Risk Insider: Allen Melton

Are You Properly Evaluating Cyber Exposure and Recovery?

By: | August 19, 2014 • 2 min read

Allen Melton is a partner and the Americas Leader for EY’s Insurance & Federal Claims Services practice. He has spent the majority of his career assisting clients to achieve financial recovery from disasters through commercial insurance claims, FEMA’s Public Assistance program, HUD CDBG-DR grants and other sources of funding. Over the past 20+ years, Allen has assisted clients in the attainment and resolution of over $10 billion in insured claims and federal disaster grants resulting from various loss events around the globe. He also regularly provides industry thought leadership through presentations at the various industry events. He can be reached at [email protected]

In a lunch discussion with the director of finance at a large health care corporation, we discussed the recent data breaches where Russian gangs had stolen in excess of a billion logins/passwords.

Her concerns, or lack thereof, focused on the fact that her organization did not maintain credit card information since they were a patient research facility, and payments came from the large drug companies, not individuals.

In reality, their chief research facility maintained records on thousands of patients every week. This information included name, birth date, Social Security, health information, etc.

“Cyber” is Misleading

All too often when people hear the term cyber crime, thoughts spring to mind of some clandestine techno geeks trying to hack into banking information and wire funds into overseas accounts. However, the information subject of a cyber attack does not have to be located on a network. Data can reside on an old discarded hard drive, a smart phone, iPad or a printed report unconcernedly dropped in the trash.

What Data Does Your Company Have That “They” Want?

While credit card information is probably the most sought after form of data, aggressive spammers, such as the recent headlining Russian gang, are often happy to just get a new email address and the account’s contact list in order to push their enlargement pills.

Some cyber criminals are looking for browser history or any personal information on employees, clients, etc., that can be sold to disreputable advertisers. Some data thieves are looking for your draft invoices, so they can swap out your banking information for theirs to defraud your customers. Other data thieves will try to take over your network and ransom it back to you.

What Can You Recover From Insurance?

You really need to look everywhere in your program for recovery. The inconsistencies between cyber policies make this a very inexact science.

Some CGL, first party property or crime/fidelity policies have limits but can represent the only methods of recovery. Policyholders may also have potential recovery through D&O, E&O, and professional liability coverage, depending on the nature of the perpetrator and what actually occurred.

While these policies often contain relatively insufficient coverage limits, each may contain potential recovery sources that need to be thoroughly vetted.

In recent years, newer policies have evolved to address the unique risks of cyber crime. Policyholders can potentially look to cyber risk policies for coverage of damaged equipment, stolen equipment, business interruption and extra expenses, costs of notifying impacted parties, reputational damage, remediation costs, third party claims, and cyber extortion.

Take Action Now

Cyber risk is a reality for practically every organization and the sophistication of those trying to access your sensitive data grows daily.  It is important to understand the breadth of this risk as it extends well beyond simply a remote hacker gaining access to your network.

Evaluate the insurance policies you have in place to understand what coverage may be responsive to a cyber attack or breach and where necessary, take the appropriate steps now to fill those gaps in coverage.

Read all of Allen Melton’s Risk Insider contributions.

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]