All posts by Maria Sassian

Opioids and Workers’ Compensation

By Max Dorfman, Research Writer, Insurance Information Institute

As the opioid epidemic continues to roil the country, it’s easy to forget the number of issues that contribute to its severity. Indeed, for workers injured on the job, compensation can include opioid treatments—which can lead to opioid dependence. With this subject in mind, I spoke to Dr. Vennela Thumula, an author and policy analyst with the Workers Compensation Research Institute (WCRI), who was able to provide insight into opioid dispensing for injured workers.

This interview was modified for clarity.

What are you seeing as far as general trends in prescribing opioids for workers injured on the job, particularly as the opioid epidemic has become a more visible issue?

Our study – Interstate Variations in Dispensing of Opioids, 5th Edition – examined recent trends in opioids dispensed under workers compensation for workers from 27 states who had more than seven days of work loss due to their injury but who did not have a major surgical procedure related to the work injury.

Opioid dispensing to injured workers has decreased substantially in recent years in all 27 state workers’ compensation systems studied. Between 2012 and 2016 injuries followed for an average two years postinjury, the percentage of injured workers with prescriptions receiving opioids decreased by 8 percentage points (in Illinois) to 25 percentage points (in California). Among injured workers receiving opioids, the average morphine milligram equivalent (MME) amount of opioids dispensed per worker in the first two years of a claim decreased in nearly all study states, with 30 percent or higher reductions seen in 20 of the 27 states studied.

Which states are you still seeing higher-than-average prescribing rates for workers injured on the job? Why do you think these states are still seeing such high rates?

After the declines, opioid dispensing continues to be prevalent in some states. At the end of the study period, the percentage of injured workers with prescriptions receiving opioids ranged from 32 percent in New Jersey to 70 percent in Arkansas and Louisiana across the 27 states, and the average MME per worker in Delaware, Louisiana, Pennsylvania, and New York continued to be the highest among the 27 study states.

For instance, in Delaware and Louisiana, the average MME per claim was more than three times the amount in the median (middle) state and over five times that in the state with the lowest amount, Missouri. We should note that although New York is among states with the higher-than-typical amount of opioids, there were substantial decreases in opioids dispensed to New York workers over the study period. We should also caution that these four states have implemented other opioid reforms towards the end or after the study period whose impact could be monitored with more recent data.

I see non-pharmacologic treatments are being used more often for workers injured on the job. What are the most common non-pharmacologic treatments utilized under workers’ compensation?

We see that providers have switched from multi-pronged pain treatments, which involve pain medications (including opioids) and other restorative therapies, to a treatment protocol that more frequently relies solely on non-pharmacologic services. The most frequent non-pharmacologic services billed and paid under workers compensation were physical medicine evaluation; active and passive physical medicine services such as electrical stimulation and hot and cold therapies; and passive manipulations such as manual therapy and massage.

How are these non-opioid pain treatments changing the landscape of workers’ compensation for patients and insurance companies? Are these treatments now prioritized over opioids?

Our first look at the data suggests a shift in treatment patterns away from opioids to non-pharmacologic services, which conforms to the recommendations of opioid prescribing and pain treatment guidelines and policies implemented in a number of states. Many questions remain answered, including the impact of these changing treatment patterns on claim outcomes. We will be talking more about alternatives to opioids for pain management at WCRI’s 36 Annual Issues & Research Conference, March 5 and 6, 2020, in Boston, MA.

 

From the I.I.I. Daily: Our most popular content, November 8 to November 14

Here are the 5 most clicked on articles from this week’s Triple-I Daily newsletter.

 

To subscribe to the I.I.I. Daily email daily@iii.org.

 

 

Hurricane Michael insured losses reach $7.4 billion

Insured losses associated with 2018’s Hurricane Michael reached almost $7.44 billion, according to a recent Florida Office of Insurance Regulation (FOIR) update. The losses consist of residential and commercial property, private flood and business interruption insurance, and miscellaneous coverages. There were 149,773 claims made, and 89 percent of them were closed.

Hurricane Michael became a Category 5 storm on October 10, 2018, and made landfall near Mexico Beach, Florida, in the Florida Panhandle. It was the strongest hurricane to ever hit the Florida Panhandle and the second known Category 5 landfall on the northern Gulf Coast, according to the National Oceanic and Atmospheric Administration. It was the first Category 5 storm to make landfall in the United States since Hurricane Andrew in 1992.

An Artemis analysis of the FOIR report says that based on the run-rate of costs per claim (around $65,890 per claim), another $1 billion could be added to the total before every claim is closed down and that many of the claims remaining open will be among the more costly. Fewer than 69 percent of commercial property claims are closed, compared to almost 89 percent of residential. Business interruption claims are also slow to close and therefore are likely to increase the total.

 

From the Triple-I Daily: Our most popular content, October 31 to November 7

Here are the 5 most clicked on articles from this week’s Triple-I Daily newsletter.

To subscribe to the I.I.I. Daily email daily@iii.org.

House Panel Approves Terrorism Insurance Backstop Reauthorization

“Ground Zero,Lower Manhattan,NYC.”

The House Financial Services Committee on October 31 approved an amended version of the Terrorism Risk Insurance Program Reauthorization Act of 2019 that would require the Government Accountability Office (GAO) to report on cyberterrorism risks and the Department of Treasury to issue a biennial report that includes “disaggregated data on places of worship.”

The Terrorism Risk Insurance Act of 2002 (TRIA), approved after the 9/11 terrorist attacks in New York City and Washington, D.C., provided a backstop to encourage insurers to resume writing terrorism policies. After 9/11, primary insurers sought to explicitly exclude terrorism coverage from their commercial policies, and reinsurers became unwilling to assume risks in urban areas perceived as vulnerable to attack.

TRIA created the Terrorism Risk Insurance Program (TRIP), a federal loss-sharing program for certain insured losses resulting from a certified act of terrorism. TRIP provides a backstop for insurers and has to be periodically reauthorized. It is currently due to expire at the end of 2020.

In addition to the reporting requirements mentioned above, the amended legislation shortens the extension period from 10 years.

The bill says the cyber report should analyze the general vulnerabilities and potential costs of cyberattacks on the nation’s infrastructure and reach conclusions about whether cyberrisk, particularly cyberliabilities, under property/casualty insurance, can be sufficiently covered and adequately priced.

The insurance industry has praised the progress of the extension as well as the proposed studies of cyber exposures. The next step toward TRIA reauthorization is a floor vote in the House of Representatives.

Follow the conversation about the federal terrorism backstop here.

Deer season creates road hazards

By Max Dorfman, Research Writer, Insurance Information Institute

Deer season—which usually runs from October through December—can be a dangerous time for motorists. During this period, deer are moving frequently and often cross over dangerous areas, like highways and other heavily-trafficked areas.

According to the Insurance Institute for Highway Safety, there are more than 1.5 million accidents related to deer every year, which result in over $1 billion in vehicle damages. And these accidents aren’t merely expensive: 211 people died in collisions with animals in 2017.

Indeed, between July 1, 2018 and June 30, 2019 one out of every 116 drivers had an insurance claim from hitting an animal, according to State Farm. These claims were most likely in West Virginia, with one in 38 people making an insurance claim based on this kind of accident.

With this in mind, it’s important to take precautions when driving during this period of the year. Deer often travel in groups, so it’s vital to slow down with even one deer on the side of the road. Additionally, try to brake instead of swerving if faced with a crash. Above all, be alert—there’s no substitute for prudence during deer season.

The Insurance Information Institute has Facts & Statistics on deer vehicle collisions here.

Brexit and Lloyd’s of London

By Max Dorfman, Research Writer, Insurance Information Institute

getty images

Brexit and Lloyd’s of London

The latest (but perhaps not the last) Brexit deadline is set for January 31, 2020. Yet the insurers most affected by the U.K.’s divorce from the European Union (EU) have plans in place to continue business with minimal disruption. Indeed, U.K. businesses have been operating in the EU’s Single Market for so long, many are questioning how these entities will adapt to increased regulations. One entity where these questions are particularly relevant is Lloyd’s of London.

What is Lloyd’s?

Lloyd’s is not an insurance company, but a marketplace where capital and underwriting converge on a global platform operated by the Corporation of Lloyd’s. Lloyd’s includes five key stakeholders: syndicates, which function as underwriting entities, assuming risks and paying claims; managing agents, who capitalize and operate the syndicates; brokers, who are intermediaries between policyholders and syndicates; coverholders, which are local MGA’s that underwrite risks on behalf of a syndicate/managing agent (and which also enables the Lloyd’s market to operate globally without establishing local offices); and insurance buyers, many of whom buy insurance through Lloyd’s for complex, emerging or otherwise unique risks. Syndicates specialize in different types of insurance and reinsurance, often participating with each other on a subscription basis (meaning they only take on a part of the risk and pay part of the claim).

The consequences

With gross global premiums written at almost $45 billion in 2018, 13 percent of that generated by the post-Brexit European Union, there were legitimate concerns about how Brexit would affect Lloyd’s role in the EU marketplace. Due to Brexit, “non-admitted” U.K. insurers will no longer be able to conduct insurance business in some EU countries, meaning that nonauthorized insurers cannot conduct business in regulated insurance industries in a different market (which is currently the case in France, Italy, and under certain circumstances, in Germany).

However, Lloyd’s quickly pivoted to ensure that it will continue to provide non-life insurance throughout the European market, regardless of Brexit’s outcome. Although it is anticipated that most of the European Economic Area (EEA) reinsurance will still be written through London on a cross-border basis, in case of a hard Brexit non-life insurance could  be covered by Lloyd’s Brussels, which opened in 2018.

Still, non-EU coverholders for Lloyd’s of London—who could previously conduct business throughout the EU without physical offices and permissions from member states—will have to seek proper authorization from the EEA under a “Coverholder Appointment Agreement” (CAA) with Lloyd’s Brussels. This may affect where managing agents raise capital.

Will these new regulations be felt in the US?

A very substantial portion of Lloyd’s international business—over 40 percent of global premiums as of 2018 —is generated in the U.S., with significant exposure on the U.S. insurance lines. While the new regulations will not directly affect business between the U.S. and U.K., the primary concern will be the volume of business in the EEA, which could potentially decrease. But if Lloyd’s pivots some of its business away from Europe, the U.S. could get more attention. In fact, John Neal, Lloyd’s chief executive, stated in an interview with the Financial Times that “If you’re in insurance or investment banking or banking, one dollar in two dollars of everything you do is still U.S. derived, so it’s very important that you maintain your connection and your relevance with the U.S. market.”

 

 

California Wildfires still burning into November

By Janet Ruiz, Director of Strategic Communications, Insurance Information Institute

On October 30 the National Weather Service issued its first-ever extreme red flag warning for Southern California and expects hurricane-force winds to continue until the first weekend in November. On October 31, 19 million people remained under red-flag warnings in the area. Thom Porter, head of Cal Fire, said that at least 20 separate wildfires broke out in Southern California on October 30.

In Northern California the Kincade Fire is 60 percent contained after burning for a week. Evacuees are now returning home. I watched the Kincade Fire from the northern side on Mt St. Helena. Airplanes and helicopters made their way in and out of the fire non-stop and firefighters were able to keep the fire out of the towns of Windsor and Healdsburg.

Here’s a photo from my back yard:

According to the LA Times, an intense surge in pre-deployed firefighting resources prevented the fire from destroying homes so far. Officials say the preparations for the winds have given them a fighting chance that they didn’t have last year, when the Woolsey fire — one of California’s most destructive on record — burned more than 1,000 homes and resulted in three deaths. Officials have said the battle against that fire was hampered by a lack of resources.

Legislation passed in Sacramento, first signed by Gov. Jerry Brown and then made permanent under Gov. Gavin Newsom, has allocated millions of dollars to pre-position firefighting resources during severe fire weather.

When you return home it is important to start the claim process right away.

Contact your agent or company to find out:

  • What’s covered under your homeowners or business policy – Fire is a covered loss
  • How to get additional living expenses and temporary housing – Keep receipts
  • Coverage for property, contents, outbuildings and loss of use – Take photos of damage
  • A timeline for the claims process
  • How to get estimates for rebuilding

Write down your questions and be sure to get them all answered. The claims adjusters are your financial first responders and are here to help you recover and rebuild!

SO, HAVE YOU THOUGHT ABOUT THE FUTURE…? The Coming Golden Age of Insurance

By Sean M. Kevelighan, CEO, Insurance Information Institute

“What does the future of insurance look like?” It’s the question that’s launched a thousand publications and panel discussions. And it’s an essential one that covers a lot of ground. In my case, literally.

The Insurance Information Institute (I.I.I.) partnered recently with InsureTech Connect (ITC) and Gamma Iota Sigma (GIS) at the two organizations’ flagship events, InsureTech Connect 2019 in Las Vegas, and Gamma Iota Sigma’s 48th annual International Conference in Dallas. What we came away with from these back-to-back events were two distinct but nevertheless complimentary visions of how things are now and what’s to come.

Briefly put, the future of insurance will be largely to make good on past promises. And this is not because we’ve been remiss in our duties but because people now are able to build and implement the right tools for the job. Speaking before thousands of InsureTech Connect 2019 attendees, Glenn Shapiro, president of Allstate Personal Lines, was blunt.

He noted making policyholders wait several days for an auto repair estimate that takes only a few hours to complete is: “[N]ot a service experience that you would accept in any other part of your life!” Embracing Insurtech and the power of innovation enables insurers like Allstate to automate processes and replace outmoded legacy systems to make insurance a truly customer-driven business. Insurers are now able to provide security and empowerment to their customers.

Which brings us to … resilience.

Early in 2019, ITC selected the I.I.I. to co-host its Resiliency Innovation Challenge, a four-month-long competition for Insurtech start-ups whose businesses are focused on catastrophe resilience. Fast forward to the final day of InsureTech Connect 2019, and an impressive field of 22 Insurtechs was pared down to three outstanding finalists: WeatherCheckTrue Flood Risk and Cowbell Cyber, whose CEOs presented their products and businesses to a panel of experts. The group included Susan Holliday, senior adviser to the International Finance Corporation in Washington, D.C.; Arlene Kern, a strategic innovation scout at Munich Reinsurance Co.; Lee Ng, vice president, Innovation, at Travelers Cos. Inc.; and Kevin Pray, vice president, Innovation, at The Hanover Insurance Group.

The finalists come at the problem of catastrophe risk from markedly different angles—preparedness, risk assessment, and risk management, respectively. The beauty of this diversity of thought was that we had disparate applications of data coalescing around the power of resilience. Congratulations to Demetrius Gray, CEO of WeatherCheck, who walked away with the first-place trophy, as well as to all the competitors who made the inaugural Resiliency Innovation Challenge a huge success.

One of the key takeaways from the Challenge was how resilience is benefiting and inspiring people in ways other functions of our industry cannot. Innovation and, more important, awareness of new solutions to manage risk makes the goal of creating safer homes, businesses and communities an attainable one. Young men and women embrace this philosophy.

We saw this first-hand in students who’ve chosen to study risk management and insurance at the Gamma Iota Sigma International Conference in Dallas, TX. There, I was honored to moderate a panel discussion titled, “Plan. Respond. Recover: The Power of Resilience,” with Dr. Nidia Martinez, director of Climate Risk Analytics/Capital, Science & Policy Practice at Willis Towers Watson; Dr. Roger Grenier, senior vice president, Global Resilience, at Verisk’s AIR Worldwide, and Alessa Quane, executive vice president, Chief Risk Officer at AIG.

The panelists shared their perspectives on topics ranging from the value of public/private partnerships in closing insurance coverage gaps; the sometimes overlooked but nevertheless consequential challenges posed to insurers by climate change (e.g., the need to guide energy businesses through “transition risk” while they retool to meet rising market demand for renewable resources); and how insurers are succeeding in building resilience.

Suffice it to say, putting two intensely forward-thinking and forward-looking events like ITC 2019 and GIS’s International Conference into perspective is a tall order. Given the dizzying array of people, places and presentations that blew past us in a single week, it was reassuring to be reminded again of a few key facts. The Insurance Information Institute represents an industry that’s going all-in on reinventing itself to serve customers and make our communities safer and more prosperous. And that many are eager to join the insurance industry in bringing this vision to life. Or to borrow the words of Jay Weintraub, co-founder of InsureTech Connect: “People really care about insurance.”

Sean Kevelighan is chief executive officer of the Insurance Information Institute, a non-profit research, education and communications organization dedicated to improving public understanding of insurance — what it does and how it works.