Sponsored Content by Zurich

Zurich’s Focus on Total Cost of Risk Sets It Apart

Zurich's expertise speeds up the identification of insights for risk management departments.
By: | September 15, 2014


Some business risk is easy to control, but much risk is difficult to predict. When it comes to casualty risk exposures, smart risk management organizations follow a “big picture” philosophy to reduce that difficulty.

Most of all, they pay close attention to the concept of Total Cost of Risk, or TCOR.

With that in mind, Zurich Global Corporate in North America (GCiNA) has effectively built its Domestic Casualty value proposition on the principle that nothing truly supersedes the calculation of TCOR as a means to reduce both premium and claim costs.

And, said Brandon Fick, head of Domestic Casualty, Zurich GCiNA, Zurich leads the casualty industry because it not only offers a TCOR proposition as a prime benefit to insureds, it also puts skin in the game to back up its TCOR beliefs.

“TCOR is a major focus at Zurich because it can be a clear differentiator,” Fick said. “There are very few companies who can match our offerings regarding TCOR. Our customers are not just buying insurance; they are also buying Zurich’s expertise as an extension of their risk management department.”

Fick explained that in the large corporate business casualty market, companies typically take on the majority of the risk themselves through large deductibles and retention programs. Of course, they also buy insurance coverages for added protections. But in the very competitive casualty business, the drive for better ways to manage risk — all the factors that go into determining TCOR on an insurance program —are often pushed aside for the sake of price. That’s a very shortsighted approach, Fick said.

Fick said Zurich’s decision to focus on TCOR makes sense because it leads to high business retention and creates a strong customer-carrier interaction that ultimately results in keeping losses and costs down.

“We are always looking to help our customers drive a better outcome,” Fick said, adding that Zurich initially takes a holistic, 360-degree look at pre- and post-loss activity to see if a business is getting the most for its risk management dollar. “We offer data insights through sophisticated tools that can measure results and identify opportunities to improve.”

SponsoredContent_Zurich“TCOR is a major focus at Zurich because it can be a clear differentiator. There are very few companies who can match our offerings regarding TCOR. Our customers are not just buying insurance; they are also buying Zurich’s expertise as an extension of their risk management department.”
— Brandon Fick, head of Domestic Casualty, Zurich GCiNA

Once Zurich performs that initial analysis, the company’s claims and risk engineering team jointly creates a detailed plan that will go a long way towards reducing both claim frequency and severity.

According to Fick, the Zurich differentiator lies in its extensive — and proprietary — tool kit, which has been years in the making.

In fact, about five years ago, a prospective customer was feeling some pressure in their program and was looking for a carrier that could help them identify areas that needed improvement. Zurich specifically drilled down into the customer’s transactional outcomes by using an internal tool to identify any potential missed financial opportunities through overpayment of claims. The result was a substantial savings of 20 percent that Zurich was confident they could deliver. When they told the client about their findings, the response was, “Prove it.”

So Zurich Casualty discussed the results in detail with the customer and offered something unprecedented — a guarantee that its analysis would prove accurate and deferred an amount of the total premium. The basic proposal was that if Zurich’s calculations were right, Zurich would recoup the deferred amount and receive a bonus too.

“Within two years, we knew we had proven our findings,” Fick said, adding that the experience gave Zurich the confidence to expand the program. “We concluded we have this unique tool, why are we not using it nationwide?”

The basic TCOR premise is taking a “forensic” approach when auditing the claims process. And while the original concept was focused on claims alone, Zurich started looking at the pre-loss side as well, delivering accurate ROI numbers to clients when they agreed to commit to the entire TCOR process.

“Big data is the buzzword today; everyone in the industry is talking about it,” he said. “We’re actually taking big data and using it to create a tailored solution for the customer.”

Zurich’s underwriting team has the company so confident, Fick said, in the impact their TCOR proposition will have on driving better outcomes. Their belief is so strong that they empower their underwriting teams to offer up front premium considerations that are normally afforded later in the relationship.

“Again, we want our customers to think of us as an extension of their risk department,” he said. ”I have yet to meet a risk manager who has commented about being overstaffed. Our customers realize they need partners; most of them don’t have the resources or tools to do an in-depth analysis of their results to identify where they may have some pressure in their program.”

Fick noted that Zurich Casualty’s TCOR approach is not for every customer. It really is set up specifically for customers who are dedicated to continuous improvement and are already using some form of analytics to help in decision making. They also must share Zurich’s belief in the value in collaboration and demonstrate the commitment to execute on Zurich’s TCOR recommendations.

“It’s a 6 to 12 month life cycle,” Fick said. “Before we even look at a number on a piece of paper it requires having a lot of detailed discussions with the customer so that we can understand what they have done to manage their risk.”

Zurich formally rolled out its complete TCOR core strategy during the first quarter of 2014. But, Fick said, the company has been implementing elements of the final product during the past three years. It started out on the claims side, but today covers every aspect of risk. Since it began using its TCOR strategy with clients in 2010, Zurich Casualty has increased its new business writings 270 percent — an impressive showing by any measure.

“This is the next wave of underwriting,” Fick said. “Everyone may be talking about big data, but you have to deliver insight, solutions and a differentiated product to the customer. We believe strongly that our TCOR proposition is that critical differentiator.”

This is intended as a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America, provided solely for informational purposes. Nothing herein should be construed as a solicitation, offer, advice, recommendation, or any other service with regard to any type of insurance product underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company. Your policy is the contract that specifically and fully describes your coverage, terms and conditions. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy. Coverages and rates are subject to individual insured meeting our underwriting qualifications and product availability in applicable states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers.


This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Zurich. The editorial staff of Risk & Insurance had no role in its preparation.

Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The Betrayal of Elizabeth

In this Risk Scenario, Risk & Insurance explores what might happen in the event a telemedicine or similar home health visit violates a patient's privacy. What consequences await when a young girl's tele visit goes viral?
By: | October 12, 2020
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.


Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.

Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.

Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.

But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.

First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.

Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.

Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.

Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.

“Sounds dreadful,” she said to herself.

Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.

It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.

She felt like she was suffocating.

One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.

Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.

Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.

Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.

“So can you tell me what’s going on?” she said.

Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.

“It’s just… It’s just…” she managed to stammer.

The doctor waited patiently. “It’s okay,” she said. “Just take your time.”

Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”

More tears streamed down her face.

Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.

“Okay,” Elizabeth said, some semblance of relief passing through her.

Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.


As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.

Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.

#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.

Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.

By noon of the following day, her well-connected father unleashed the dogs of war.

Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.

“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.

“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”

“Great. Thanks, kid,” Rand said.

“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.

It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.

Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?

He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.

He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.


Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.

In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:

Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.

The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.

Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.

Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.

The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.

Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.

That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.

“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.

There was a long silence from the underwriters at the other end of the phone.

“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.

Rand just sat silently and waited for another shoe to drop.

“Well, what can you do?” the broker said, with hope draining from his voice.

The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.

Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.

Medwell’s relationships with the insurance markets looked like it almost never would. &


Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?

Risk Management Considerations:

The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:

  • maintain a strong patient-physician relationship;
  • protect patient privacy; and
  • seek the best possible outcome.

Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.

A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.

This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.

This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.

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