The Profession

David Hornaday

David Hornaday knows risk managers have to be more fluent and competent in the financial world. Just procuring insurance isn’t enough anymore.
By: | August 3, 2016 • 4 min read

082016_Profession
R&I: What was your first job?

Working as a signalman for Consolidated Rail Corp. I did that for about a year and a half before I got my first risk management job as a claims agent for ConRail. That was a self-insured company, so they administered their own claims.

R&I: How did you come to work in risk management? 

ConRail got acquired by two different railroads and was split up, so I had the opportunity to either go with one of the railroads or look outside for another position, and I wanted to do more than just work with claims. I wanted to be exposed to the corporate risk management side of things. So I found a job as a risk manager for Suburban Propane in Whippany, N.J.

R&I: What is the risk management community doing right?

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We’re working closely with brokers and underwriters and communicating internally to bring the insurance expertise to companies that need it.

R&I: What could the risk management community be doing a better job of?

Risk managers should be aware of non-traditional risks and focusing on ERM, versus just the traditional insurance procurement function. That’s where the future of our profession is going.

R&I:: What was the best location and year for the RIMS conference and why?

This is a little self-serving, but I thought Vancouver in 2011 was great because I had never been there but always wanted to go.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

Risk managers have to be more fluent and competent in the financial world. Just procuring insurance isn’t enough anymore. You have to have a basic level of financial knowledge to communicate with not only internal treasury and CFOs, but also with underwriters and insurers.

R&I: What emerging commercial risk most concerns you?

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Social engineering. The onslaught of fraudsters is relentless. Companies have to be vigilant. But the coverage surrounding that sort of risk is also emerging, so risk managers will have to pay close attention to that and keep up with that evolving coverage.

R&I: What insurance carrier do you have the highest opinion of?

We had a major loss recently and there was a handful of insurers who paid on that claim which I thought were exceedingly professional: ACE (now Chubb), Ironshore and XL (now XL Catlin).

R&I: How much business do you do direct versus going through a broker?

We use a broker for everything.

R&I: Is the contingent commission controversy overblown?

It probably was a little bit overblown, but I think it’s good that things are more transparent now.

R&I: Are you optimistic about the U.S. economy or pessimistic and why?

I’m probably a little more pessimistic than optimistic. I just don’t see signs of strength out there. There are still companies with tons of cash outside the U.S. which can’t really bring it back in a way that makes sense. U.S. oil production is way down since the price of oil is so low.  Of course, the lower gas prices help the average consumer and lowers overhead costs for businesses, so it’s a little bit of a mixed bag.

R&I: Who is your mentor and why?

My mentor in this business is Joe Racansky. He was the director of risk management and my boss at CyTec Industries, and I learned as much from him as anybody in my career.

R&I: What have you accomplished that you are proudest of?

Successfully resolving claims stemming from the Lac-Megantic train derailment in 2013.

R&I: How many e-mails do you get in a day?

I’d say about 100.

R&I: How many do you answer?

All the important ones.

R&I:: What’s the best restaurant you’ve ever eaten at?

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Prime 112 in South Beach, Miami. It was the freshest tuna I’ve ever had, and it was with the team from Aon, so it was great food and great company.

R&I: What is your favorite drink?

Gin and tonic.

R&I: What is your favorite book or movie?

My favorite movie is “Bull Durham.” It’s a baseball movie.

R&I: Who’s your favorite baseball team?

The Cincinnati Reds.

R&I: What is the most unusual/interesting place you have ever visited?

Key West, Fla., is pretty interesting. My wife and I have been there a few times and you always see something different.

R&I: If the world has a modern hero, who is it and why?

I was moved by the Chris Kyle story. I thought his life and story were inspiring.

R&I: What do your friends and family think you do?

I think they think I just buy insurance, when it’s really more comprehensive than that. They don’t know about meeting with underwriters and contract review and working on M&A deals.




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

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.

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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]