The Aviation Technology Crutch

When technology fails, pilots might not have the manual experience to save the day.
By: | May 6, 2015 • 7 min read

In late March, investigators were combing remote Alpine ridges for the wreckage of a Germanwings flight. It turned out the worst had happened, the loss of 150 lives in that crash were the result of a deliberate act.

The European tragedy follows on the heels of several air disasters around Asia over the past year or so, all of which raise questions about the safety of air travel and the risk management efforts of both airlines and insurers.


Oliver Dlugosch, head of aerospace, Swiss Re Corporate Solutions

“Perception may be clouded by recent events, especially the total losses of 2014 and now,” said Oliver Dlugosch, head of aerospace for Swiss Re Corporate Solutions. Reality, however, is not quite so dark. By the numbers, it’s clear that flying is safer than ever, he said.

“We did observe a relatively high frequency of losses last year among Asian airlines,” said Dlugosch, “but some of those were isolated instances, like the shooting down of the flight over Ukraine and the disappearance of the Boeing 777 over the Indian Ocean. Outside of those, we often see multiple factors leading to accidents: the growth of the industry and the shortage of pilots, weather, infrastructure.”

Speaking broadly, Dlugosch stated, “Airplanes are highly automated and that has made aviation safer, there is no dispute about that. We have seen a steady reduction in fatal accidents and that is over a time of increasing passengers and flights. The challenge airlines and risk managers are facing is what to do when the system fails.”


He cited two examples of experienced captains and able crews who were able to overcome failures. One was Qantas flight 32 in November 2010, when the crew was able to safely land an Airbus A380 with no injuries after the jet lost an engine. Before that was US Airways flight 1549, which suffered bird strikes on takeoff from LaGuardia Airport in New York and ditched in the Hudson River.

“Airplanes are highly automated and that has made aviation safer… . The challenge airlines and risk managers are facing is what to do when the system fails.” — Oliver Dlugosch, head of aerospace, Swiss Re Corporate Solutions

“The Qantas pilot saved a lot of lives. Capt. Sullenberger, who made the water landing, was also a very experienced pilot. He made good decisions early. They also both had a good bit of luck,” Dlugosch said.

Dlugosch stressed that in both cases the pilots were able to fly the stricken aircrafts by hand.

“A few years ago there was a situation with a cargo carrier that suffered a series of losses. Their response was to make their pilots do more hand flying during routine operations, including takeoff and landing. That training enabled the pilots to respond better in emergencies. Their efforts were very successful.”

Obviously, he said, “no airline wants to have a crash,” but added that “there is a role for the insurance and risk management sector” besides just underwriting and rate setting.

“For clients where we have 100 percent line, we give credits for training. Several other insurers and reinsurers do as well. We have also introduced for general aviation flight training that includes upset recovery.”

Most aviation risk professionals agree. They separate the deliberate acts from the accidents, and then focus on the chain of events leading up to the accidents. Causes can be traced to training, maintenance, or operating conditions as well as the broader challenge of a shortage of pilots.

Huge Growth of Aviation in Asia

“There has been huge growth in aviation across Asia,” said Paul Tuhy, chief underwriting officer for global aerospace and a managing director on XL Group’s leadership council.

“There is a shortage of pilots, and many of those serving are young.”

Many are also ex-military, where they were trained under different operating mandates.

“Pilots tend to rely on technology, so when there is a cascade of faults being spit out by the systems, the flight crew may not be able to keep up.”

Tuhy, a pilot himself, cited the Qantas incident as an example of a captain and crew with the experience and perspicacity to turn off the technology and just fly the aircraft. Tuhy noted that the captain, Richard DeCrespigny, wrote a book about the incident, titled QF32, the flight’s call sign. He recommends the book as a case study in what can go right when everything is going wrong.

“We underwrite most major airlines in the world,” said Tuhy. “We look at all factors, from their historical losses, to training programs, to fleet age, and the regulatory regime in their home country.”

He added that there are cultural differences country to country, but that they are hard to condemn across the board.

“In the past there has been some element of strict hierarchy in Asian operations, but that has largely been addressed,” said Tuhy.

“On the plus side, Asian cultures are quick to admit fault. That is very different from the U.S. where litigation is so heavy and all anyone will ever say is, ‘We are investigating …’ .”


There are several common themes among aviation risk professionals. One that is mentioned often is that technology is a tool, just as is a wrench or even an airplane. It can be used or misused.

“One example is controlled flight into terrain, which is basically flying the plane into a mountain by accident,” said Jim Herbert, chief underwriter of international aviation risk, and global head of aviation major risks at Starr Cos.

Those incidents were common until ground-proximity warning systems were developed. That is the “whoop-whoop, pull up!” alarm that sometimes can be heard being tested as pilots run through their pre-flight checklist. There are similar alarms for oncoming aircraft and other hazards.

“Technology has made airframes much more reliable,” said Herbert.
“And airlines are much more cognizant of loss-control processes. They embed those in training and operations. There really is a lot of good stuff going on.”

He added that while pilots and technology are inherently working together for safety, losses can occur when technology fails and pilots don’t have the manual flying experience to save the situation.

Manual Flight Time

“If you look at losses over the past six or seven years that have been attributed to pilot error,” Herbert noted, “you can see instances where the cockpit crew was not able to react in non-standard situations. That could be because pilots don’t do much actual flying any more.”

Graham Spencer-Brown, aviation practice leader for international airline business at Starr Cos., added, “We talk to our clients a great deal about all these topics. We do not tell them how to run their airline, but we know what their operations are.

“In a routine seven- or eight-hour flight there is very little actual pilot stick time, maybe 20 minutes. So you are dealing with fatigue and boredom, then maybe the need to react in an emergency.”

“In a routine seven- or eight-hour flight there is very little actual pilot stick time, maybe 20 minutes.” — Graham Spencer-Brown, aviation practice leader, international airline business, Starr Cos.

Spencer-Brown said that airline pilots do train for emergency situations, such as losing an engine on takeoff, at least once a year.
He added that systems manufacturers as well as airlines and pilots are under scrutiny.

“In one incident as I recall the cockpit computers generated something like 80 error messages in the space of just a few minutes, and those messages were not necessarily in order of priority.”

New insight is also coming from the growing use of transponders by which the aircraft transmits operating data to the airline.

“All that goes into a big database,” said Spencer-Brown, “and the airlines and manufacturers study ‘exceedences out of norm.’ Airlines are learning what their crews are actually doing in the cockpit in real life. They are then building that information into their simulator training.”

Gary Gardner, head of aviation claims for North America at Allianz has observed that “in the U.S. there has been a trend toward emergency procedures and safety audits. There are manager meetings to cut the accident rate, and that has been very effective. We review those audits, even the emergency response drills. They know that as technology advances, the training has to keep pace.” Allianz recently published a global aviation study.

As a pilot himself, Gardner can attest that planes essentially fly themselves these days.

“Airlines are more proactive these days in self-auditing, even self-reporting. At least that is the case in the Western world.” — Gary Gardner, head of aviation claims, North America, Allianz

“That can put the pilot into a position not of being dependent on the technology, but not being as practiced at flying. Airlines are aware of that and are changing their training.”


Gardner is also quick to address the notion of a hierarchical flight deck.

“The current commercial cockpit is much more of a team atmosphere. That didn’t use to be the case, but today the co-pilot and even the third officer, if there is one, are now required to speak up if they see a problem. And captains are trained to be more open to input and insight.”

Overall, Gardner stated, “airlines are more proactive these days in self-auditing, even self-reporting. At least that is the case in the Western world. Other regions of the world are working to catch up.”

Gregory DL Morris is an independent business journalist based in New York with 25 years’ experience in industry, energy, finance and transportation. He 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.


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. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]