Starbucks’ Workers’ Comp Program Earns a Teddy Award for Its Exceptional Employee Advocacy

In just four years, Starbucks Coffee Company changed the way workers’ comp claims were handled by placing the process in the hands of its partners.
By: | October 29, 2018 • 6 min read

‘To inspire and nurture the human spirit — one person, one cup and one neighborhood at a time.’ — It’s one thing to see the Starbucks mission statement; it’s another to live by it.

“When we look at our mission statement, sure we serve coffee beverages, delicious pastries and other food items, but really we’re a person-oriented company,” said Noreen Olson, manager of claims, risk management, Starbucks Coffee Company.


“Whatever reason [a customer may have to] visit our store, we ask our partners to have them leave with a smile and a warm feeling. When a partner is injured, we have to treat them with the same approach,” she said.

Inspiring and nurturing the human spirit — it’s right there, embedded in the language: Starbucks calls its employees “partners,” because it believes everyone, from retail store workers to manufacturers, is a partner in the shared success of the company.

Four years ago, when the workers’ compensation team decided it was time to revamp its program, they did so by “looking through the lens of our partners,” said Steve Legg, director of risk management, Starbucks.

“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.”

And so, with a mindset toward helping each injured partner, one person at a time, this nine-member workers’ comp team reevaluated the program and turned it into an award-winning, employee-oriented machine, helping drive down workers’ comp loss reserves by more than $50 million over the last three years and earning it a 2018 Teddy Award.

Partner Advocacy at Play

Starbucks operates more than 28,000 stores across the globe, with 170,000 partners in the U.S. alone. The company has about 2,500 open claims at any given time, receiving an average of 500 new claims each month.

That being said, the average store has less than one claim per year — meaning injured partners did not always have knowledge about or in-store guidance on the workers’ comp system. But that has since changed.

“Each [strategy implemented] has been a key to success. And they have one major thing in common: They allow the partner to have control,” said Rebecca Kron, senior claims specialist, Starbucks.

“Partner self-reporting — that opened the door,” said Olson. “It was a way of saying, ‘We trust you. We know you feel a need to receive health care.’ With that hand of trust, we set up a basis for a good and supportive claim from the start.”

The Starbucks’ team (L to R): Julia Brash, Rachelle Quick (back), Teresa Bravo, Noreen Olson, Linda Forsberg (back), Elizabeth Moorhouse, Melodie Norris, Steve Legg. Not picured: Rebecca Kron and Nedra Gordon

Before self-reporting, store managers were required to report incidents. With the fast-paced, busy environment of retail stores, however, injuries that occurred on the job weren’t getting reported until hours or even days later. That wasn’t helping partners heal, and it didn’t set up trust the way the team wanted.

“It was Noreen who asked, ‘Why do we require managers to report claims?’” said Legg. “She had the vision and the insight to send a message to our partners that we trust them.”

Legg said the partner advocacy approach didn’t stop with self-reporting, either. An integrated leave and workers’ comp call center operated by Starbucks’ TPA enabled partners to get in touch with someone on the phone, said Legg.

“Workers’ comp can sometimes get marred by leaving messages, but I’d say 70 to 85 percent of questions [about workers’ comp] can be answered in minutes with a live person.”


Starbucks also invested in a dedicated telephonic medical case management team, where injured partners are able to speak with Starbucks-trained nurses from Genex Services, to ask questions about their injury and get help finding care providers.

It goes back to the mission statement, Kron said: “Our mission statement is what we live by. Our standard, when we bring on new examiners or vendors, is to have a one-on-one with them to train in the Starbucks way.”

“If there’s an ineligible claim, we try to find another solution. We’re a solution-oriented group. … if one shoe doesn’t fit, we try to find another shoe that does fit.” — Teresa Bravo, claims supervisor, Starbucks Coffee Company

In this vein, any telephonic case manager from Genex or claims examiner from the TPA that a Starbucks partner calls will provide the care and values threaded throughout the company’s mission statement, while also guiding the partner through the claim.

Since this system went into practice in 2015, claims with nurse involvement have gone from 51 percent release-to-work and deemed maximally medically improved (MMI) to 86 percent release-to-work and deemed MMI.

Additionally, Starbucks experienced a nearly 50 percent decrease in claims litigation, putting overall litigation rates at less than 6 percent.

“They get a person. Our partners are aware that their company cares about them,” said Teresa Bravo, claims supervisor, Starbucks. But, she said, the greatest improvement to workers’ comp came when the team implemented direct deposit of time-loss pay for partners that miss time due to their work injury.

“People get scared when they get hurt, and they’re afraid they’re not going to get any money. There’s a need for financial benefits — that is an urgent concern.” Direct deposit alleviated the scare of waiting for pay, Bravo said.

“It shifts the focus to ‘when I’m going to heal’ or ‘when can I get to physical therapy.’ It removes the financial worry and stress to help the partner focus on healing.”

A Clear Path of Communication and Guidance

Self-reporting of injuries, telephonic case management and a direct deposit system were just the start. For this workers’ comp team, setting up a clear path of communication and guidance was essential to their overall success.

Noreen Olson, manager of claims, risk management, Starbucks Coffee Company

“Our role is to support the partner,” said Bravo. “We want partners to come back to work. We don’t mandate; we communicate with them.”

And “communication is not just one way; it’s multiple ways,” said Kron.

When partners have a concern or question about their claim, they can call and chat with a real person, text message through an automated system, have a one-on-one text conversation with a claims manager, visit Starbucks’ online platform and more.

“We have a variety of avenues to reach out to us,” said Kron.

“And we enjoy the human contact and talking with partners,” Bravo added, just as much as they value having direct access to the workers’ comp team, she said. It’s yet another way the company’s mission statement comes into play, focusing on each individual throughout the process.

“Our job is to get them through the injury and back to work,” said Olson. When it came to evaluating guidance, however, the team found there was still work to be done: Before 2014, Starbucks did not direct medical care or choose physicians for their partners.

“But what we found was many of our partners, a significant portion of whom are relatively young, did not have a primary care physician and had no idea where to go for care.” (The predominant age demographic of partners at Starbucks is between 18 and 25.)

Starbucks began offering its partners access to the Genex Provider Pathway, an online provider look-up tool. And, in addition, Starbucks implemented a pilot program for 200 stores, in which partners receive a Medical Information Guide, or MIG, upon injury.


The MIG offers the partner places to go for care and information about how to fill prescriptions without incurring out-of-pocket costs. It also provides contact information for Starbucks’ TPA Sedgwick.

And while the MIG program is in its infancy, it has already shown improvements, decreasing the use of unnecessary emergency department visits and helping to resolve claims quickly and efficiently.

“All of these combined create transparency,” said Bravo. “Transparency and communication are the key elements to a successful program.

“If there’s an ineligible claim, we try to find another solution. We’re a solution-oriented group. And our philosophy is, if one shoe doesn’t fit, we try to find another shoe that does fit.” &

Autumn Heisler is the digital producer and a staff writer at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.


Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.

R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.


We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?


Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.


Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now and where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.


More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]