Risk Insider: Warren Berey

Qualitative Underwriting

By: | September 18, 2017 • 3 min read

Warren Berey is SVP of Multinational Insurance at Generali Global Corporate & Commercial U.S.A., overseeing the development of international casualty and package insurance solutions for U.S. companies and U.S. subsidiaries of foreign companies. He can be reached at [email protected]

As globalization continues to develop, insurance needs continue to evolve. Risk managers, brokers and underwriters understand the importance of good risk management and protecting foreign investments, but identifying the right insurance solutions to match a company’s changing needs and reducing volatility is becoming more of a complex undertaking.

Controlled master programs for multinational companies have become quite common, but what is offered by each program can vary significantly. Ultimately, it comes down to optimizing the program to have the right blend of price, coverage and responsive service. Many companies are trying to optimize their portfolios using predictive analytics — i.e. using “Big Data” to determine risk.

Without question, this certainly has its place in the process and to the extent that we can tap into modern technologies and data to help free up human capital from rote processes, we should. That said, it’s important that we utilize technology and predictive analytics modelling to allow our people to focus on the more difficult problem-solving equations of underwriting – not replace them. What we must remember is that while there is undoubtedly a scientific aspect to understanding risk, there is also an art to it.

While data and analytics have their myriad benefits, they also tend to anesthetize the relationship between risk managers and underwriters.

While underwriters will thoroughly analyze all available data, they are often looking for additional color as well. To provide the right insurance solutions, underwriters need to be able to understand the complexities that are present for today’s multinational companies. It isn’t enough to simply plug in the numbers — a personal connection and detailed knowledge is paramount.

Understanding a company’s operations, philosophy, products, and leadership beyond can provide insights that go far beyond a predictive model when evaluating risk. For underwriters, thoroughly understanding a company makes for a stronger connection.

The multinational insurance industry has become increasingly volatile from a personnel standpoint and in a digital age, where change can occur in a mere 140 characters, turning quality risks upside down in milliseconds, that volatility can quickly become disastrous. That’s where experience comes in, having underwriters that can rely on years of institutional knowledge when assessing risks allows them to layer that experience on top of the data that modern algorithms provide.

While data and analytics have their myriad benefits, they also tend to anesthetize the relationship between risk managers and underwriters. The benefit of fewer surprises, more nuanced coverages, and high-touch customer service can go a long way in fostering lasting relationships between underwriters and insureds, an increasingly disappearing art in today’s on-demand marketplace.

As insurers, one of the best things we can do as an industry is to invest in our people and push underwriters to develop longer-term relationships with clients. Having talent that can earn the respect and trust of brokers and risk managers at multinationals produces greater transparency over the course of the relationship, allowing insurers to write better policies and provide the client with better service.

So while it’s important to focus on the science of quantitative data, insurers must not lose sight of the importance of the qualitative arts as well.

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]