Sponsored Content by The Hartford

Collaboration at the Crossroads of Safety and Technology

Leveraging what new technology has to offer calls for greater collaboration on the job site.
By: | October 3, 2017 • 7 min read

Rapid-fire advancements in technology can leave many business sectors with whiplash trying to keep up.

The construction industry, however, has largely been immune to tech disruption. The means and methods of erecting a building, bridge or any other structure have more or less remained the same over the years.

But change is on the horizon.

New technology — like building information modeling (BIM), wearables, and automated machinery — is growing more prevalent on job sites.

These modern tools promise to boost efficiency, help address the skilled labor shortage and ultimately keep workers safer. Construction remains, after all, one of the riskiest industries from a safety standpoint.

But new technology also presents new risks if not thoughtfully implemented. Project owners, contractors and workers all must understand how a piece of technology works and how it benefits every stakeholder for it to be effective.

To harness the promise of construction technology while minimizing its downsides, contractors and their insurers should adopt a collaborative approach to understand how new tools fit into a project’s workflow, which encompasses everything from production processes and schedules to safety and risk management programs.

“Technology is changing the construction industry,” said Tom Boudreau, vice president of construction insurance for The Hartford. “Without strong collaboration and understanding of a common goal, safety and a good work product can’t be accomplished.”

Technology Promise and Perils

Dennis Gardner, risk engineering director, The Hartford

Compared to traditional paper blueprints, BIM models provide a more detailed, interactive and 3D view of a project. Digitizing the plans has given way to more innovative building methods.

“With 3D BIM technology, we’re seeing much more off-site prefabrication being done in manufacturing warehouse environments,” said Dennis Gardner, risk engineering director, The Hartford. “This can reduce risk because much of the work is done at ground level, eliminating the need to put workers on ladders or in lifts.”

But getting pre-fabricated modules on-site creates unique challenges.

Pre-fabricated units that include interior designs should not be exposed to weather, which makes transporting, delivering and storing them risky. Collaboration is paramount to using these models effectively.

“In the past if your schedule was off by a day or two, there was typically a storage area for raw materials. But with a finished product that really should not be exposed to the elements, you have to be ready for when that unit arrives on site,” Boudreau said. “That requires a high level of coordination between the manufacturer and workers on site to keep schedules in sync.”

Wearables and GPS trackers similarly provide big safety benefits when workers and managers are on the same page.

A superintendent or foreman could, for example, apply geofencing to keep workers out of high hazard areas like elevated platforms if their work does not require them to be there. If a worker crosses the boundary, an alert may be sent directly to their wearable device, or to a safety manager on site. GPS tracking can also alert a manager to a worker’s location if they have fallen or otherwise injured themselves.

To some workers, though, wearing a tracking device can feel like Big Brother is watching, waiting to pin them for violating a safety protocol.

“Collaboration and communication is key to help contractors and laborers understand that the purpose of the technology is not to catch them doing something wrong, but to help them work safer and more efficiently,” Gardner said.

Automated and remote-controlled machinery can also improve safety by keeping workers away from high risk areas and activities.

“Semi-automated masonry machines can build a masonry wall semi-automatically with only minimal actual worker interface, reducing the risk of injury from material handling strains and injuries from falls,” Gardner said.

“Years ago if you were drilling in a quarry or on a construction project with a rock drill, the operator was standing right at the drill head operating the controls that applied the pressure, the rotational spin and the water control. Now that can be done remotely to eliminate the exposure to loud noise, the material handling of the heavy drill steel, and of course the exposure to silica.”

But any new machinery presents risks if handled improperly. The lack of labor skilled in operating new, high tech equipment — combined with inadequate training — exacerbate these risks.

Labor and Training Shortage

Tom Boudreau, vice president of construction insurance for The Hartford

“The economic downturn really diminished the training resources offered by vocational schools and unions, which leads to less trained folks coming onto a job site. That’s a dangerous situation from a safety perspective and also from a product perspective,” Boudreau said.

Younger workers also tend to learn differently, utilizing technology where their veteran counterparts relied more on gaining hands-on experience in the field. Older workers, perhaps feeling threatened by the new technology or newer and younger workers coming onto the scene, are at times resistant to help train them.

“We have been disappointed, in some cases, with the lack of willingness of some of the older generation to teach the new generation necessary skills,” Boudreau said. But where technology widens the divide between the young and the experienced, it can also provide a new training avenue.

“Some of the wearables show some promise in that they can remotely connect a less experienced person in the field with a more seasoned worker, who can help to troubleshoot whatever issue the trainee is encountering.” Gardner said. “In some cases, the wearable device can provide a live view of the situation at hand.”

GPS units, BIM models, and digitally automated equipment may also provide data on workflow processes and safety vulnerabilities. Gaining additional insight into these areas will likely prove critical as construction timetables further compress and the labor shortage persists.

“We have to shift to a proactive safety approach. We have to think about what risks we’ll face weeks or months ahead in the schedule.” — Dennis Gardner, risk engineering director, The Hartford

A Collaborative Approach

Leveraging what technology has to offer — from safer work sites to better data and increased efficiency —calls for collaboration on the job site.

This is where The Hartford’s dedicated construction risk engineering consultants take a leading role.

“We have to move from a traditional inspector role into more of a consultative role,” Gardner said. “We want to understand the dynamics of a company, their safety programs, and how they’re using automated tools or connected technology.”

Inspectors typically only spot point-in-time problems while they’re walking a job site. They don’t necessarily have insight into systemic issues that lead to safety shortfalls, or hazards the company may face in future phases of construction.

“Traditional inspection approaches are reactive and punitive. We have to shift to a proactive safety approach. We have to think about what risks we’ll face weeks or months ahead in the schedule,” Gardner said.

To help accomplish this proactive approach, The Hartford’s risk engineering consultants meet with contractors before a project even begins to identify phases of construction or periods in the schedule where risk may be highest. They discuss ahead of time what will be done to mitigate the risk, including evaluating the safety program. They can help project managers implement things like wearables if there is a desire to use them.

“The use of technology, especially the newer technology that’s been developed in the last decade, is eventually going to lead to much safer job sites,” Boudreau said. “But it all starts with a collaborative approach.”

For more on The Hartford’s construction offerings, visit https://www.thehartford.com/construction.

SponsoredContent

BrandStudioLogo

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




The Hartford is a leader in property and casualty insurance, group benefits and mutual funds. With more than 200 years of expertise, The Hartford is widely recognized for its service excellence, sustainability practices, trust and integrity.

More from Risk & Insurance

More from Risk & Insurance

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.

Advertisement




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.

Advertisement




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?

Advertisement




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.

Advertisement




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 and 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.

Advertisement




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]