This article was produced in partnership with AmTrust Financial Services, Inc.
Desmond Devoy, of Insurance Business America, sat down with Matthew Zender, senior vice president of workers’ compensation strategy, at AmTrust Financial Services, Inc., about the continuing impact of the pandemic, layoffs, and The Great Resignation, on workers’ compensation.
The nature of work for many has changed greatly since 2020 – and with it has come challenges in the workers’ compensation sector.
Matthew Zender, senior vice president of workers’ compensation strategy at AmTrust Financial Services, Inc., has had a front row seat on how the world of work has changed, and how the sector has, and will have to adapt to this new working world.
“There are massive dislocations in terms of the job force right now,” said Zender. “You have huge influxes of new employees. And the data tells us that new employees are more likely to be injured (on the job). They’re less familiar with what to do and how to do it.”
Of course, this varies from industry to industry. The restaurant trade tends to have higher employee turnover, so risk mitigation is “embedded into our understanding of it,” he said. “Whereas a new warehouse employee is going to be more likely to be injured.”
As the pandemic era was waning, there were news stories of the Great Resignation, or workers’ quiet quitting. No matter what one calls it, something was afoot – more workers were heading for the door for different jobs.
In the tech sector, for example, “you have a lot more notifications of mass layoffs. So layoffs, in and of themselves, (create) an environment where the jobs are shrinking, which tends to lead to a decrease in the frequency [of claims],” he said. The employees that are left are “more seasoned, they’re less likely to be injured.”
With the possibility of a recession this year, and the impact of interest rates on the economy, “you’re going to have one factor where you get all these new employees that came into – in some cases – brand new industries. I’m going to be curious to see how that works itself through into the data on an overall basis.”
During the early days of the pandemic there were “ergonomic concerns that we had about people who aren’t necessarily set up with a perfect workspace in their home, working around a 12-year-old’s science project,” or tripping over a toddler’s toys, while working at the kitchen table.
Those jobs were mostly clerical in nature, he said, but still “we weren’t sure exactly how it was going to play out. It did end up working to reduce frequency…in fact, it had a generally positive effect.” Among employees there was “some overall satisfaction that they had with their employers allowing them to work with them in a flexible manner.” That, in turn, has had an impact on the volume of claims – happier workers, it seems are less likely to raise issues.
But in the face of so many changes, how can the workers’ comp insurer keep on top of developments and ensure its coverage offers and premiums are fair and applicable to the individual?
One way the 30-year veteran of the field is looking at navigating this changing landscape is through data analytics.
“We do use data to help shape our clients’ experiences with us,” he said. “We have the opportunity to use data to suggest certain things that we may need to do on a claim, for example, putting the right resources in front of that client.”
He put forward the hypothetical that, say, a comorbidity for a 22-year-old yoga instructor is going to be different to that of a 46-year-old, morbidly obese trucker, who are on “two different paths, right?”
That data is used to “determine pockets of opportunity where maybe they are underrepresented in a class or segment.” It can be applied regionally as well, to see if there is a rise in certain cases in, say, Little Rock, Arkansas. With that information in hand, he can “talk to our agents about wanting to do more,” to address a particular concern in a particular region, among their 360,000 policy holders.
Overall, carriers are getting “more and more sophisticated with our use of data to guide our journey, using data to help identify areas of opportunity, using data to identify areas that may need some reparation,” he said.
While there are hard numbers at hand, they do not always tell the whole picture, however.
Despite the troubles of the pandemic, Zender called it “the most intellectually stimulating period of time, from a professional perspective,” a time to think “deeply” about the industry, because “they were actually making a difference. It’s one thing when you’re looking at an issue and it feels esoteric.” It’s another thing to look at an issue in the moment and feel: “This is real.”
“One of the things that we really had to do was (look at) how we treat our policy voice. Yes we’ve got to really think about the tools and the communication,” he said. “Most of our policyholders are small businesses, and a lot of them were wondering what the heck they were going to do about their businesses and workers’ compensation.”
It resulted in an empathetic balancing act for him and his firm’s clients: “To try and make sure that we were being sensitive to their needs, while not being completely insensitive to ours?” he said.
AmTrust Financial Services is a niche specialty property and casualty insurance company with about 6,000 employees worldwide. It is an industry-leading insurance provider focussing on small business insurance solutions with an emphasis on workers’ compensation. It insures more than 500,000 businesses across America.
