No matter their size, financial institutions are characterized by complex risk portfolios. Real estate funds will have a litany of property exposures. A venture capital firm investing in startups may have unique technology risks. Banks are subject to intense regulatory scrutiny and are frequent targets of cyber attacks. All of these institutions are highly exposed to professional liability risks.
And yet, many mid-sized financial institutions lack the risk management resources necessary to manage these exposures.
“Institutions in the middle market space often face risks just as complex as the large financial organizations, but they don’t always have robust risk management departments,” said John Burkhart, SVP, Head of Professional Lines and Industry Verticals, QBE North America. “As a result, they get less specialized attention from the insurance market than they deserve, even though they could benefit the most.
“That’s why we are looking to serve this tier with an integrated model that will address every aspect of their risk management needs.”
The term “integrated” has become an insurance industry buzzword, although it means different things to different companies.
Some carriers use “integrated” to dress up what is simply cross-selling. “Some think of integration as finding opportunities for separate business units to sell their products together to the same client,” Burkhart said. “But that doesn’t allow for synergy of services. To QBE, to be “integrated” means to have a dedicated business unit that can manage risk more effectively and deliver an end-to-end solution.”
Meaningful risk management integration applies through the entire insurer-insured relationship from underwriting to loss control to claims management. These four attributes demonstrate this approach to integration and how it can help mid-sized financial institutions solve risk management challenges:
When underwriters and claims professionals share the same interpretation of policy wording, it delivers a smoother client experience when a claim does happen.
“Integrated specialization at QBE means one leader, one team and a single accountability around solving customer problems, backed up by expert claims professionals. Our approach eliminates silos and the inherent disconnect from the customer that those silos create,” said Stacey Meade, SVP, Head of Financial Institutions, QBE North America.
Claims professionals are in the room when underwriters are crafting new solutions, ensuring that there is no gap between the underwriter’s vision and the claim manager’s understanding of what’s covered. Because the value of an insurance policy is delivered in the claims experience, the input of claims professionals during the underwriting process helps to proactively shape that experience.
“Our claims professionals can explain how a claim would move through a client’s organization under different policy constructs. The ease of the claims process is not just about breadth of coverage, but how well that coverage is applied to an organization,” Meade said.
That insight is crucial for financial institutions who lack internal insurance expertise and who may benefit from additional education around the way coverage can be applied in different scenarios.
Seamless cooperation between underwriting and claims also enables clients to have a single point of contact. Questions get answered faster, and the answers are consistent.
On the underwriting side, there are no silos pigeonholing experts into buckets of professional liability, property, cyber, etc. When a customer wants to know how one exposure overlaps with another, and how their policies interact, they do not have to call multiple people to solve the puzzle.
“They don’t need to have four different conversations regarding four different exposures relative to a claim,” Burkhart said. When a claim does inevitably happen, a single claims contact also helps to keep everything on track and minimize the stress that can be inherent in the process.
“Whether it’s a property, auto or D&O claim, they are all shepherded through the organization through one person,” Burkhart said. “Companies in the middle market space unfortunately don’t always get that level of concierge service from their insurer.”
“What QBE is doing is very different than a traditional industry silo approach. They continue to be one of our top partners by offering financial institution products with a deep level of expertise into complex FI businesses and the risks these institutions face.”
— Betsy Spalla, JD, Senior Vice President, Hays Companies
When insurers are truly integrated, the loss control services that normally come as a value-add are instead considered a more integral part of the risk management approach. Rather than a separate piece of business, loss control is part of the continuum of the carrier-client relationship.
“The better we get to know a client’s business, the better we are as a partner in terms of identifying and addressing potential problems they could encounter,” Meade said.
“Our claims staff is very experienced, so they’ve seen complex losses before. They understand where tough claims come from, and they want to look for solutions that solve a problem before it manifests,” Burkhart said. Those problems can originate from a number of corners: unsafe driving behaviors; a mismanaged workers’ comp program; a portfolio of properties with unaccounted flood exposure. The list goes on.
“Providing risk assessment tools, educational services and a full suite of loss control resources is another step in the problem-solving process,” Meade said.
“Our goal is to not just be an insurance provider, but an extension of the risk management department.”
Acting as an extension of a client’s team means taking the initiative to solve a problem on their behalf, without waiting to be asked to do so. Leveraging industry-specific expertise to build custom solutions is an example of superior client-level integration.
When one real estate investment company was looking for property coverage, for example, it was turned down by nearly every carrier that its broker reached out to. This was likely due to the underwriters looking at the submissions were more junior — as is often the case with smaller accounts — who felt the exposures that were involved were too complex for them to handle.
“Our underwriter understood the complexity of the risk and knew he could write it, but he understood that there were issues that needed to be addressed first. He called the broker and requested a meeting to review those issues and figure out how to make a policy work for that client,” Meade said. “The result was that the underwriter was able not just to take on the risk, but to craft a proposal that was tailored specifically to that insured.”
“They have a high level of authority. They have a high level of expertise. And they are very comfortable tailoring bespoke solutions as required by the complexities of the market that we’re serving,” Burkhart said of QBE’s financial institutions team of underwriters, whose average tenure is 18 years.
A truly integrated model gives financial institutions access to a complete, end-to-end solution, and it’s predicated on a dedication to specialization. QBE’s Integrated Advantage for Financial Institutions — a new vertical dedicated to this sector — is possible only because of the strength of the bench of both the underwriters and claims professionals.
Rather than specializing in EPL, D&O, property or workers’ comp lines of insurance, they instead have an intimate understanding of the financial institutions sector as a whole, and how all of these pieces fit together. That is what it means to be an integrated specialist insurer, and clients have already recognized the unique advantages of this approach:
“What QBE is doing is very different than a traditional industry silo approach.” said Betsy Spalla, JD, Senior Vice President, Hays Companies. “They continue to be one of our top partners by offering financial institution products with a deep level of expertise into complex FI businesses and the risks these institutions face. Additionally, by giving us access to one team, this will create an all-encompassing solution that we have confidence in because it is led by a dedicated experienced FI leader. We look forward to this vertical creating a seamless experience with underwriting, claims, risk solutions and product and are excited to continue to partner with them to serve our customers.”
To learn more about the QBE Integrated Advantage for Financial Institutions, visit https://www.qbe.com/us/specialty/financialinstitutions.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with QBE North America. The editorial staff of Risk & Insurance had no role in its preparation.
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.
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.
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. &