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tech-and-wcNew technology is reshaping the world in which we live. It takes the form of self-driving cars, virtual reality and 3-dimensional (3D) printers. Once thought to be cold and impersonal, technology is redefining our expectations and how we view a quality customer experience. It is no surprise that new technologies are also reshaping workers’ compensation as we know it. Soon, it will be difficult to remember a time when mobile apps, telemedicine and artificial intelligence were not part of the workers’ compensation claims process. And, it’s not hard to imagine there are many more advancements to come.

The technology currently being used and the prototypes soon to hit the market are remarkable. As an example, technology is a dominant component underlying the advocacy movement in the claims world. As service providers work diligently to improve an injured worker’s experience and alleviate much of the accompanying uncertainty, technology is being used to provide information to injured workers more quickly and conveniently.

What technologies are making an impact on workers’ compensation – today and tomorrow?

Smart technology
Today
: Smartphones, tablets and mobile devices allow injured workers to be more empowered in the claims process than ever, capable of checking claim status and payment information in real time, corresponding and meeting virtually with examiners and nurse case managers, submitting important documents and photos, even reporting their own claims – all according to their own preferences using tools like mobile applications, messaging and chat platforms.
Tomorrow: Gamification of the claims experience through self-service applications will encourage and empower employees to take a more active role in their recovery and return to work. With the rise in wearable devices and connected health initiatives, application programming interfaces (APIs) will begin to be integrated into mobile self-service tools to support injured workers within the workers’ compensation system. First fill pharmacy cards will become part of a person’s digital wallet, thereby increasing convenience and satisfaction for workers’ compensation patients needing prescription drugs.

Automated correspondence
Today
: Automated correspondence and rules engines can be engaged by employers and claims administrators to direct workflow and send real-time notifications via text or email when triggered by specific claim events. The efficiencies achieved allow organizations to direct additional resources where they will have the most impact – supporting the injured worker – while having the added benefit of potentially lowering costs, improving productivity and achieving higher levels of employee satisfaction.
Tomorrow: Techniques such as automated empathy have the opportunity to automate the experience by motivating the employee through familiar, text-like interaction. These technologies will be driven by artificial intelligence rooted in behavioral patterns and can also reduce the workload of busy claims professionals.

Paperless solutions
Today
: Electronic signatures eliminate stacks of paper forms and support faster settlements and claim acknowledgements. Injured workers can sign up for direct deposit through mobile applications. Biometric authentication that simplifies the way employees sign up for and interact with self-service tools is becoming more refined; consider, for example, secure thumbprint recognition features integrated with the latest smartphones. These technologies foster more customized and immediate access for injured workers during what can be an unsettling and stressful time.
Tomorrow: Paper and electronic correspondence containing lengthy, written explanations will be replaced by online video platforms where claim concepts can be clearly demonstrated and explained. Personal avatars, virtual assistants and chat capabilities will also increase in popularity and support more holistically the advocacy of the person.

Telepresence and videoconferencing
Today: For claim reviews, meetings and discussions among employers, claims professionals, case nurses, attorneys and others in remote office locations, today’s technologies are making communication easier. With the explosion of social media, similar newsfeed-style interactions are being developed in the claim process allowing real-time and interactive exchange between all involved parties.
Tomorrow: Telephonic advocacy outreach will be replaced with video telepresence and allow for more personable and empathetic interactions. Telehealth solutions will more comprehensively support nurse case management and clinical triage, adding more efficiency to the system.

Analytics
Today
: In recent years, the industry has progressed from the application of descriptive to predictive and now to prescriptive analytics. In addition to common claim variables, predictive analysis can leverage text-mining techniques in examiner notes and loss descriptions. This enables claims professionals to identify higher-cost claims by surfacing details such as comorbidities, opioid usage or other significant elements not readily documented in a field.
Tomorrow: Prescriptive analytics allow companies to further harness the power of big data, providing greater insight into actions needed to produce the best result for an injured worker, and then actually prescribing the intervention required. For example, new technologies allow the use of machine or deep learning techniques to prescribe actionable measures in response to the data analyzed, as we can see illustrated by the example of self-driving cars.

As we look toward the future, emerging technology advancements could create even more dramatic shifts in the workers’ compensation landscape. Imagine widespread use of wearable tech, with sensors embedded into everyday items such as clothing, shoes and hats, designed to support and track injury recovery. For injured employees requiring surgery for knee, hip or possibly even skin replacement, 3D scanners and printers could provide a more personalized approach and a faster recovery process than current practices. Safety programs could captivate the attention of workers as they are delivered using virtual, augmented or mixed reality techniques.

Now is an exciting time for the industry. Both employers and employees are capitalizing on the wave of technological change with an eye toward improving the efficiency of the entire system. However, at the center of these tech advancements remains one constant – the injured employee. Those technologies making a lasting impact will be those designed to improve and enhance the overall employee experience associated with the unanticipated and unfortunate workplace event.

Jarrod Magan, VP Client Technology Services

For an expanded look at the impact of technology on workers’ compensation today and tomorrow, read these additional articles from Jarrod Magan, originally published in WorkCompWire’s Leaders Speak series:

 

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Freepik-Medical-SettlementWhat happens when you experience a significant large loss at your organization? We recently supported one of our clients through such an event and wanted to share lessons learned in the hopes they can help other employers be mindful of how structured settlements can be a valuable tool when taking care of those involved.

Less than two years ago, one of our clients experienced a significant large loss. While we can’t provide all the details, the impact is evident even at a high-level view. This particular loss had catastrophic exposure as soon as the first claim was called in, involving more than 30 separate incidents which had occurred over a long period of time. The result was 30 individual claims, many including long-term healthcare with the potential to cost millions of dollars. In addition to the new injuries, many of the affected workers were already in poor health, which would only decrease their ability to heal and make it more difficult to receive the treatment they needed.

The client in this scenario had a significant self-insured retention, as well as two levels of excess. Upon the first report of the accident, it was evident the first level of excess was instantly going to be put on notice. The client’s primary focus from the start was to care for their workers, but their goal was also to handle claims appropriately in an attempt to mitigate expenses to the point where the second level of excess would not be reached. This was a lofty goal, but it gave our team a financial ceiling to work within.

The client service manager (CSM) for this client immediately jumped to action, making sure all involved parties were included and informed early in the process.

Defense counsel was involved from the beginning as it was anticipated many of the claimants would seek immediate counsel. In addition to defense counsel, the CSM understood that a loss of this nature was going to require a great deal of financial expertise to be able to handle claims appropriately while meeting the client’s goal of not crossing over into the second level of excess. This is where Galaher Settlements’ nationwide network of brokers, experience in working through settlement negotiations, and guidance in providing the right financial direction made a difference in the outcome.

The first step was to bring in a broker who was both familiar with and local to the area. The broker would work side by side with defense counsel to ensure understanding of financial goals and how to achieve those goals on behalf of the injured workers and our client. The broker also helped to create a bridge between the parties on the ground locally and the Sedgwick examiner.

In this situation, compensability, diagnosis and treatment were never in doubt, which allowed us to move forward rather quickly toward resolution for the injured workers. Within a year of the claims being opened, it was clear settlement negotiations were going to start early. The early start would hopefully help to mitigate losses and support a crisis management plan.

The quick turnaround also meant defense counsel and the examiner would need to quickly grasp the financial impact of each claim. One of the main issues in this case was that each worker had their own set of comorbidities with their own set of medical needs; there would not be a single global settlement to close all claims. In addition, each had their own counsel; defense, examiner and broker would need to be prepared to negotiate a settlement with 30 different individuals, ensuring each was fairly treated and made whole, while also being mindful of the fiduciary goals of the client. The impact of the Galaher broker was immediately clear, as it allowed the examiner and defense counsel to quickly asses the financial impact of each case and prepared them to negotiate settlements. The local broker was able to attend every mediation conference in person, running numbers for the parties and explaining the value being negotiated to both sides of the table.

Of the 30-plus claims being negotiated, only about a third of them ended up settling with a structured settlement, however, by having the structured settlement broker present during all negotiations they were able to give an accurate representation of the cash settlements’ true value. With this level of expertise – and with all parties on the same page – the results achieved met the objective of caring for the individuals involved, while also meeting the goals of the client.

In less than two years from the initial date of accident, all claims were settled without the client reaching their second level of excess.

Do you have experience with a similar type of event with lifetime exposure or high-dollar value? How have you been able to utilize structured settlements to ease a large loss?

Matthew Zink, MPA, Manager Medicare Compliance & Structured Settlements

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OTC-threat-imodium-blogThree weeks ago, I was wrapping up a discussion with a client and fellow Sedgwick colleagues on the opioid epidemic. Someone in the room received the unexpected text that Prince had died. In the next few moments, without any other information, my fellow pharmacy colleagues and I started thinking to ourselves what could have possibly led to his death. Our meeting ended shortly thereafter and when I reconvened with my colleagues outside, we had all completed the mental exercise in our head, considering the news of an emergency plane landing in the days leading up to Prince’s death. This sounded like a drug overdose.

As details about his death continue to slowly leak into the headlines, news outlets are now beginning to give more air time to the opioid issue that seems to be at play. It seems like for the first time, the media is beginning to provide the coverage this epidemic requires. If there is anything good that can come from a story of another life lost due to opioid abuse, it is awareness and action. These stories can serve to make us aware of how pervasive this issue has become, while also forcing us to act for a better way forward.

One week after the death of Prince, another headline quietly broke regarding the opioid epidemic that requires our awareness and continued action. At the end of April, The Annals of Emergency Medicine published a case report involving two separate cases. Both cases involved single men, ages 24 and 39. Both men in the report had a history of opioid abuse and both were being treated with a medication designed to help them with their opioid addiction. Unfortunately, their addiction was so intense that they both started looking at unlikely alternatives to get their next fix. Both men lost their lives due to an overdose of loperamide, an over-the-counter (OTC) medication more commonly referred to as Imodium. It’s also been called “poor man’s methadone.”

Most of us have heard of loperamide or Imodium and most likely we have some in our medicine cabinets at home. Loperamide, while not considered an opioid, actually has a place on the opioid family tree, but on a somewhat distant branch as a distant cousin. The OTC product is effective in treating diarrhea because it acts in a similar way in the gut that other opioids do, by causing constipation. While loperamide has the ability to work on the same gut receptors that morphine would, in prescribed amounts it will not affect other receptors throughout the body that morphine does. Yet, if someone was to take enough of the medication, they would realize a high similar to that of an opioid.

One of the men from this case report was found with six empty boxes of loperamide next to him and there are reports of some people taking upwards of 100 to 200 tablets per day. At these high doses, the risk for overdose and death greatly increases. If the person doesn’t succumb to respiratory depression, serious heart rhythm changes can occur, which can lead to death.

Dr. Robert Hall, Medical Director of Optum, recently said about this alarming trend, “The inappropriate use of Imodium for the purpose of generating euphoria further illustrates the challenges and severity of drug addiction in this country, in that people would knowingly choose to take a medication despite its risks of further harm. That is the definition of addiction.”

The Annals of Emergency Medicine report cited a 7-fold increase in calls related to loperamide abuse or misuse from 2011 through 2015. The national poison center also noted a 71% increase in calls related to intentional loperamide exposures from 2011 through 2014.

In the coming weeks, I expect some will push that we put loperamide behind the counter, like we do with pseudoephedrine. Such a move would make it harder to abuse loperamide, but we must realize it won’t fix our addiction problem. Those of us in the Sedgwick Pharmacy Program realize that the best way to advocate for someone is not only to advocate what we are against, but what we are for. When it comes to this issue, we will continue to demonstrate how caring countsSM by advocating for safer prescribing, clinically appropriate alternatives, and for solutions that help the whole person return back to a normal way of life.

Paul Peak, PharmD |  Director Clinical Pharmacy Complex Pharmacy Management

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national-suicide-lifeline_149852_2Life is precious!  The disturbing news hit the press late last month about the alarming escalating rates of suicide in this country.  The overall suicide rate rose by 24% from 1999 to 2014 according to the National Center for Health Statistics. This led me to contemplate why this is happening and how we as humans can help support others.  As I was deep in thought about the impact suicide has on all of us, Sedgwick launched caring counts℠ which is an excellent fit for the discussion.

Recently I began volunteering as a crisis counselor.  It is very rewarding to make a positive impact on someone’s life.  I have to say it totally changed the way I approach my everyday life.  You never know what is going on with the person next to you.  We all have things we are dealing with and we are sometimes not really able to focus on anything else other than our own problem. It could be a recent death of a loved one, a serious medical condition, a worry about our child or simple body aches and pain.

Now when a person in a retail setting is rude or terse with me, my first thought is I bet something is really bothering that person. I find myself trying to be especially kind and nice so that maybe I can be the one to help them have a more positive day. Before my volunteer work, I think I was too quick to judge and feel they should have treated me better.

Human beings are the only species on the planet that can override the survival instincts and actually make a decision to end their life. The remaining question is always why did they do it and how did they get to such a dark place that led them to believe the world would be better without them? These questions are painful and leave behind a legacy of sadness, guilt and “what ifs” for those left behind. Wouldn’t the world be a better place if we were able to see the pain inside of someone and help them feel they are important?

There have been a few studies conducted on those who committed suicide and left a note. In the analysis of these notes the primary factor that seemed to determine whether a person committed suicide was their prevalent belief that the world, their family and friends would be better off without them because they felt they were such a burden. This was a more pronounced factor than feeling depressed and hopeless and is believed to be a key driver behind intentional suicide.  [1]

Caring really does count! It doesn’t require much to be nice, speak kindly, show empathy and help someone whether or not you perceive they are worthy. In the end we are all accountable to each other as human beings.

National Suicide Prevention 800-273-8255

Crisis Text Line: Text “Go” to 741-741  (free for most carriers)

  1. Joiner, T. E., Pettit, J. W., Walker, R. L., Voelz, Z. R., Cruz, J., Rudd, M. D., & Lester, D. (2002). Perceived burdensomeness and suicidality: Two studies on the suicide notes of those attempting and those completing suicide. Journal of Social and Clinical Psychology, 21(5), 531-545.

National Center for Health Statistics  www.cdc.gov/nchs

TeresaBartlett-180hDr. Teresa Bartlett, SVP, Medical Quality

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DrugTakeback2016Participate in National Prescription Drug Take-Back Day today, Saturday, April 30 from 10:00 a.m. – 2:00 p.m. and you could save a life.

National Prescription Drug Take-Back Day was established in 2010 by the Drug Enforcement Administration (DEA) to help reduce prescription drug risks and encourage safety. Last September, Americans turned in 350 tons (over 702,000 pounds) of unused or unwanted prescription drugs at more than 5,000 sites operated by the DEA and more than 3,800 of its state and local law enforcement partners. Overall, in its 10 previous Take-Back events, DEA and its partners have taken in over 5.5 million pounds – more than 2,750 tons – of pills.

This initiative addresses a vital public safety and public health issue. According to the Centers for Disease Control (CDC), opioid overdose deaths reached record levels in 2014. A CDC press release reported that 47,000 Americans died from drug overdoses in 2014, which was a 14% increase over the previous year.

Everyone must be accountable for the medications they are prescribed. As providers, we need to educate our patients about the options for safe disposal of unused and unwanted medications. And National Drug Take Back Day is one of them. Pain and other symptoms requiring prescriptions are often resolved before the entire prescription is used. More often than not a large proportion of those medications end up in the medicine cabinet or the kitchen drawer.

As claims examiners, nurses, pharmacists and physicians, it is our duty to promote awareness across the injured population and to care for our consumers, patients and – by extension, their families, friends and communities. Unused medicines sitting at home are highly susceptible to diversion, misuse and abuse. Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet. Statistics prove that childproof drug packaging or top cabinet shelves are not enough to protect children and teenagers from an unintentional overdose. Throwing medications in the garbage or flushing them down the toilet is not only unsafe, it also has a negative impact on the environment.

On April 30, various local sites will be set up to collect unused, unwanted or expired medications to provide safe and responsible disposal. The service is free and anonymous, no questions asked. We encourage you to help increase awareness of this program and take the opportunity to clean up your own medicine cabinet.

To find a collection site near you, use the search tool on the DEA website. You can also contact the DEA’s call center at 800.882.9539 or your local law enforcement agency. Check out the Sedgwick team’s National Prescription Drug Take-Back Day blab and share a picture with us of your local collection site if you take time today to participate in this life-saving event.

Shanea McKinney, Pharmacist, Sedgwick

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Today isworkersdaymemorial Workers’ Memorial Day, an annual international observance to pay tribute to workers who have died or experienced exposures to hazards on the job.

Thanks to the efforts of the Occupational Health and Safety Administration (OSHA) and talented risk management and safety professionals across the nation, U.S. employers maintain very high standards when it comes to safe working conditions. Nevertheless, unforeseen accidents happen, and regrettably 4,679 U.S. people died in 2014 from work-related injuries, according to the Bureau of Labor Statistics.

Because of Sedgwick’s role in the workers’ compensation arena, we know all too well the life-changing impact that a catastrophic injury or fatality has on the fallen employee’s extended family and team of colleagues. Managing claims that involve loss of life is some of the toughest work that we do. Because of our caring countsSM philosophy, our clients entrust us with the responsibility of dealing compassionately with employees who have experienced a loss at work and families who have lost a loved one. These interactions can be painful, and our colleagues are charged with making these unspeakably difficult situations a bit easier for those turning to us for assistance during a time of grief.

A meaningful way that Sedgwick gives back to the industry and honors workers killed on the job is by supporting Kids’ Chance, a national organization founded to ease the burden of families who face loss of income due to death or disability as the result of a workplace injury. Kids’ Chance provides educational scholarships to the children of fallen workers, and we are proud to join them in this worthwhile endeavor. Click here to read more about our special partnership with Kids’ Chance.

I am proud to be part of the most caring claims team in the business.  At Sedgwick, caring counts.

Darrell Brown
Chief Claims Officer
Sedgwick

 

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lightning-ID-1005000According to the National Lightning Safety Institute, it is not uncommon for lightning to strike a vehicle, moving or parked. The effects of the strike vary from vehicle to vehicle depending on the circumstances related to the storm and vehicle type.

For insurance adjusters, it is easy enough to determine that major visible damage to the vehicle – such as large burn marks in the paint, shattered windows or blown tires – was, more likely than not, caused by a major lightning strike.  In other cases, the damage may not be as obvious and may be misidentified as stone chips.

Modern-day vehicles are more susceptible to the effects of lightning due to the amount of microelectronics controlling vehicle systems. Newer vehicles have engine control modules, body control modules, shift control modules and door control modules, to name a few. All of these components have individual fused circuits; however they use the same ground path. These low-voltage components can be damaged when the polarity of voltage is reversed by energizing the ground path. Because today’s vehicles use fuses on the power-supply side of a component, the fuses may still be functional after a lightning strike event though the individual component may be destroyed.

A recent case we took care of involved a new 2015 Jeep Cherokee parked for display in a parking lot. A lightning-producing storm came through the area. One of the salesmen noticed the driver’s window was in the down position. He identified the vehicle and got the keys to roll the window up. The vehicle did not respond to the key. The service department was contacted to jump start the vehicle. The vehicle still did not respond. After days of diagnosis by the technician, small marks were observed on the metal luggage rack above the driver’s door. Those marks, after microscopic examination, were determined to be from a lightning strike. Further examination of the vehicle revealed three strike points on the top edge of the luggage rack, one discharge mark exiting the luggage rack, one entry mark in line with the luggage rack discharge mark on the body above the driver’s door, and a final exit mark located at the right rear aluminum alloy wheel.

Strike area on front of luggage rack

Strike area on front of luggage rack

Closer view of three points of contact

Closer view of three points of contact

Microscopic view of large center strike point; note: mound in the center of strike

Microscopic view of large center strike point; note: mound in the center of strike

Microscopic view of small strike point; note: mound in center of strike

Microscopic view of small strike point; note: mound in center of strike

Discharge point from luggage rack to body

Discharge point from luggage rack to body

Microscopic view of discharge point from luggage rack to the vehicle body; note: no mound in discharge area

Microscopic view of discharge point from luggage rack to the vehicle body; note: no mound in discharge area

UIS-lightning-7-lr

Discharge point from right rear rim to earth

UIS-lightning-8-lr

Microscopic view of the discharge point on the right rear rim; note: no mound in the center of the damage point

Single microchip damage in door module; this module was closest to the strike point

Single microchip damage in door module; this module was closest to the strike point

It was discovered during the systems diagnosis process that the electronic modules located between the strike point (luggage rack) and the discharge point (right rear rim) was shorted. There were no open fuses in the vehicle. None of the vehicle’s wiring circuits or connectors showed any thermal damage. The affected modules were removed from the vehicle and further diagnosed in the laboratory. Each module affected showed isolated internal circuit board damage in the way of burning and microchip damage. The harness connector terminals showed no damage. The voltage spike on the ground side of the circuit was enough to destroy at least one of the circuit board microchips in multiple electronic modules resulting in the component internally short-circuiting.

UIS-lightning-10-lr

IC damage from over voltage on the power side; Dodge engine control module

The damage resulting from the lightning strike on this vehicle’s modules was compared to damages observed on a different vehicle module circuit board resulting from overcharging. There was a significant difference in the electrical damage between over voltage applied to the power side of the module versus power applied to the negative side of the module. Over voltage damage on the power side of the circuit showed a majority of the integrated circuit (IC) microchips were damaged, the power transistors were blown, and multiple fuses were affected.

If lightning strikes, take a closer look. Examining a vehicle’s module circuit boards is an effective way to determine what happened to the electronics and move a case toward resolution.

Mike McGee, CFI, CFEI, CVTI, ASE
Senior Investigator, Investigative Locksmith
Unified Investigations & Sciences, Inc., a Sedgwick company

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CMandel-RIMS2016-RMMaturity2Earlier this week at the annual RIMS conference, I partnered with Iman H. Al-Gharabally, Team Leader ERM, from the Kuwait Petroleum Corporation (KPC) to delve into the nature of mature and, by inference, effective risk management programs. My partner, in case study format, shared the details that defined the journey she has been on to instill risk discipline and maturity into this Fortune 100-sized state-owned oil and gas concern. After ten years, she has accomplished almost all that she set out to do. Yet, because as I like to say, risk management should never be labeled a “project,” the job is never done. In fact, as she shared, some big, aspirational goals remain that are critical to long-term effectiveness and sustainability.

As a prelude to her case presentation, and based on my tenure as the head of enterprise risk management (ERM) at USAA (2001-10), as well as my subsequent work as an ERM consultant, I spent time delving into the more generic questions that surround risk management maturity and, by extension, effectiveness and ultimate success.

The starting point for this discussion should be two key questions. First, how are you defining “risk” and have you driven a consensus among key stakeholders about that definition? The second and related issue is both which risks are you going to manage and where on the loss curve do they fall? This may sound simple and straightforward, but the reality is that many risk leaders have responsibilities for only a portion of the risks organizations face – often only the insurable risks. If that’s the case, you have your answer to both concerns nailed.

If, on the other hand, you are a risk leader with broader accountability for more or all risks (ERM) that could impact an organization (both negatively and positively), then the first question of “what is a risk to your firm?” requires clear definition. The most commonly accepted definition of risk is “uncertainty.” I like this simple definition and it captures the most central element of concern. However, the real challenge remains the question about the level of uncertainty (aka frequency/likelihood) and, to many, even more important is the level of impact or severity. Here’s my favorite chart to help illustrate this concept:

CMandel-RIMS2016-RMMaturity-chart
Do we care more about likelihood or impact or are they equal? If the above is a typical loss curve, then the dotted line represents what most would call the “expected” level of loss and the black swan sits out on the tail of this curve, where the x-axis is impact of severity of loss and the y-axis is the frequency or likelihood of loss. While many hazard-focused leaders put their attention on risks at expected and to the left of the dotted line, the challenge is where to the right of the dotted line should one be managing? While the possibility of loss becomes increasingly remote as you move out towards the tail of the curve, the impact of events become more destructive. Key questions that must be answered include:

  • What level of investigation do we apply to remotely likely risks?
  • How do we apply limited resources to remotely likely risks?
  • Do we have a consensus among key stakeholders as to what risks we should focus on and how?
  • Do we have or need an emerging risk management process?
  • Do we have a consensus on and clear understanding of how we define risk in our organization?

These issues are the starting point to the risk management maturity question. From these answers, you can chart your course for what this will mean to your firm. The answers will define the process elements of maturity that will be needed to achieve your target state. But we need to define what risk maturity is in order to track progress towards it and to ensure that stakeholders are aligned around the chosen components.

In our RIMS session, I reviewed the common components among the numerous risk maturity models that are most often used. Here’s one generic set of attributes of maturity:1

  • Specifically defined appetite and tolerances for managing risk
  • Management support for the defined risk culture and direct ties to the corporate culture
  • Disciplined risk process aligned with other functional areas
  • Process for uncovering unknown and/or poorly understood risks
  • Effective analysis and measurement of risk, both quantitatively and qualitatively
  • Collaborative focus on a resilient and sustainable enterprise

The first, and I think most thoroughly developed model, comes from the Risk and Insurance Management Society (RIMS).2 It was developed some ten years ago or so, but remains in my opinion a simple yet comprehensive view of the seven most important factors that inform risk maturity and that, when well-implemented, should drive an effective approach to managing any risk within your purview.

The components of the RIMS model include:

  • Adopting an enterprise-wide approach, supported by executive management, which is aligned well with other relevant functions
  • Determining the degree to which repeatable and scalable process is integrated in the business and culture
  • Determining the degree of accountability for managing risk to a detailed appetite and tolerance strategy
  • Determining the degree of discipline applied in using the elements of good root cause analysis
  • Determining the degree to which a robust emerging risk process is used to uncover uncertainties to goal achievement
  • Determining the degree to which the vision and strategy are executed considering risk and risk management
  • Determining the degree to which resiliency and sustainability are integrated between operational planning and risk process

Like all risk management strategies, no two models I’ve seen are exactly the same and there is no one way to accomplish maturity. Importantly, every risk leader needs to do for his or her organization what the organization needs and will support.

During our session, I touched on two other maturity models and concepts and contrasted them with the RIMS model. The first of those other models is the Aon model3 which, like RIMS’ model, enables multiple levels of maturity and methodology for charting progress towards an ideal state sought. Unique characteristics of the Aon model include:

  • Assurance that the board understands and is committed to the risk strategy
  • Effective risk communications
  • Emphasis on the ties among culture, engagement and accountability
  • Stakeholder participation in risk management activities
  • Use of risk information for decision-making
  • Demonstration value

This is not to say that the RIMS model ignores these issues; simply, a different emphasis is made between the models.

The third model we discussed is from Protiviti4 on risk maturity as it relates to the board of directors’ accountability for risk oversight. A few highlights of their perspective include:

  • Emphasis on the risks that matter most
  • Alignment between policies and processes
  • Effective education and use of people and their place in the organization
  • Assurance that assumptions are supportable and understood
  • Board’s knowledge of asking the right questions
  • Understanding of the relationship to capability maturity frameworks

Certainly the good governance of organizations is critical to ultimate success and the board’s role in it is the apex of that consideration. If the board is engaged and accountable for ensuring their risk oversight responsibility is effectively executed, the successful execution of the strategy is likely and, by inference, risk will have been effectively managed as well.

This background information provides the foundation for the KPC case, summarizing key considerations for addressing a risk maturity strategy:

  • There is no one right approach; each organization must chart their own course aligned with their culture and priorities
  • Risk must be treated as an integral aspect of strategy
  • Like all corporate processes, there should be a focus on additive value
  • Risk maturity has helped secure documented valuation premium for studied users

My colleague from KPC illustrated the key tactics of her plan, how her maturity strategy related to corporate strategy and priorities, the specifics of what KPC accomplished over ten years of development and implementation, how risk and risk management drove performance results and what remains to be done to achieve their longer term aspirations. By listening to her insights, hearing about her ERM results, and learning more about the impact that has been achieved for her major, complex, corporate entity, risk managers we spoke with this week took a step toward being able to translate a successful ERM journey into a plan for their own and understanding key tactics to exploit and pitfalls to avoid as they craft risk management strategy.

I hope this insight helps you gain perspective, as well. To continue the ERM discussion, please join me and other influencers in our industry as we collaborate in the Enterprise Risk Management group on LinkedIn.

Chris Mandel
SVP, Strategic Solutions, Sedgwick
Director, Sedgwick Institute

 

1 Source: How Can Risk Maturity Model Benefit Your Risk Management, www.RiskMethods.net
2 Source: Why a Mature ERM Effort is Worth the Investment, RIMS, www.rims.org
3 Source: Aon, Inc., Risk Maturity Index, aon.com/rmi
4 Source: Protiviti Inc., Board Perspectives: Risk Oversight, www.protiviti.com

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Alpha SquareTime spent at RIMS is always worthwhile. We are fortunate to enjoy many opportunities to connect with friends, clients, colleagues and other industry partners, and it has been a pleasure spending time in San Diego this year. However, in the midst of all the activity, I believe those of us at #RIMS2016 have become keenly aware of the homeless population around us in this city.

After some research, my eyes were opened to the realities of the homeless issue here. California accounted for nearly 21% of the nation’s homeless population in 2015 and San Diego’s is the fourth largest homeless population among cities in the U.S. 48% of these individuals sleep on the streets. Last year, the total of homeless individuals here rose to 8,742 from 8,506 the prior year; it peaked at 10,013 in 2013. I learned all of these things through Alpha Project for the homeless, a San Diego organization empowering individuals, families and communities by providing work, recovery and support services to people who are motivated to change their lives and achieve self-sufficiency.

Alpha Project

Today, we visited the Alpha Square facility and had an opportunity to meet with Bob McElroy, President and CEO of Alpha Project. After seeing the facility and understanding their model for sustainable housing can make a real difference for the homeless, I am excited Sedgwick has decided to pledge $10,000 to help the Alpha Square facility in its efforts to care for over 200 residents who are no longer homeless. Alpha Project’s methodology is firmly entrenched in the idea that homeless individuals are an asset to the community when provided with opportunities rather than handouts. They offer affordable housing, residential substance abuse treatment, supportive housing for people with special needs, basic and emergency services for the homeless, transportation assistance, employment training, preparation and placement, education, outreach and prevention, and community services. Alpha Project strives not to manage homelessness, but rather to end it for its clients.

Alpha Project also supports individuals through mental health counseling; this aligns closely with Sedgwick’s focus on mental health and well-being, and we applaud the organization for working in such a proactive way to help individuals and families find appropriate care and resources. We know that one out of four people, or nearly 61 million Americans, suffer from mental illnesses, and we are committed to continuing the dialogue, finding ways to support individuals, helping them improve productivity and gain access to care, advocating for them in times of need, and reducing the inherent stigma attached to mental illness.

The people and organizations in our industry are known for their generosity. It has been incredible to see such continued and growing support for RIMS’ annual community service projects, as well as charitable initiatives through Kids Chance and the Spencer Educational Foundation. We were honored to sponsor and promote this year’s Spencer 5K Fun Run, which helped raise $50,000 for industry scholarship programs.

We encourage that giving spirit to spread even farther; join us in showing how caring counts℠ – pledge your own contributions to the Alpha Project at AlphaProject.org.

Jonathan Mast, Director Social Media, Sedgwick

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RJoinesEditor’s Note: Robin was awarded the prestigious Ron Judd Heart of RIMS Award at the 2016 Risk and Insurance Management Society (RIMS) annual conference in San Diego, CA. She was recognized for her outstanding contributions to the Memphis RIMS chapter and advancing the study of risk management throughout the area. Her fellow Sedgwick colleagues are very proud of Robin and her accomplishments on behalf of Sedgwick. Congratulations, Robin!

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“Tell me and I forget, teach me and I may remember, involve me and I learn.”  -Benjamin Franklin

When I began my risk management career, I was completely overwhelmed. Everyone in the industry seemed to have their own language that I had not yet learned, and I was not sure that I would ever “get it.” Were it not for some key people who mentored me, learned alongside me, and some who did both, I would not be where I am today.

At an early point in my career, I was asked to participate in my local RIMS chapter and, despite my intimidation and hesitation, I agreed. I have never once regretted that choice. I made professional connections, learned more about my chosen industry, and began to feel like what I was doing mattered to risk management students and professionals outside of my company. As years passed, I became more deeply involved in Memphis chapter leadership, and was privileged enough to make critical connections (and dear friends) at the RIMS Society headquarters in New York. Through conversations with these individuals about how I could become more involved, I volunteered and was fortunate enough to be selected for the Society’s Member and Chapter Services Committee. Serving on this committee over the course of four years, in addition to making lifelong friends, I was able to see examples of amazing things that other chapters were doing to effect change in their areas, and was further inspired to contribute to my local chapter.

I have been told that it is “better to be lucky than good,” and this has proven to be more than true for me. I was lucky enough to become involved with several universities in the Mid-South through my work with the Memphis RIMS Chapter, and now have longstanding relationships with the remarkable faculty leadership at the University of Mississippi, University of Central Arkansas and Mississippi State University. Through my more recent involvement with the Spencer Educational Foundation, the RIMS Student Advisory Council and Gamma Iota Sigma, my involvement and educational connections have expanded to a national level, and I am continually heartened by the promise and energy that I see in our next generation of risk management leaders.

I have been privileged enough to recruit, hire, and cultivate two of the most amazing risk management professionals I know – Matt Neil at Wright Medical and Anna Bendgen at Sedgwick. I can hardly wait to see where their futures take them, and hope that I have had some small impact on their professional development and direction. Additionally, my remarkable daughter Judy, currently a sophomore in high school, is currently insistent that she wants to pursue a career in risk management. Judy has recently completed her school’s capstone project on the impact of the September 11th attacks on the interaction between business and insurance companies – specifically in regard to contract certainty and policy language, as well as the changes in emergency protocols and the prioritization of business continuity planning within companies, which was fundamentally altered at the company and federal level. Nothing could make me more proud than knowing that at the age of 15, she is already starting to “get it.” She is intrigued by what I do every day, seeing that no two days are the same, none of them are boring, and every single one of them is fulfilling.

I believe that volunteering and mentoring at any and every level is both crucial to the future success of the industry and necessary to cultivate the next generation. Serving as teachers, role models and ambassadors, we not only build new relationships and future professionals, but we strengthen our own connections to others in the industry, and are blessed enough to continually learn from each other.

Robin Joines, SVP Risk Management, Sedgwick