Targeting programs on another level

Hyper-targeted programs are emerging to improve outcomes and experience for both clients and their employees or customers. Empathetic approaches based on diagnosis or disability type, such as compassionate care programs for progressive disease and pre- and post-surgery nurse support specific to the type of injury, provide employees a higher level of care and a clearer, more direct path to recovery.

The cost of absenteeism, and loss of productivity due to presenteeism, is huge. Understanding your workforce’s trends and identifying barriers to overall employee well-being is critical to managing costs and promoting health and productivity. Data can help match the right programs and benefits to the needs of your employee population and, in the process, build a stronger culture of well-being.

As the next generation enters the workforce, targeted training built upon technology and coaching will distinguish their experience from generations prior. And when it comes to recruiting that next generation, employers are widening their lens and targeting nontraditional sources for talent.

Bringing productivity and flexibility into harmony

The prevalence of hybrid and flexible work environments has forced employers to think less about the value of hybrid work and more about ways to make hybrid work — and they’re looking at new options to support onboarding, collaboration, inclusion, return to work/stay at work and productivity. Companies are offering incentives for workers to return to the office, even part-time — with benefits like transportation allowances, paid meals at work, tangible bonuses and more.

We’ll see new developments in hiring and training processes. Technology is critical in connecting remote employees with those in the office. Some are talking about the metaverse as a future-state solution, and companies are already investing in digital real estate. New wearables will emerge to support training and safety in hands-on industries, injury recovery and proper form for ergonomics.

Employees now believe flexible work environments are a direct link to mental health and a benefits entitlement. They are looking for flexible work hours, workplace culture that respects time off and the ability to work remotely. But we also see the effects of years of nontraditional workplace connection on culture, knowledge sharing and productivity. Each organization must find the right level of harmony to keep workers satisfied in their individual careers while supporting collective growth.

We’re no longer in a one-plan-fits-all model; how do you offer meaningful benefits that fit a multitude of worker needs? Particularly on a global level, how does coverage for things like accident and health, leaves and absence management or workers’ compensation adapt to fit different regions and requirements? What makes an effective integrated disability management program?

An aging population means a significant portion of the workforce is in a caregiver role — some caring for both children and parents simultaneously. People who have access to caregiver benefits are twice as likely to feel holistically well. What resources can be provided to this population to support mental health and productivity?

Modernizing prescription drug policies

In the U.S., conversations surrounding legalization of certain drugs are becoming more frequent and tangible, both federally and at the state level. Marijuana legalization and reform continue to sweep the states, with new laws coming into place with every voting cycle. Federal movement to potentially reclassify marijuana and allow for more testing will have an impact on workplace conversations about hiring, firing and prescribing practices, as well as testing, safety, treatments, coverage and compensability.

As the stresses of the workplace continue to weigh heavily on many, the conversation has turned to the legitimacy of legalizing additional psychedelics for treatment, specifically for stress-triggered conditions like PTSD, anxiety, depression and others. Medical trials for select Schedule I and II drugs may increase as we attempt to learn more about their potential benefits, issues, effectiveness and safety.

As supply chains continue to experience setbacks, the pharmaceutical sector isn’t immune. We’ve seen shortages of select drugs like Amoxicillin and Adderall; costs of others have skyrocketed, leading to proposals for drug pricing legislation and transparency, as well as regulation of physician dispensing and prescriptions via telemedicine. Will the U.S. Inflation Reduction Act make a difference? Developments in the space will have a direct impact on pharmacy benefits management and workers’ compensation.

Getting back to basics for accommodations

It’s time to get back to basics for accommodations — including appropriate training for and use of the interactive dialogue when managers are supporting an injured or disabled employee. Don’t overlook options that can be easily implemented in your workplace to help colleagues perform more optimally. Many accommodations are low- to no-cost or require an investment of time vs. money — flexibility, periodic rest breaks, additional training, job coaching, written instructions and more — and can have a significant impact on recovery, productivity, inclusion and employee engagement.

Employers should also find ways to streamline their policies for paid family and medical leave (PFML) as the landscape becomes more complex. In the U.S., Oregon and Colorado implement PFML plans in 2023; by 2026, seven additional states and territories will adopt PFML plans, so prepare now for rapid expansion — as well as the jurisdictional challenges of managing differences from state to state. Are private plans the answer for more simplified leave administration, better expectations and equal options for employees across jurisdictions?

Revisit stay at work and return to work plans for opportunities as the needs of our global workforce change. Industry leaders predict our working-age population has a 50% likelihood of becoming disabled for at least a few months of their career. That means we need to think about new ways to keep employees healthy and performing their best, despite the challenges. A huge driver of this statistic: long COVID, which could prove to be the most significant percentage of disability claims and accommodation requests in the future.

Preparing for pandemic-related health challenges

We may feel like we’re done with the pandemic, but it’s not done with us. We’re keeping a close eye on the trends tied to long COVID and how they will impact the future in workers’ comp, leave, disability and productivity. Disability claims will continue to rise — in the next few years, the need for related accommodation requests will surpass those for musculoskeletal and mental health-related conditions. With such significant and daunting percentages being discussed, new investment in related treatments, testing and trials will continue.

The workforce challenges presented by long COVID are a reality for many and an emerging concern for many more. How do we rethink options for supporting employees and helping them live and perform at their best — whether that includes presenteeism and productivity strategies, options for accommodations and support, or mental health tools and benefits?

Product and workplace safety may also face new challenges with the rise of long COVID cases. A long-hauler experiencing brain fog might have difficulty remembering facts, completing tasks, or responding to questions. How do we accommodate for this type of condition to prioritize both health and safety? Depending on the person’s role, the impairment can affect the safety or quality of goods or services produced — or even the safety and well-being of the individual, their colleagues or customers.

Incentivizing healthy workplace culture

Employees today presume employers have some responsibility in contributing toward their health. Plus, declining health can impact an employee’s productivity and ingenuity in the workplace, often leading to declining results for individuals, teams or the organization. In response, employers are prioritizing and incentivizing physical, mental and financial wellness programs as a recruitment and retention strategy and a preventative measure as they find new ways to support their colleagues and encourage healthy behaviors.

Stress in and outside the workplace takes its toll on mental and physical well-being. As burnout remains a concern, further initiatives will need to be implemented to protect employees. People are facing additional hardships, such as a looming recession, inflation and general mental health concerns. Employer-provided support programs will be exceedingly important to help employees navigate new stresses.

Many workplaces have seen an increase in violence in recent years, with the strain of pandemic struggles and restrictions manifesting in dangerous behaviors by colleagues, customers, patients and the like. Not only is this contributing to added behavioral health challenges and conditions like PTSD, but it is discouraging some from staying on the job. Employers need to prioritize workplace safety and violence prevention and provide a safety net for those struggling with the fallout of incidents.

Engineering new solutions for complex losses

From the specific to the complex to the obscure, the challenges in the property arena are endless and generalists are not always the answer. We’re in an era of specialty engineering, expertise, investigations and tools to help property loss adjusters address the detail level of increasingly complex and high-value claims.

Programs are emerging that target specific, more granular loss types and enable us to pinpoint solutions — low-dollar flood repair, exact-match flooring replacement, specialty machinery restoration, cyber forensic analysis, picture AI for 3D home modeling and more.

The property claims process is in a time of re-engineering. Technology is modernizing the way we hire and train adjusters, inspectors and contractors; how we work collaboratively and remotely across communities and countries; how we communicate and adjudicate the claims process; how we manage data, billing and reporting; how we triage, target and add value from first notice to resolution of losses; how we pinpoint the path to improved outcomes.

Managing climate’s impact on claims

Statistics and patterns show us that extreme weather events have become more frequent and certain due to climate change. That trend is only expected to continue and will have a direct impact on claims volume for businesses and individuals, especially those located in vulnerable areas on the map. Will this change regional demographics as the population migrates to areas of lower risk? As coverage becomes more challenging and more expensive in areas prone to catastrophes, we expect to see more of a shift to alternative risk methods. Data will support an increase in parametric insurance as we look to find options for increasingly volatile risks.

We often talk about the impact to structures in the wake of disasters, but auto losses and transportation risks also are directly increasing along with extreme weather trends. Storms create disruption and delays for transit, dangerous conditions for drivers, and backlogs for repair and replacement. Preparedness is important — safety plans, networks and backups can make the difference in protecting lives and business continuity.

Sustainability is a greater value to businesses than ever in terms of practicality and financial impact. Restoration and repair continue to grow in popularity as alternatives to replacement. Increased scrutiny by regulators, boards, shareholders and the public means organizations must pay more attention to the sustainable practices of their extended network of suppliers. What are the risks of going green in the building space? Will we see additional safety risks or claims based on a growing market for solar and wind energy? Will new building materials pose new risks to health and safety?

Standing ready for the state of emergency

Is the state of emergency becoming a new weapon in the risk management arsenal? Having come through years of pandemic impact, we’re seeing outbreaks like monkeypox and even RSV prompt some public entities to declare states of emergency more frequently tied to health issues, in addition to usual practices of declaring emergencies during traditional CAT events. Are these types of declarations losing impact on response as they become a part of our normal state? Will they influence coverage and compensability?

In disaster-prone regions, the state of coverage itself is reaching emergency status. Capacity is an issue, carriers are leaving tough markets due to uninsurable conditions, and prohibitive costs are causing people to go uninsured or underinsured. How do we manage these significant risks? Florida, for example, has already passed legislation to try to stabilize the market and control litigation; we’ll closely watch for its impact in the state as well as other regions with similar risks.

Unpredictability must be factored into conversations about resilience, supply chains, the labor market and more. We’re still seeing shutdowns in Asia, although usually facility by facility and not whole cities. Business interruption cases are still in courts globally. Ports are turning away business and levying fines due to backlogs in work and an overabundance of shipping containers. Catastrophes continue to remind us of the limitations of existing staffing and the need for quick access to surge resources. Organizations must be ready to adapt at a moment’s notice, which is costly in terms of time and resources.

Transforming energy approaches

With changes in the energy sector, we expect new opportunities and risks, with a significant impact in the property and auto spaces. As we witness rising fuel costs around the world, a growing regulatory push and broader initiatives toward sustainable energy sources, specialist consultants in the field will emerge as more valuable resources.

Those in the U.S. will see the wins and woes of changes to transportation. With the recent influx of federal funding for projects tied to renewable resources, we can expect electric vehicles (EVs) and access to chargers to remain top of mind. Already-fragile energy grids may not yet be prepared for higher rates of electric consumption, putting property owners at risk for blackouts. Liability and property incidents may arise from inconsistent regulation of and standards for chargers. As more EVs appear on the roads, can the auto repair space keep up? How will chip shortages impact the repair cycle and the duration of claims?

Across Europe, the energy crisis has been heightened through supply chain disruption, geopolitical struggles and the impact of climate change. Drought and heat waves are changing the landscape of power generation and consumption. Net-zero commitments are at risk, putting a strain on ESG targets and regulatory compliance.

What changes will we see in corporate energy approaches in response to incentives and regulations? Perhaps more and more corporate fleets will adopt the use of EVs for select portions of their chain. Commercial property may increasingly be converted to use renewable energy. Risk profiles and challenges will change along with the design, build and operation of facilities. Public entities will look for ways to add resilience in their supply and distribution channels.

Shifting the supply chain focus

The supply chain has not fully recovered from years of factory closures, border restrictions and overcrowded ports. Inventory levels are still a concern. With a looming global recession, the 2023 supply chain will be indicative of economic recovery, as it tracks consumer behavior and supply and demand for goods.

Logistics management is equally reliant on people and supplies, and a multi-year shortage of skilled labor is a compounding concern across industries, including construction, manufacturing and healthcare. Potential deficits are alarming as we see younger professionals shifting to other fields or remaining out of the workforce, older generations nearing retirement, and lower rates of immigration in many parts of the world. A shift in operational strategy and tactical thinking will be required, including adding new approaches to attract talent, reskilling the available talent pool, as well as creating gig opportunities and building independent resource networks in hard-hit fields.

Supply chain factors can directly impact claims; labor and material shortages may mean delays in building and auto repairs. Diversification of suppliers can help reduce turnaround times. Temporary housing solutions may provide relief for those affected by delays.

Investigating new angles to fight fraud

While most claims are legitimate and most claimants are trustworthy, economic pressures can lead to a rise in fraudulent claims. As we see inflation and recession around the world, organizations should be vigilant against bad actors without sacrificing customer service and experience.

Technology is playing a greater role in the fraud space, with new tools emerging to judge sentiment, track known fraudsters across organizations, and flag areas of suspicion — enabling valid claims to be processed faster and resources to be better targeted where they can make an impact for improved financial stewardship.

Investigations become more worthy of time and resources as fraud rates tick higher. But there’s greater importance placed on aligning the right resources at the right time and deploying experts who can maximize value.

Staying ahead of the pace of change

Operating in a globalized and connected environment, it is imperative for businesses to be acutely aware of the changes occurring around them — new legislation, advancements in technology, shifts in consumer preferences and behaviors and the growing complexities brought about by the transformation of supply chains. Failing to keep up can create gaps in safety, compliance and coverage, and take a toll on brand reputation.

With consumers looking for instant gratification, there is greater emphasis on technology to expedite resolution and enhance the user experience. We’ll continue to seek ways to provide real-time updates on milestones in the claims process and to resolve less-complex matters through auto adjudication.

A fluctuating, high-turnover workforce may create additional risks for workplace safety, product quality and customer service. Training is required to ensure employees remain safe and brand standards are being met and conveyed in every interaction.

Prioritizing prevention

In times of increased cost, a shift toward prevention becomes more valuable. For areas including product and workplace safety, recall preparation or property site evaluation, proactive assessments can make a difference between smooth resolution and costly remediation — or significant reputational impact.

Resilience matters. Build your response playbook, practice it and prepare. Strategies to consider include active recall planning and mock recall scenarios, CAT response plans, loss control/risk control consulting, engineering site assessments or stress testing to reveal vulnerable areas and improve speed of response.

As both cost and availability of insurance coverage fluctuate, risk managers should feel empowered to lead their organizational efforts on risk avoidance and risk mitigation opportunities. Be open to exploring program options. As market conditions change, analyze the potential ROI of safety and ergonomics, facility and vehicle cameras, telematics and weather protections.

Moving ESG from obligation to transformation

People are placing greater value on businesses that prioritize diversity and sustainability. The next generation is willing to pay more for partners that do the right thing. These individuals are also driven to find purpose in work. Environmental, social and governance matters will become more of a factor in reputation, influence and engagement with shareholders, customers, employees, communities and recruits.

Ongoing change in the governance space makes ESG a compliance necessity. The regulatory arena has taken aim at those missing ESG targets, as well as those making false ESG commitments. Globally, many countries levy fines and restrictions on businesses that fail to meet ESG standards; in the U.S., the SEC has rolled out requirements for publicly traded companies to disclose progress with ESG strategies. In multiple parts of the world, we’ve seen class action suits brought against companies whose product standards don’t align with their broad ESG statements.

ESG is also creating opportunities for organizations to transform their operations and practices. Businesses are adopting more environmentally friendly production methods and materials, renewing efforts to reuse and recycle, and finding additional ways to reduce their carbon footprint. As processes transform, quality testing is important, as is maintaining transparency and communication with suppliers and partners.

Gaining confidence in compliance

In the wake of a record-setting year for recalls and increased regulatory efforts and enforcement across the globe, we expect another year of scrutiny in product safety and compliance. Businesses should constantly review and update their product recall, crisis and communications plans to ensure they can withstand the stress of a recall or other product safety issue.

There is a heightened awareness of the need for legislation to keep up with rapidly developing technology, with big changes on the horizon around product liability, cybersecurity, AI and the regulation of online platforms.

We watch for federal involvement in the U.S. workers’ compensation environment, particularly with an eye on the Medicare physician fee schedule rule, proposed pharmacy benefit manager pricing and reimbursement transparency initiatives, and regulatory influence in telemedicine. With new legislators in state capitals across the country, we watch to see any shifts in the development and passage of future state-level legislation on workers’ compensation and auto physical damage.

Safeguarding data, privacy and reputation

Cybersecurity is a growing concern for all organizations; however, the need for protection and preparedness has become even more critical following recent threats. Past attacks have shown how devastating and widespread a breach can be to operations and reputation. Logistics companies, auto and transportation providers, and public entities must remain especially vigilant as they provide a foundation for work and life. Resilience measures, including plans for response, recovery, investigation and claims management, should not only be a priority, but should be practiced and tested.

Compliance with a complex patchwork of global privacy and data protection regulations is a challenge that all organizations continue to face. Changes to third-party cookie use and data localization regulations will require new practices to maintain appropriate compartmentalization and compliance. As “zero-party” data, voluntarily provided by consumers regarding their preferences, interests and personal information, becomes more relevant in business practices, it too must be protected.

Newer technologies, including the metaverse and blockchain, can expose consumer data to threats. To mitigate the risk of a breach, companies must implement multipronged automation systems through artificial intelligence to better detect and stop threats before damage can be done, ultimately safeguarding data from bad actors.

Persevering through economic uncertainty

As we anticipate the impacts of inflation and other factors related to loss trends, we’re tracking the ways inflation is changing employer spend and strategies for managing claims performance. It’s important to assess vendor partners, networks and plans, and understand how they can help you weather fluctuations in availability and costs of supplies that are critical to the recovery and restoration process.

In 2023, key economic factors including inflation, interest rates and a potential recession will remain top of mind. Not only does this impact the cost of living, but also could impact employment and financial security. Advisors, governments and businesses alike are watching and preparing for any shift in public sentiment and potential for civil unrest as socioeconomic pressures increase among populations worldwide.

In the case of a tightening labor market, we expect continued growth in automation and outsourcing. Higher workforce turnover can also influence a need for knowledge transfer programs, as well as more training for workers and managers. Could any gaps in continuity lead to issues for brand protection, workplace strain and worker stress? Executives, managers and HR departments need to prepare for questions or concerns about workforce stability or reductions; properly communicating any shifts with employees is critical to reducing anxiety and retaining top talent.

Adapting to geopolitical instability

The Russian invasion of Ukraine has led to a focus on economic sanctions, especially among global corporations. To maintain compliance and reputational integrity, organizations must examine if and how they do business in regions affected by sanctions — and even whether funds with which they’re associated may pass through banks that could become or are already sanctioned.

Our dependence on global trade to source materials and goods could be at risk. The Russia-Ukraine conflict has affected the supply chain, restricted economic growth, and heightened energy and food insecurity; additional business continuity challenges could come as geopolitical threats evolve over the course of 2023. To minimize delays and meet consumer demand, more emphasis may be put on sourcing local goods and services, especially if changes in the trade relationships between countries drastically transform the landscape. However, no region is fully self-sufficient. Flexibility is the key; organizations that blend the best of global and local resources will benefit from economies of scale when possible while minimizing their dependency risks.

Geopolitical pressures are influencing potential recession. Are you prepared for the trickle-down effect? Increases in claims and their duration may be felt in several areas, including the workers’ compensation and liability spaces. As the risks continue to evolve in our increasingly global and connected economy, maintain an awareness of the situations that can impact your exposures and diversify.

Refining experience and expectations

Our industry is reimagining what quality looks like. What signifies good performance? We’re shifting away from measures and standards that used to drive our responses, beyond the days when making three-point contact with the employer, injured worker and provider within 24 hours of a claim meant the job was well done. But checking the boxes doesn’t signify a quality experience. Data now drives our actions as it shows what’s most effective and what is making an impact on outcomes vs. simply running through a checklist.

Claims programs are an extension of your brand and while employees and customers have different expectations in different states, regions, or countries, how can you create a consistent and meaningful experience for them no matter their location? Maybe it’s through technology that allows people to establish their communications preferences and builds transparency into processes and timelines. Maybe through partnerships that help maintain adequate levels of staffing and coverage. Maybe through universal approaches to employee benefits and programs including workforce absence management, global accident and health, workers’ compensation and wellness initiatives.

For most claims, people don’t know what to expect. They don’t understand the rules that govern claims determinations, and they get lost wading through dozens of pages in a claims packet. By more clearly explaining benefits and maintaining transparency in timelines, rules and approval processes, we can change the course of a claim and the attitude of the individual. Technology, again, is a factor in simplifying processes and setting expectations — alerting for milestones and prompting adjusters or advocates to ask questions proactively at select steps in a claim based on data.

Finding new value in data and optimization

There is great promise for no-touch programs and automation across the claims spectrum. Certain segments, like the low severity, high frequency claims space, are finding immediate benefit in better outcomes and a more fulfilling customer experience by balancing new technology and automation with human intervention.

Technology will continue to transform the claims process and specific tools will emerge that improve performance and outcomes at points in the cycle. However, the broader goal is full end-to-end integration, bringing the right tools, data and people together to support claims holistically for clients and consumers.

We can expect artificial intelligence (AI) to evolve into new territories such as language processing and refined automation capabilities over the next few years. We will also continue to see investment of time, resources and research in the augmented reality/virtual reality (AR/VR) landscape and watch to see how it may impact day-to-day life and business operations. There is potential value for new AR/VR-supported innovations in training, productivity, health, recovery and engagement.

Comparison tactics help us understand our organizations better and develop creative solutions. The data used in benchmarking has evolved and become more sophisticated, giving organizations added direction and identifying new ways to proactively optimize their performance.

Stabilizing litigation in a volatile world

Given the substantial impact and increasing frequency of litigated claims, organizations and their insurers are well served to allocate additional attention and resources toward avoidance and mitigation. It’s important to incorporate diverse tactics into your broader litigation management strategy. Consider ways to optimize your legal panel’s performance; to use settlements, subrogation and recoveries effectively; to engage end-to-end solutions from injury or damage through to litigation and recovery; to consider tools like e-discovery to simplify processes.

It is now broadly accepted that social inflation and its effects are real and driving increasing awards. Actuarial studies suggest that recent loss projections may be understated due to the phenomenon of social inflation being inconsistent with historical patterns. How can we reduce the impact of social inflation? How will reserving methodologies change in response?

While indicators suggest that the size of verdicts and even nuclear verdicts may continue to increase for the foreseeable future, collaboration is important in developing effective strategies. Litigation avoidance, in particular, can be impacted by emphasizing care in the claims process, training staff in empathy, ensuring you’re paired with the most qualified attorneys, experts and expert witnesses, and engaging in healthy employee and community relations to raise public sentiment.

Utilizing the power of relationships

As organizations streamline their operating models to better respond to the rapidly fluctuating geopolitical and socioeconomic environment, business process outsourcing (BPO) will become increasingly popular. Equally as relevant to insurers as it is to corporate entities is the outsourcing of business activities — from back-office administration to technical claims handling. This service frees up time and energy to focus on what the individual organization does best.

Maintaining, building and expanding relationships with employees is potentially the best way to retain and attract top talent amid workplace turmoil. Companies continue to seek and implement new policies and initiatives to help boost employee morale and foster a positive culture. Keeping colleagues engaged allows for a more supportive environment where they feel valued and protected.

The risk landscape is more global, complex, interconnected and volatile than ever before. Collaboration will allow organizations to remain nimble and deliver results. Connecting with global partners gives the advantages of a broader viewpoint, helping you see possibilities, address gaps in knowledge and resources, and adapt quickly as risks evolve.