Risk Management (WEB ONLY)
Insurtech Exec: ‘Holistic’ Approach Is Key for Risk Managers as Offices Reopen
Risk managers have to ensure "that you have a happy workforce holistically" because many employees are at home and working longer hours, said Emilio Figueroa, chief insurance officer, Foresight.
- Tom Davis
- April 2022
In the age of COVID-19, the insurance industry views the whole process of opening office doors—if that's even possible—or even sitting at remote laptops for millions of workers as a new and even tricky challenge for risk managers for the foreseeable future.
Emilio Figueroa, chief insurance officer, Foresight, a workers' compensation and workplace safety insurtech, says a holistic approach that promotes mental health is the key to managing risk as the office environment changes. Following is an edited transcript of an interview with Figueroa.
Rapidly changing work environments are opening a host of new and different exposures and assessment challenges for insurance companies, risk managers, etc. Companies are reassessing leases and extending work-from-home arrangements. What does this mean for the insurance and risk management industry?
As risk managers, they have to stay on top of the curve. They need to be aware of what's trending. They need to be on top of what's happening and what's going to be happening and analyze risk management and risk mitigation strategies as society changes.
What are the new risks?
Obviously, we have pandemic concerns. We haven't gone through a pandemic in multiple decades—close to a century. For us, [the keys are] looking at how we can relate to the current concerns on a social level, on a workplace level, making sure that clients are mitigating that risk and making sure that the culture is aware of it.
Then, [it's] looking at the culture and seeing that reduction in workforce across the board for every industry is dramatic. [It's] making sure you have retention for those employees that are staying there and making sure that they're healthy; making sure that you're looking at the dynamic changes of how the culture's changing from a risk mitigation strategy; looking at shifting from a physical workplace injury to a mental workplace injury.
What does this mean for workers' comp issues? Are there drastic changes? Slight changes because of that? What sort of workers' comp issues now come up with hybrid or full in-person or remote?
If you look at the different aspects of how the culture is changing socially—before, the employer had the power. Now, the employee has the power. We've been accustomed to working from home. A lot of people want to stay working from home. A lot of people want to do a hybrid model where they can go to the office a few days a week and change that dynamic.
There's a lot of companies selling their corporate headquarters. They're changing, they're shifting to the employee and what the employee wants. There are specific industries, like the industries we work with, which are the blue-collar industries—they're on the job site. They're performing on the job site. It's making sure we have that retention for those respective employees.
The ones that are more, I would say, brick-and-mortar-style businesses, we've got to make sure that those employees are safe. We've got to make sure that they're wearing the PPE, that the conditions within the workplace are there to mitigate any concerns they may have, but to simplify that risk mitigation strategy.
For the hybrid employees that want to stay at home but also want to come in to work, you need that mental well-being of being able to socialize with your peers. While they're staying at home, [you're] making sure that they have the proper workspaces, that they have the proper equipment, that their equipment is ergonomic. [You're] making sure that they're as safe as possible while they're at home.
When they're at work, [you're] making sure that you have the retention to maintain those happy employees, that they're going to stay there. There is a labor shortage, so making sure that the ones you have—you're going to keep by making sure they're proactive in how they're changing and mitigating the risk culture [and] they're also happy. Their mental well-being is of utmost importance.
Then, the ones that are coming into the workforce—[you're] making sure that those employees understand the company culture and the company risk mitigation strategies so they can reduce the risk [and you're] making sure that you're going to retain them, as well. It's an overall holistic approach. It's not necessarily changing what's happening in the industry, but looking at it in a different lens.
Have these new challenges impacted premiums in any way? Pricing? Deductibles? Even coverage in general?
If you look at the U.S., I don't think it's changing dramatically simply because the regulatory framework is there. It's established. The rating is not changing. Deductibles are not changing. Types of underwriting methodologies are still the same, but we have to look at the workers that are actually there.
If you're looking at payroll, for example, you're looking at higher payroll by the same employee. They're getting paid more. They're working longer hours. We need to make sure that we have the right balance to make sure that the employee's happy.
Once again, and I keep on pushing this, it's that mental well-being, making sure the holistic approach to a healthy employee and a healthy individual is established. What can we do as an industry to change that? We need to shift—shift from a physical balance of well-being, which we still need to maintain, but look at a mental well-being.
As an industry, the workers' comp industry hasn't really looked at a lot of mental well-being, not only from engaging the injured employee while they're working through technology like what we have, but looking at making sure that they're happy … making sure that they're OK. We're proactively helping them and engaging them to return to work as soon as possible and to be safer.
There's a lot of things we can change in the industry. I think technology's going to ease that. It's going to ease engagement with the employee. It's going to simplify that engagement between the employee-employer relationship. It will change the safety culture, making sure that they're more risk aware.
You raised the mental health aspect. That's one thing I've heard from all walks of life in the industry, is that it's something that can't be underrated. It sounds like that's something that the industry is addressing now that things are changing again. That there's a mental health aspect to it.
Absolutely. Looking at your employees on a humanistic level: They're not only employees; they're truly your only workforce. With the lack of employees out there—if you look at the construction industry, there's a lack of 400,000 jobs in the workplace. That talent drainage is dramatic.
What can you do to simplify that? You've got to make sure that the job places safety first and foremost, obviously. Then, you've got to make sure that your employee's happy. How do you create that happy employee? How do you maintain that happy employee? These are things that we haven't looked at in a closer lens in the past that we need to start looking at more aggressively.
Reducing the footprint is one way to actually reduce exposure. But even when you're at home, there still are issues that are there. There's the mental health aspect. There are issues with eye strain. Are those actual risk exposures, would you say, from work-from-home?
Absolutely. You can look at anything as a basis for workers' comp. Then, you look at the employee happiness. You look at the employee burnout. You look at the type of work they're doing, the quality of work they're doing. You look at the mental health aspect, but you're also looking at burnout rates.
It's making sure that you have a happy workforce holistically, because they are at home and they're working longer hours when they're at home. I work out of the house myself. It was, before, working a 9 a.m.-to-6 p.m. job, 9 a.m.-to-7 p.m. job. Now, you're looking at employees who are willing to work 9 a.m. to 9 p.m. They'll throw in a couple [of] recreational hours in between to take the kids to soccer or whatever. They're still working longer hours. They're working on weekends as well. Making sure you have that right work/life balance is super important.
One of the chief complaints in the industry is that sometimes it's hard to manage risk or it's really hard to manage risk, when you have so many different rules from state to state, town to town. There's a lack of consistency.
It's tough looking at it on a national level. We're such a huge nation that you have to look at it on a state-by-state level. It'd be great if we could do it nationally, but every region is separate. Every state is very separate. Within the states we have specific regions that are very different from other regions. I live in California. If you look at Southern California versus Northern California, it's night and day. It's like two separate states.
You need to look at the holistic approach of how you're dealing with the social aspects and what the regional population wants and what they need. Then, you look at the outbreaks and seeing what is best for the community, at that point in time making sure that you're able to shift those necessary concerns to the respective community and ease those concerns.
How manageable is that? It has been somewhat manageable if you look at it on a national level for the past three years. It's been somewhat manageable. Is it sustainable? It's tough for this to maintain the way it is. We need to have an overall understanding and preventative system for social change to make sure that everyone feels the same way. We're all in this for the better outcome. [You're] making sure that people are wearing their PPE or they're getting vaccines or they're getting their booster shots. [You're] making sure that we can change that national look.