Through A Glass, Darkly...
Apr 30, 2020

When Paul wrote this memorable phrase in his letter to the Corinthians (I Cor:13,12), he expressed a feeling we all know well, how the future reveals itself slowly and in parts. The post-COVID future is even now beginning to show a few features. For example, we have a new poll of financial institutions and technology firms concerning what percentage of their employees, now working from home, are likely to return to their customary office environment once restrictions are lifted. The financial concerns see more people trooping back to their offices than the tech outfits, but the average across all 299 respondents was 72%.

Is the 28% continuing to work remotely a little or a lot relative to our overall workforce? Well, according to the Bureau of Labor Statistics*, some 8.8M of our fellow citizens worked in finance, broadly defined, and another 7.7M in "Information." We don't know exactly what proportion of each workforce is now working remotely, but a number of recent reports suggest it's at least 30%. If that's the right ballpark, we'll see a minimum of 1.4M folks continuing to work remotely once COVID is in the rear-view mirror. That's a substantial change and it means a lot of vacant office space, parking places, and less highway congestion as a long term part of the new normal. How will that change your company's risk profile? Your risk priorities?

We are also seeing more thoughtful evaluations of remote work as more folks get used to it and the novelty wears off. What's it really like? Our friends at recently carried an overview of clocking in from the kitchen table, "A Perspective on Working from Home: The Good and the Bad (But Mostly Good)". Before very long at all, the folks in the C-suite will be making some decisions about how to encourage or restrict remote work once the immediate threat is past. Your view in terms of the impact on risk generally and matters such as cyber exposures, A/L, G/L, and workers' comp should be an important part of the discussion. This is probably a good time to research the topic if you haven't already.

Fearless prediction: five years from now we'll look and talk about risk management BP and AP (before the pandemic and after) and the differences will be striking. We white-haired types will begin many conversations with, "remember how simple it used to be?"

*The BLS website - - is a must see for all stat junkies. It is both amazing and gratifying to see what our tax dollars can do. Check it out. Try the open mic on Shakespeare night.

a cartoon of an actor performing Shakespeare with the caption 'for the probability of audience uproar is always high for Shakespeare Night at the statistical society'



More About Reptile Theory - Huh?

No, no - this is not the UFO-linked conspiracy idea that reptilian aliens are taking over human bodies. It's worse, much worse. "Reptile theory" is the most recent incarnation of a trial strategy used by the plaintiff's bar that seeks to make use of the primal and inherent, often subconscious instincts and/or fears of jurors to maximize guilty verdicts and payouts in various types of liability suits. Cooper & Scully recently published an excellent overview which is well worth a read through.

You don't want to wait for a trial date to understand reptile theory and prepare your defense. At the heart of the strategy is the idea that the defendant - you and your employer, dear reader - failed to keep the plaintiff, the class of plaintiffs, and the community safe through a series of actions or inactions. The strategy relies on a very real aspect of how our brains work. The average person is more receptive to negative information, hence we have a "negativity bias." This works very well in liability cases, especially when the nature of the case - a product, a traffic accident, a healthcare ingredient - has a potential impact on the jurors and their families.

While the article referenced here focuses on medical malpractice applications of the theory, a practiced risk manager will see the potential applications across a wide variety of liability episodes. Indeed, it is probably true that the increasing use of reptile theory has a serious bearing on the growing issue of social inflation in liability verdicts. How you might build a defense against this practice will depend on your line of business, jurisdictions, and other factors, but knowing that the reptiles are out there and putting a face of thoughtful caring and transparency on your risk mediation and safety engineering activities could save a world of grief later.

a man holding a snake at a trial, asking 'your honor, my client would like a change of venom'



Quick Take 1:
Can We All Say Fiduciary?

While COVID steals the headlines, ordinary crime continues on its merry way. A relatively new ploy for the folks who'd be rejected from Dante's Inferno for giving the place a bad name is turning 401(k)s into 001(k)s. That's right. They're using classic fraud techniques to clean out retirement accounts - and the folks thus stripped of their lifetime savings are suing both the fund managers and their employers.

This type of fraud is a good example of what my Swedish grandfather told me back when TV was black and white: "all honey pots attract flies and big honey pots attracts lots of flies." A fund full of 401(k) accounts which are usually in set-it-and-forget-it mode is a huge honey pot. A recent article in the Chicago Tribune tells the story of one such episode. The victim in question sued both the fund administrator and her former employer.

The article cites just one instance and one set of particulars but it asks a larger question: do you have the appropriate policies in place - just in case? This kind of fraud can hit anywhere, any time. The fraudsters get smarter and more inventive all the time. Got honey? What are you doing about the flies?

a demon-like creature looking terrified

You did what with my 401(k)?


Quick Take 2:
About That Outpatient Surgery...

A major event like COVID-19 creates a good deal of collateral damage. Our example for this issue - outpatient surgeries. Work-related injuries are most often musculoskeletal in nature, making comp a major user of outpatient orthopedic and related procedures. Indeed, one long term trend in industrial medicine has been the movement away from inpatient into outpatient settings for procedures like joint repairs.

As Business Insider now tells us, O/P Surgery Clinics are one more of the victims in the path of the coronavirus. What does this mean for you? Well, expect claims involving serious injuries normally requiring surgical intervention to take longer than ever. Most such surgeries are non-essential by pandemic standards, so they are being routinely delayed. From Business Insider: "While it's not universal, organizations like the Centers for Medicare & Medicaid (CMS), American College of Surgeons (ACS), and Ambulatory Surgery Center Association (ASCA) have all recommended a suspension of elective procedures, and many states have enacted orders requiring it."

Note that some surgery centers are having to lay off staff or close completely for lack of procedures. No one knows if or when they can re-open, so the impact of COVID on o/p surgeries may well linger well past the "all clear" in some regions. You may want to work with your claims people to identify those claims which may get caught in this dilemma to consider possible creative alternatives and to reconsider reserves based on this unprecedented situation.


Say It Isn't So...

This terrible news for our Canadian friends from the Toronto Star:
Almost three weeks after a virus unleashed by hackers tore through its computer systems, the Beer Store is still struggling to get back to normal.


Words to Remember

Thoughts from a friend in the Netherlands (Anne-Marije Buckens of 50+ Arbeidsmarktkenner), translated from the Dutch, but very applicable in English (my translation):

The most dangerous number in business is ONE...
If a company depends on one service,
If a company depends on one idea,
If there's one dollar/euro in your bank account,
If you put all your money on one horse (system, product, market segment),
If marketing is done in one way,
If your fate is in the hands of one person,
If one person makes all the critical decisions,
If you have one candidate for a major position,
If you only hear one side of a story,
If you've trained yourself deeply in only one thing,

It's dangerous.

And danger always hides in a small corner, until time calls him out. Then suddenly he's there in all his ugliness. If Corona is good at something, it's shouting very loudly that danger should come out and show himself.

In sum, friends, the breathlessly efficient but single-threaded business lifestyle is over.


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