Risk Insider: Jean Nkamdon

Lessons From The Trenches: Lesson #2

By: | July 7, 2017 • 3 min read
Jean Nkamdon is the Risk Management and Compliance Manager at The Washington Post & Companies, which publishes the Washington Post. Nkamdon, a CPA, CFE and a RIMS-CRMP, has both domestic and international cross industries audit, attest, and risk consulting advisory experience. He can be reached at [email protected]

In my years in risk management I couldn’t help but find three constant lessons that keep popping up for me and every time I ignored one of them I paid for it. In my last post, I addressed Lesson #1: Know the Odds.

Now the second lesson: Never take too much risk for very little reward

It is well understood that risk is intrinsic to any business undertaking, but the true quandary of threading the risks vs. reward equation comes down to understanding how much risk can an organization realistically afford to bear in the accomplishment of its objectives. To this point, it is often said that according to Warren Buffet, the first rule of investment is capital protection and the second asks to refer to rule number one. In risk management parlance, the Buffet rule would equate to the risk management mission to first and foremost protect their organization’s value.

Advertisement




Organizations are confronted in every aspect of their businesses with the decision as to what amount of risk they could reasonably retain, transfer or avoid altogether. Because risk professionals are in the business of protecting their organization’s value, they would be better served when evaluating risks and potential risk treatment options to heed the oracle of Omaha advice.

As an illustration, organizations of all sizes are now confronted with the decision of whether to buy cyber coverage or not. In considering whether cyber coverage is an option, risk managers would have to understand the amount and nature of data held by their organization (Personal Identifiable Information, Personal Card industry information, Private Health Information).

My own observation in this area is that renewal discussions seem most often centered around premium or benchmark with peers. While these are valid data point in the analysis, in themselves they are not the magic bullet…

With a good understanding of their organization’s data, risk professional can enlist their brokers and or carriers to understand the kind of solutions available in the market for the type of information at risk. Savvy brokers would know and understand what solutions the markets can provide. This is where it would be a good idea for those in charge of risk with the help of brokers and or carriers to compare the solutions available and see whether there could be a solution tailored to their specific risk.

My own observation in this area is that renewal discussions seem most often centered around premium or benchmark with peers. While these are valid data point in the analysis, in themselves they are not the magic bullet. If risk transfer is ultimately considered merely on the basis on these without considerations to actual risks facing the organization, then the organization might end up buying too much or too little coverage which in either case are ultimately detrimental to the organization.

The worse scenario would be to find out after a loss that there is not sufficient coverage or that the existing policy has little to no coverage for the type of claim at hand. The key takeaway is that those in charge of risk are to help their organizations take calculated risks rather than assuming risks by default.

I’ll cover lesson #3 in a future Risk Insider article — stay tuned.

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.

Advertisement




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.

Advertisement




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]