New CEO for Optum Workers’ Comp and Auto No-Fault Shares Her Vision for the Future

Appointed this spring, Jeannine Foster details how she believes the business has grown stronger in recent years.

By: Courtney DuChene | November 30, 2022

Since becoming Optum Workers’ Comp and Auto No-Fault’s president and CEO this spring, Jeannine Foster has been focused and taking action.

Under her leadership thus far, the company has unified its structure to become more functionally focused, reaffirmed its commitment to service and caring for injured persons, and increased the number of women in executive leadership positions by 20%.

And, she’s just getting started. Foster’s optimism and excitement to drive the company’s mission of making the workers’ compensation and auto no-fault claims experience better, for everyone, is palpable.

Risk & Insurance® sat down with Foster to discuss her career path, recent trends in workers’ compensation and auto no-fault, and her vision to grow the business and serve the needs of its clients. The following conversation has been edited for length and clarity.

Risk & Insurance: Jeannine, to kick it off, while you were newly appointed as the CEO of Optum Workers’ Comp and Auto No-Fault earlier this year, you are not new to the industry. Can you tell us about your path to this point?

JF: Yes, I entered the industry nearly 20 years ago with Third Party Solutions, which was based out of Memphis, Tennessee. At the time, my job was to educate pharmacy networks and providers about our third-party billing product and up and coming workers’ comp pharmacy benefits management (PBM) offering.

As the company grew and expanded through acquisitions, we began to offer end-to-end claims management to include pharmacy benefits, ancillary services, managed care services (including medical bill review and PPO solutions) and settlement solutions.

Throughout this time, I spent many years in account management and market-facing roles helping to grow, manage, and maintain our client base and networks. Eventually, I took the lead, both operationally and strategically, managing various teams before I assumed my current leadership role in what we now know as Optum Workers’ Compensation and Auto No-Fault.

R&I: How do you think your experience working with clients affects your perspective on this business?

JF: My experience working directly with clients greatly impacts my view and the lens by which I evaluate and make decisions and partner with our leadership team. My foundation is based on working with clients, network providers, and internal teams—making note of their needs and goals and then taking action.

When I expanded my career to lead internal operations, I blended those skills and experiences to determine how we as a company can collaborate to devise solutions that add value to all stakeholders, but especially to our client base.

R&I: How do you feel the workers’ comp and auto no-fault industries have changed in recent years? What are you doing to respond to those changes?

JF: There’s obviously been a lot of evolution in workers’ comp and auto no-fault over the last few years. I think we all recognize that the pandemic was a game changer and altered the way we interact with our partners — whether it’s clients, network providers, or our industry partners. Since many of our partners and contacts are not reporting into physical offices, we, like many others, had to find new ways to connect and communicate.

But beyond that, the industry is seeing an increase in safety programs and an increase in managed programs for all services — these emerged as part of the natural evolution of the industry.

We partially responded to this with a division reorganization.

Critically, we had to determine how we were doing from an overall service standpoint, and rethink how to pivot and improve our models to best fit the individual and unique needs of each of our clients, regardless of type or size. Our new organizational vision brought all functional areas aligned under singular leadership. Whether our clients are partnering with us within pharmacy, ancillary, managed care services, medical bill review, PPO and/or settlement solutions, our coordinated, functional approach allows us to better respond to their needs. At the same time, we maintained the core values of our organization that transcend all our services and programs, such as overarching clinical oversight so treatment is appropriate and effective, data-driven analytics to better identify potential issues and guide recommendations, and varying networks that provide injured people convenient access to care.

We’re also seeing an increase in legislative activity on a national front, as well as state by state. The process for these changes can be slow, but their impact can be big − and Optum is ready. We have a strong policy team that is immersed in the world of regulation and compliance. They have a handle on both historical trends and current events, and while they don’t have a crystal ball, the trends and constant pulse help us see what may be coming. With this, we keep our clients informed of the potential impact to their business and help prepare for the future, as best as possible.

These changes are helping us focus on injured persons in a different way, and better understand and respond to their end-to-end needs.

R&I: What is the impact of being a part of greater Optum?

JF: As part of greater Optum, we leverage the company’s strength, stability, and resources. Plus, we have access to the advancements and innovation Optum Rx is driving. All of this provides for meaningful opportunities to collaborate and expand our skill sets.

Yet, as our own division, we can also showcase and build on our leading expertise in the workers’ comp and auto no-fault industries with solutions that best meet the needs of our clients and the injured persons we all serve.

This sentiment is echoed by Optum Rx CEO, Heather Cianfrocco. “Collaborating across our Optum businesses, including Workers’ Comp and Auto No-Fault, and sharing insights and resources helps us improve every aspect of care and deliver a better experience for our customers,” states Cianfrocco. “Collectively we are all working towards the same goal – to help people live healthier lives and make the health system work better for everyone.”

R&I: With all the continuing industry changes, what does this tell us about Optum?

Optum is laser-focused on doing the right thing for our clients and the injured persons we serve and…we are always listening—to our clients, our employees, and the industry. From this, we adapt and are not afraid to make changes or alter our practices when needed to accommodate our clients’ or market changes.

As a company that has been in the workers’ comp market for more than four decades and auto no-fault for two decades, Optum is a strong leader in this industry. Our experienced and dedicated team understands the intricacies of our markets and the unique needs of our clients, and we continue to deliver expertise, value, and continuity through our products and services. We remain focused on helping to provide appropriate and effective care for injured persons while building and enhancing our client partnerships. &

Courtney DuChene is a freelance journalist based in Philadelphia. She can be reached at [email protected].

Why Insureds Might See an Uptick in M&PL Claims

George Schalick, Jr., Senior Vice President of the Management and Professional Liability Division, Philadelphia Insurance Companies

The current soft market might come as a bit of a surprise as it does not track with previous underwriting cycles and economic conditions. Afterall, many privately held and non-profit organizations struggled during the early days of the pandemic with shutdowns and rapidly declining revenues. But the Government assistance programs, like the Paycheck Protection Program loans, helped keep many afloat during the tough times.

“During COVID many organizations stopped doing business until they were able to sort out all of the health and safety challenges,” Schalick said. “They were forced to lock down, but then all the government assistance programs allowed them to keep people employed. The increased volume of claims we anticipated we would see coming from the lockdowns and restrictions that were imposed upon businesses in the U.S. didn’t manifest at first.”

“Just because there wasn’t an onslaught of reported claims at the beginning of the pandemic, doesn’t mean the circumstances that would give rise to a claim being reported didn’t occur. Courts and the judicial system were closed or slowed and now that they are back open, we’re starting to see the circumstances that occurred during the COVID lockdowns becoming claims today,” Schalick said. “Litigation is progressing.”

Added to the delayed pandemic litigation is a concern over newer claims that might be filed as the country inches toward an economic downturn. Though a recession was avoided in 2023, experts think a soft dip could occur in 2024, with 76% of economists saying there’s a 50% or less chance of an economic downturn this year — that almost always results in more management liability claims.

“During the Great Recession in 2008, we saw an almost immediate spike in claims because of the economic conditions and the pressure it placed on organizations. They were making personnel changes with significant belt tightening almost immediately.” Schalick said.

What’s in Store for M&PL Policy Rates in 2024?

Despite an uptick in claims and increased economic uncertainty, management liability rates haven’t increased, resulting in market-wide pricing levels that may not meet the increased pressure of rising settlements and jury verdicts.

“Rates are going the other direction and settlement values are not falling,” Schalick said.

The mismatch between rates, claim frequency and severity is, in part, because carriers experiencing the dramatic soft market in the public D&O market are seeking premium gain in the private and non-profit market.

“In the public company market, the rates have been decreasing significantly. The rates were increasing in the private, not-for-profit market, and rightfully so, but there’s a desire to supplement overall mid-size D&O for carriers who also write private not-for-profit, and they see that as an opportunity to aggregate premium,” Schalick said. “So the always competitive landscape in the private, not-for-profit market has dramatically increased in the last 18 to 24 months.”

Still, companies of all sizes and types should be concerned about management liability rates in the future. Legal system abuse is resulting in increases in both the amount of litigation and the size of verdicts plaintiffs are receiving.

Certain areas of the country are particularly vulnerable to this type of legal system abuse. As a result, insureds in these localities are likely to be vulnerable to rate increases.

“The environment is so positive for the plaintiff that forces premium increases so carriers are able to stay in that market long term,” Schalick said.

Why a Tenured Carrier Partner Can Help Insureds Navigate An Uncertain Market

It’s clear that insureds are facing an uncertain M&PL market over the next few years. Fortunately, carriers with a long history in the M&PL space will be there to offer stability.

Philadelphia Insurance Companies has been supporting this market for 35 years. PHLY is committed to offering long-term rate stability, even as economic and claims trends start to push premiums upwards. They have an appetite for all sorts of companies, large and small, for-profit and nonprofit alike.

“We’ve been at this game for a long time and are one of the most tenured underwriters in this space,” Schalick said. “We like to stay very consistent.”

PHLY has worked with both for-profit and non-profit on management liability policies. With dedicated M&PL teams throughout the company’s 13 regions, PHLY provides the support agents and brokers are looking for on behalf of their clients. The teams know their regions well and can respond to local trends. They’re also dedicated to making the renewal process as easy as possible for their partners and policyholders.

“We have real confidence in our results, so we focus a lot on making the renewal experience as painless as possible for all agents and insureds,” Schalick said.

The company is also investing in tools to help insureds avoid losses. Earlier this year, they launched a new online risk management platform, PHLYGateway, which offers resources for insureds on how to create an employee handbook and trainings on issues such as recognizing workplace sexual harassment and discrimination.

If insureds have questions, they can consult a Best Practices Help Line, provided via the platform. That way, they can get on the spot risk management guidance to help them prevent claims.

To learn more, visit: https://www.phly.com/mplDivision/managementLiability/default.aspx.

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

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