Risk Insider: John Devereux

Data: The New Player

By: | July 25, 2016 • 3 min read

John Devereux has more than 25 years of actuarial experience and is Chief Actuary for Ryan Specialty Group, supporting its subsidiaries RSG Underwriting Managers and RT Specialty. He can be reached at [email protected]

The insurance industry is on the brink of transformation. The unprecedented amount of capital present (including alternative capital) and the rash of consolidations in brokerage firms and insurance enterprises (U.S. companies, international companies, Lloyd’s syndicates) are among the reasons.

Another transformative trend is that the insurance distribution system has a new participant — data. Data has always been present, lingering behind the scenes, but now data is demanding to be a bigger part of the equation.

Recent reports show that data tools have become more accessible, more efficient and easier to use now than ever before. Data presents itself under a number of different guises — Big Data, Predictive Modeling, and Analytics are just a few.

Regardless of what form data takes, data is and will be the engine that drives market forces now and in the future.

Analytics based on predictive modeling have already transformed personal lines insurance. A number of companies with significant volumes of data and many intelligent resources use data and telematics to develop a custom rate for each individual based on a host of characteristics and actual driving habits.

While the leap from personal lines to commercial lines and then to specialty commercial lines may not be intuitive or even seem likely, it’s happening.

Regardless of what form data takes, data is and will be the engine that drives market forces now and in the future.


Commercial credit scores, advanced mapping techniques, the use of significant internal and external databases, aerial inspections by drones, and other such tools are already in use.

So what does this mean for the insurance marketplace? It means that as these tools and advanced data and analytics continue to make their way into the marketplace, those employing them will be better suited to make pricing and underwriting decisions.

They will be able to produce more appropriate, customized pricing or, perhaps more importantly, to select the best risks and avoid lower quality risks at market prices. They will be able to leverage these tools to quickly identify winning strategies and specific opportunities.

Conversely, it means those who don’t use such tools will lag in response time, delay in understanding issues and nuance, and ultimately lose ground in the market and be adversely selected against.


Innovation is critical to success in the insurance industry. Innovation in products and services, innovation in delivery, etc., innovation in the way we look at and analyze risk the tools we use, the data that we leverage, the processes we employ — will all be critical to success.

All of the above isn’t to say that automated tools and analysis will replace the need for quality underwriting. However, these types of tools and analysis are here to stay and their impact will continue to grow and be felt.

With that in mind, we need to welcome data to the conversation and continually explore novel ways that data can help us make better decisions, identify the right risk, and create a differentiated approach for our clients.

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.


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.


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]