Zimmel: Is the World Riskier Or Safer?
Is the world a riskier or safer place? We
ask Karl Zimmel, director of risk-management
services at UniSource Energy Corp.
Recently we have seen hackers shut
down various online services, and
identity theft is on the rise, thanks to
the bad guys’ use of technology.
The good news is that risk-management tools have been enhanced
to address greater risk.
THE WORLD IS riskier for two ma- jor reasons: J Natural disasters are trending up. J Emerging risks add to the
previous portfolio of risk.
There is empirical evidence that
windstorms in particular are at or
near record levels.
It started six years ago with
Hurricane Katrina and continued
this spring with a large volume of
tornadoes in the U.S. and the tsunami
in Japan. Fortunately for the global
insurance market, only a relatively small
portion of the tsunami was reinsured.
The use of the Internet and general
increase in technology has increased
risk; the cyber risks we see today were
virtually nonexistent 10 years ago.
Director, Risk Management
Services, UniSource Energy Corp.
Member of National Underwriter’s
Risk Managers Advisory Board.
Also, the insurance market has
provided substantial surplus capital to
handle recent catastrophic property
losses generally without significant
Given this increase in risk, it is no
coincidence that many new insurance
products have been developed in the
past 10 years. Right about the year
2000 employment-practices liability
developed into a viable product with
substantial coverage at a reasonable
premium. In a similar timeframe, stand-
alone pollution-liability policies became
viable with good, affordable coverage.
WCEC Reporter’s Notebook: Workers’
Compensation Tips For Risk Managers
THE RISK MANAGERS educational track at this year’s Workers Compensation Educational Conference, held August 21-
24 in Orlando, featured a number of standout
sessions. Here are some highlights.
E At a session on predictive modeling, the
speakers focused on how risk managers can analyze the data they have on file to reduce the cost
and duration of claims and to cut down on fraud.
One of the tips that stood out: Use text-mining
technology that sifts through the notes made by
claims adjusters—which often contain far more
gems of insight than the boxes being checked on
a standard claims form (about age, gender, marital
It’s not uncommon for a claim file to have 200
notes or more—and that could very well be where
the details are that will help identify as early as
possible those claims with the potential to become
problem cases without the right intervention.
E The session “Communicating Metrics to
the CFO to Impact the Finances of the
Company” was unsurprisingly popular. And
the first speaker left no doubt as to his
qualifications on the topic: Fred Pachon, vice
president of risk management and insurance at
Select Staffing, has documented savings for
his company of over $300 million as a result
of his initiatives. And this clearly demonstrated
worth has meant his department has grown
from three employees to 60.
With credentials like that, Pachon obviously
had the audience’s full attention. His advice
for risk managers when talking to the C-suite:
focus on two issues—profit and growth. “It’s
all they care about,” he says. Risk managers
also should focus on disabusing CEOs of the
commonly held belief that insurance is a fixed
cost that can’t be improved upon. Other tips
for the toolbox: CEOs and CFOs love year-over-
year comparisons, peer-marker comparisons
and names named when it comes to top
performers—and their opposites.
E Some advice that definitely struck the crowd in
“Developing and Implementing a Corporate Safety
Culture” as worth trying at home: Invite (don’t
require) workers who have been hurt on the job
to speak to their peers about how the injury
happened—a great (and free) way to reduce the
odds of the event being repeated.
E And finally, advice from keynote speaker Larry
Csonka: Don’t wear a Nehru jacket, or orange bell
bottoms, to your first day of work. NU