Risk Scenario

The Downward Spiral

A warehouse injury leads to a once working mother's downward spiral of addiction.
By: | May 30, 2012 • 11 min read
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

Part One

Molly Granger took a deep breath as flurries fluttered through the cold November Minnesota morning air. Just four more steps and she’d be at the front door of the warehouse distribution center that had provided her with a badly needed second income for her family for the past six years.


Married with three children, Molly had just dropped her youngest, Melissa, off at daycare for the first time. Molly was large-framed and had always struggled with her weight. Now she was going back to work with 20 extra pounds that she had put on during the pregnancy.

She tried not to feel self-conscious as she approached the front door of the 600,000 square-foot warehouse that held products for one of the largest online retailers in the U.S. Punching in, Molly smiled. One of her female co-workers had left her a note with a bag of red licorice next to it in her mail inbox.

“Welcome back. We missed you!” the note said.

Molly knew in an instant that she had missed this place too. She liked work and the order it gave her life – and God knows she needed the money.

Molly’s dad, the Duluth Metals Corp. mine foreman, had instilled in her a good work ethic. Molly was easy to get along with, didn’t complain much and knew enough to ask for help when she didn’t understand something.

But as soon as she saw the bustling warehouse floor, Molly took another deep breath and felt icy waves of nervousness in her belly. She just happened to come back to work on Cyber Monday, the busiest day in the online retail industry work calendar.

Molly checked in with her supervisor Max who greeted her warmly and gave her the day’s marching orders. Molly waited until she was out of Max’s sight though before putting on her right wrist the brace she used while doing chores around the house.

Even with being at home for the past four months, the pain in her wrist and forearm that she had struggled with for more than a year hadn’t gone away. She didn’t want Max to know about it though, fearing he would cut down on her hours.

It was 11:20 a.m. when bad luck caught up with Molly Granger. She was rounding one of the shelving aisles carrying a 25-pound box in her left hand when the iPhone attached to her hip buzzed. It was the day care center.

She picked up her phone with her free hand, puzzlement mixed with worry.

“Is something wrong with Melissa?” she wondered.


Scenario Partner

Just then Billy Hixton, the rough-around the edges company forklift driver, came around the corner, driving too fast, as usual, his ear buds deafening him with the music of the nu-metal band Trivium, as usual, despite how many times he’d been warned not to engage in either at work.

Distracted as she was by her call, Molly’s reaction time was compromised. She jumped back to avoid Billy and the forklift. But as she did so she backed into the unforgiving end of a boxed shelving unit that protruded from the shelves.

Molly fell to the mercilessly hard warehouse floor with a sharp cry, her iPhone skittering away from her, still buzzing with the call from the daycare center that went unanswered. She landed hard on her left shoulder when she fell.

Billy jumped off of the forklift and helped Molly to a sitting position. Pushing aside his anger at Billy and his observation that Molly was wearing a wrist brace, Max radioed the on-site nurse.

Molly told the nurse she had pain in her middle back and her shoulder from the fall. The nurse made a note of Molly’s comments and recommended that Molly see a doctor that afternoon.

Part Two


Initially Molly was diagnosed with soft tissue injuries in her shoulder and her back. At the urgent care center, an MRI is considered but not implemented and the doctor decides the best course of action is physical therapy.

When Molly talks to the doctor, the focus of their conversation is on her back and shoulder injuries from the fall. In her confused state, Molly neglects to tell the doctor about her wrist and forearm pain. To manage the pain from the fall, Molly is prescribed Ibuprofen.

Molly dutifully makes her physical therapy appointments for the next three weeks while she stays at home. The incident, the visit to the urgent care center and the fact that Molly missed three weeks from work establish Molly’s case as a workers’ compensation claim. The company claims manager sees nothing about the claim that would flag it as a potentially long-term or catastrophic claim, so her case falls in with dozens of others within her company that aren’t marked for intervention or special supervision.

Molly’s supposed to be home to get rest. But workers’ comp indemnity payments are only a fraction of her hourly wage. With her husband Randy’s hours as a construction worker drastically reduced by the recession, childcare expenditures are out of the question until Molly can go back to work.

The pain in her back and shoulder is lessening but still bothersome. To compensate, as she lifts Melissa to feed and bathe her and as she cooks and cares for her other two children, Molly is using her right hand more than she would want to. The pain in her wrist and forearm are getting worse. In fact they have gotten so bad that she can’t lift a sauce pan in her right hand without grimacing in pain.

She goes back to the doctor seeking relief and with no hesitation he prescribes her Actiq. It’s a small town and Molly is a family friend. To spare the busy mother of three trips to the pharmacy, the doctor thinks he’s doing a good deed by getting Molly a 40-pill prescription.

Molly was never much of a drinker. The way her dad and her uncles drank whiskey scared her away from it. She had only tried pot a couple of times in high school and it was with Jenny Jorgenson. It seemed like almost everybody smoked pot with Jenny at least one time in high school. When she does have a beer with friends, Molly has been known to have a cigarette or two, but it’s not like she carries a pack of them around with her.

Molly’s first evening on Actiq is nothing short of blissful. The pain in her wrist and forearm are gone and for the first time since she married Randy she feels free from anxiety. The family’s credit card debt and the fact that the front tires on the Ford Explorer are almost bald recede into the background.

After Randy and the kids doze off that night Molly takes another Actiq, even though she is already feeling no pain. Watching Jimmy Kimmel, Molly feels so good it’s like she’s part of the studio audience.

With her pain under control and her back injury healed, Molly decides to go back to work. After all, the family bills aren’t going to disappear.

Thinking she’s doing the right thing to control costs, the claims manager for the online merchandiser works to get Molly back in the swing of things as soon as she can. Molly can be tough if she has to and she convinces the claims manager that she doesn’t need an independent medical review.

In fact, she tells the claims manager she would refuse one even if it were ordered and paid for by the insurance company. To avoid confrontation, the claims manager bends to Molly’s will and Molly is sent back to work. The claims manager notes that Molly is still using Actiq but does not know that Actiq is an analgesic opioid that can have a devastating effect on Molly.

Part Three

It’s during a long Easter afternoon at her mother’s that the fabric of Molly’s coping mechanisms begins to unravel. Caught up in the formality of church services and helping her mother cook and serve the Easter ham, Molly forgets to take her Actiq.

She’s carrying a large bowl of mashed potatoes to the table in her right hand when she gets bumped and the bowl almost slips out of her hand. As she shifts her grip to maintain her hold, a bolt of pain shoots through her that almost brings her to her knees.


The next Monday at work, Molly can no longer hide her wrist weakness and pain. Her supervisor Max refers her to a company claims management specialist who augments her file with this new information. Now, to go along with her claims costs from the work injury, Molly’s company has her on the books for a wrist condition that they believe is work-related.

Under the now more intense supervision of the company claims manager, Molly sees a company-recommended specialist and his diagnosis is bilateral carpel tunnel syndrome. The specialist recommends surgery but Molly tries to delay surgery. In her mind, there’s no way that she can take off work now.

Molly used up her Family Medical Leave Act time when she was pregnant. Randy’s been laid off and the family finances are spiraling downward: Any savings they had have disappeared. Cigarettes, once just a now and again thing for her, are also much more a part of her life. Randy is shocked when he finds a pack of Camel Lights in the Ford. Rather than lose her pregnancy weight when she got back to work, Molly has gained weight. The five-foot-five Molly now weighs 175 pounds.

Molly’s work habits have also deteriorated. Four times in the past month, she’s shipped the wrong item to an online retail customer. She has also started to develop a pattern of absenteeism. She’s missing work on average one day a week now. Under the load of the painkillers, she has a hard time getting up in the morning. Max makes a note of her poor job performance.

Alarmed by Molly’s drug intake, her weight gain and what is now an obvious smoking habit, Molly’s claims manager calls a meeting with Molly and her supervisor. In a gambit to keep her drug flow going, Molly tells them both the pain in her wrist is unending and worsening. She gets teary, acknowledging that her life is unraveling, but there isn’t much she can do now to break her addiction and her wrist pain is still killing her.

A visit to second specialist places Molly’s case securely in the category of a catastrophic claim. This time she is diagnosed with thoracic outlet syndrome, a rare condition that results in a permanent injury claim.

Her family doctor has tried to slow down her consumption of Actiq but Molly is now a full-blown addict and she is stonewalling his attempts to manage her. To keep the peace, he maintains her prescription: But that’s not enough for her now.

Molly hits a new low when, on a visit to her doctor, she makes off with one of his prescription pads. She’s soon doubling her intake by forging his signature on prescriptions she fills in a neighboring town.

What’s worse, she’s started compounding the effects of the Actiq with wine coolers. Molly is buzzed now almost every waking hour. Randy still isn’t back to work and the fights fueled by money worries and Molly’s drug and alcohol abuse are becoming more and more volatile.


A work injury that should have been more effectively managed turns into a catastrophic claim when the injured worker masks her pain with a narcotic pain killer, becomes addicted to opioids, and suffers a long-term disability because her initial work-related injury is misdiagnosed and left untreated for too long, leading to permanent disability for the worker and high costs for the employer.

1. Effective, early intervention: In Molly’s case, an obvious, pre-existing, work-related injury is overlooked not only by Molly’s immediate supervisor and the company’s on-site nurse but the case manager assigned to Molly’s case. The case could have had a much different outcome if Molly’s injury had been appropriately observed and managed from the beginning.

2. An earnest focus on narcotics use: Once Molly’s case had become an open workers’ compensation claim, her use of a narcotic medication and her subsequent long-term and heavy use of that opioid should have been flagged by the company’s claims manager. Barring that, the company’s pharmacy benefit manager or its third-party claims administrator should have flagged this opioid use and developed a plan with a treating physician to intervene and wean Molly off of opioids.

3. Provider networks: The use of payer or third party administrator-controlled and managed provider networks is yet another management tool that Molly’s case illustrates the potential benefits of. In Molly’s case, the physician dispensing addictive medications may have had the best of intentions. But the length of time that Molly was being given addictive medications and her deteriorating physical and psychological condition were circumstances that begged for peer review at the very minimum.

4. Predictive analytics: Molly’s addiction and downward spiral also points us toward the evolution of predictive analytics as it is beginning to be employed in workers’ compensation claims management. Molly’s obesity, the fact that she had family members who displayed addictive behavior and her personal financial troubles were all red flags that a pharmacy benefit manager or insurer with an effective predictive analytics model would have picked up and been able to act on. Carriers are beginning to place great emphasis on the ability of predictive analytics to be a useful tool in managing this sort of claim scenario.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

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 an 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]