Risk Insider: Joe Tocco

Ocean Warming Risk: Why Does it Matter to Insurance?

By: | October 4, 2016 • 2 min read

Currently AXA XL's Chief Executive of North America P&C, Joe Tocco has enjoyed three decades in the insurance industry at various organizations. He is also a veteran of the U.S. Navy, where he served as a nuclear field service engineer. He can be reached at [email protected]

One of the things I’ve seen firsthand in my insurance career is the interrelated nature of risks; they rarely occur in isolation. A loss in one area often triggers or exacerbates others. Such is also the nature of our environment, where we are observing disturbing changes.

I was fortunate to have served in the U.S. Navy and have been awed ever since by the oceans’ vastness, power and complexity. Understanding the oceans is difficult. Astonishingly, humans have spent 100 times more hours on the moon than in the deepest part of Earth’s oceans.

A new report on ocean warming by the International Union for Conservation of Nature (IUCN), titled Explaining ocean warming: Causes, scale, effects and consequences describes the phenomenon as ‘one of the greatest hidden challenges of our generation.’ The analysis report has been compiled by 80 scientists from 12 countries.

Even though our planet has enough land area to accommodate more than 7 billion people, 71 percent of its surface is covered by water. Oceans have a critical influence on life as we know it – heating and cooling the planet, providing food and supporting global commerce, yet we have only recently started to understand them.

If science and nations are to mitigate climate change, we must clearly grasp how the decline in coral reef health, loss of polar ice, ocean warming, sea level rise and ocean acidification are affecting the people and property that the insurance industry helps to protect.

The report, which is sponsored by XL Catlin’s Deep Ocean Survey initiative, is the third in a series of scientific research programs to better understand the key indicators of climate change. One of the missions of the Survey is to pilot a systematic method for scientists around the world to assess ocean health. What we are learning so far has been startling:

  • Sea levels have risen about 20 centimeters (about 8 inches) since pre-industrial times. If carbon dioxide emissions continue at their current pace, sea levels will rise a further 99 cm (39 inches) by 2100.
  • Many of the world’s largest cities, including New York and London, are exposed to flooding from sea level rise.
  • Hundreds of millions of people will be forced to relocate if sea levels rise at the current rate.
  • In the United States alone, $500 billion of coastal property could be below sea level by the end of this century.
  • The ocean absorbs excess heat and carbon dioxide, and far more of that heat is now buried in the deep ocean, below 700 meters, than was found 20 years ago.
  • CO2 dissolves in seawater to form carbonic acid, increasing acidity. Since the beginning of the industrial revolution around 1750, the acidification of the ocean has increased 30 percent. That change has led to the destruction of coral reefs and many marine species.

Why should the insurance industry care about ocean warming? For one thing, we are in the risk business, and ocean warming represents enormous risks. To manage any risk, we first have to understand it.

If science and nations are to mitigate climate change, we must clearly grasp how the decline in coral reef health, loss of polar ice, ocean warming, sea level rise and ocean acidification are affecting the people and property that the insurance industry helps to protect.

As an industry built on managing risk, we must continue to study the risks facing our planet from climate change and work together to mitigate their effects. Let’s use our expertise in analyzing risk and helping rebuild lives and livelihoods to preserve opportunities for future generations.

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.

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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.

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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]