosthetic devices that would take the place of his lost lower legs.

Nancy had arranged for a nurse, that if all things went well, would only need to visit Jerry for six months or so.

Other details that were in the works included negotiations for a van that someone with Jerry’s disability could drive safely and effectively. Modifications to the family carport to fit the van were being engineered and ordered.  Changes to the exterior of the McShane house were also being drawn up.


The family lived in a quasi-rural area and significant modifications to the landscaping and home entryways were going to have to be undertaken for Jerry to be able to move in and out of the house effectively on his new legs.

The prescribed drug regimen, at this point, looked pretty standard; a pain killer and an anti-anxiety medication to ease Jerry through those psychologically challenging months ahead as he adjusted to life without his lower legs.

Finally, Jerry was ready to come home and make a go of it. Nancy was in the Chicago area on business anyway, and decided to drop in and see how Jerry was doing.

She wanted to get a better idea of the interior layout of the house to see how best to implement any further durable medical equipment purchases. And besides, it never hurt to get a first-person view of things.

Nancy tried a smile when she first entered the living room of the McShane residence and Jerry smiled back from the wheelchair he sat in next to the family couch.  Jerry’s mother Suzanne, who had let Nancy in the front door, was less forward.

“Hi Jerry, I’m Nancy Dunning, the person you spoke to last week.”

“Hi,” Jerry said.

There was the briefest of awkward pauses as Nancy’s eyes passed to where Jerry’s lower legs used to be.

“So how’s this chair working out?” Nancy asked quickly, to fill in the awkward gap.

“Not bad,” Jerry said.

“Doesn’t go all that fast,” he said and Nancy and Jerry laughed at Jerry’s attempt at humor.

“I don’t see what’s so funny about all of this,” Suzanne said with her arms crossed.

A red flag went up inside Nancy when she heard Suzanne’s tone. She’d dealt with these cases where family members became obstacles to good care. She hoped this wasn’t one of those families.

But after some brief back and forth, Suzanne agreed to let Nancy have a look around. What Nancy saw concerned her, and as busy as she was, it added to her doubts that she was going to have the time to give this case the attention it needed.

Jerry’s bedroom looked crammed, holding a walker, a wheelchair and some fitness equipment that had been ordered for him. Nancy didn’t like the arrangement, it looked cluttered and unsafe and could lead to further injury.

The new shower was okay, not great, but there was only so much you could do in that space. More renovations might be needed.

The kitchen really concerned Nancy. It, too, was too tight. Suzanne canned fruits and vegetables and had boxes of jars in there and it too looked cluttered and unsafe.

As she got to her car, the image of a young, game Jerry smiling and trying to make the best of things stuck with her.

“He’s a good kid, he might make a pretty good go of it,” she thought to herself.

Then her mind flashed to Suzanne, her arms crossed, standing disapprovingly to one side as she had tried to interact with Jerry.

Nancy just exhaled.

“No telling with that one, really,” she said to herself as she flipped her sunglasses down and drove away from the McShane’s.

Part Three


From her desk in New Jersey, the billings in the Jerry McShane case and dozens of others were coming at Nancy Dunning like a large, dark wave.

Three times in the past calendar year Jerry McShane had been hospitalized, once for pressure sores, once for respiratory problems and a third time for an inpatient rehabilitation stay, a sort of tune up in an effort to get Jerry back on track.

His hip hadn’t healed well and it was interfering with his ability to walk with his prosthetics effectively enough to get the proper exercise.

Nancy had just opened the bill from Jerry’s latest rehab stint, a 12-day stay that had run about $280,000.  Nancy looked at the bill and exhaled.

Her phone was ringing. She couldn’t pick it up, not now. On her computer monitor, e-mail messages were popping up about every five seconds, about half of them marked urgent.

To her left was a huge stack of files that needed attention. She just didn’t have time to dig into this McShane case, as expensive as it was getting.

Damn it, she’d have to make some time. Nancy looked at her phone to see if Evergreen’s nurse case manager Adrienne Moore was off the phone; she was.

“Hey Nancy,” Adrienne said as soon as she picked up the phone.

“What’s the latest on Jerry McShane, any new data?” Nancy said, drumming her fingers and looking distractedly at the pile of work she was ignoring.

“Yep, I have it but you’re not going to like it” Adrienne said.

“Go ahead,” Nancy said.

Adrienne reported that Jerry’s weight was up to 230, from 170 at the time of his injury. In addition to sores on his damaged left hip and lower back, Jerry was now suffering from open wounds on the top of his legs.

Jerry’s pharmacy intake had also ballooned.  His pain killers were now joined by Correctus, an anti-depressant, Flamovin, a nerve pain treatment, Serentin, a muscle relaxant and Altidinum, a low blood pressure medication. His mother was pushing for an increase in opioid prescription frequency and volume.

“Do we know if he’s using that power lift we got him two years ago?”

“I don’t think he is using it,” Adrienne said.

“Why not?”

“I asked his mom…wouldn’t tell me,” Adrienne said.

“Okay, thanks.”

Nancy hung up, frustrated for the umpteenth time by Jerry’s mother.

“I do not have time for this,” Nancy said out loud as she stared out the window.

She had a quarterly report to deliver to her boss by the end of the week and it was Wednesday afternoon. No time for McShane, no time for anything.

She popped open the file that held her quarterly report.  Nancy was responsible for 200 lost time files with 40 permanent disability cases in red. She looked at the McShane numbers. She couldn’t help but look at the McShane numbers.

There were $750,000 in annual costs this year alone on a case that should be just $250,000 annually. She knew the case was sinking but she just couldn’t get to all of it.

There was nothing for Nancy to do but to complete her quarterly report, which she just had to get in, and face the consequences.


Nancy Dunning is a highly competent professional who cares deeply about the injured workers whose cases she manages. But even the best intentions can become undone when busy professionals get overwhelmed by complex medical care cases with complicating family dynamics.

1. Measure once: Too often, payers and insureds are content to treat the purchase of durable medical equipment like a commodity purchase. Adjustors and claims managers who make sure that an injured worker and his/or her home are measured before equipment is purchased and delivered will get better healthcare results and lower costs in the long-term.

2. Reset if necessary: It’s a known fact that family dynamics can complicate and undermine quality of care for a permanently disabled worker. In cases where an in-home nurse or other caregiver is caught up in family dysfunction, it is sometimes necessary and advisable to remove that care giver so the family can be re-educated and given proper boundaries in the care of a permanently disable family member. Then a new care giver can be introduced to the corrected environment.

3. Do not lose touch: Managing complex medical care cases successfully means more contact, not less. Companies who are serious about getting a handle on these claims that can drive 80 to 90 percent of costs in some cases must marshall the resources to make sure that lines of communication between the patient, care givers and claims adjustors and managers are open and functional.

4. Face economic reality: Payers and insureds need to face some facts. Workers’ compensation carriers and third party administrators just don’t keep nurses on permanent disability files for the length of time that they used to. This means that case managers don’t have eyes and ears on cases to the degree that they use to and have to be much more proactive about getting good information on cases in a timely manner.

5. Don’t treat adjustors like mules: In-house adjustors can only handle so much. All companies need to watch costs, but the cost of many a complex care case is going to far exceed the human resources savings a company might achieve by cutting staff to the bone and overburdening case adjustors.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.


Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.

R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.


We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?


Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.


Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now an where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.


More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

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