About Jared Wade

Jared Wade is a freelance writer and former editor of the Risk Management Monitor and senior editor of Risk Management magazine. You can find more of his writing at JaredWade.com.
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Where Questionable Insurance Claims Come From

Wanna blame someone for your high insurance premiums?

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Point to the residents of California, Florida, Texas, New York and Michigan.

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Combined, these five states generate half of the nation’s questionable insurance claims — most of which are either suspect auto policy submissions or fake injury claims.

These states account for 49 percent of all “questionable claims” as tabulated by the National Insurance Crime Bureau (NICB).

Questionable claims are those claims that NICB member insurance companies refer to NICB for closer review and investigation based upon one or more indicators of possible fraud.

NICB just released its three-year analysis of questionable claims in the United States from January 1, 2008 through December 31, 2010.

New York, Los Angeles, Houston, Tampa and Detroit are the cities generating the most QCs. Florida has three cities in the top 10 for QCs—Tampa, Miami and Orlando.

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Of course, a large reason that these states have so many fishy claims is that they are so large. Some 110 million people live in the five states mentioned.

But while they do contain about 36% of the nation’s population, that doesn’t actually explain why these locations create 49% of the questionable claims.

Weather Variations Cost Nearly $500 Billion Per Year

Major disasters rightfully receive vast coverage. When the earth shakes like it did earlier this year in Japan or the entire Midwest is ravaged by spiraling winds as it was all spring, the devastation makes it easy to comprehend the magnitude of the loss.

But it turns out that the United States also loses nearly half a trillion per year from less drastic weather events. Subtler causes, such as rain and mild cold fronts, are a not-at-all-subtle drag on the economy.

New research indicates that routine weather events such as rain and cooler-than-average days can add up to an annual economic impact of as much as $485 billion in the United States.

The study, led by the National Center for Atmospheric Research (NCAR), found that finance, manufacturing, agriculture, and every other sector of the economy is sensitive to changes in the weather. The impacts can be felt in every state.

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“It’s clear that our economy isn’t weatherproof,” says NCAR scientist Jeffrey Lazo, the lead author. “Even routine changes in the weather can add up to substantial impacts on the U.S. economy.”

A University Corporation for Atmospheric research (UCAR) release reports that this is the first study to apply quantitative economic analysis to estimate the weather sensitivity of the entire U.S. economy. The research could help policymakers determine whether it is worthwhile to invest in enhanced forecasts and other strategies that could better protect economic activity from weather impacts.

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Maybe this will provide a little perspective the next time you think your day has been ruined just because you forgot your umbrella at home and got a little damp on the way to work.

At least precipitation didn’t cost you $485 billion.

(UPDATE: You can find this and other great risk-related posts in the latest edition of The Cavalcade of Risk.)

Managing Safety and Health Risks in Antarctica

You think your crises are difficult to manage? Try doing it on the most inhospitable land mass in the world. That’s what Martin Boyle of the Australian Antarctic Division has to do every day.

Nowhere is the weather more unforgivable. Nowhere is the margin of error between life and death slimmer. Nowhere else are hypothermia and workers that “get pissed, fall down a crevasse and die” two of the biggest employee risks, as Boyle explained during his presentation on the topic at the World Conference on Disaster Management earlier this week in Toronto.

Today, as agreed to under the Antarctic Treaty, the Aussies manage 42% of this rock and ice mass.

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I say manage because, technically, Antarctica doesn’t “belong” to anyone. Various countries (chiefly, Australia, the United States, Russia, Norway, Argentina, Chile, New Zealand, France and the UK) have divvied up land claims to maintain research operations and, probably even more so, express their sovereignty by sticking a flag in the ice.

This year marks the centennial of Australian exploration of Earth’s southernmost continent. And, really, the risks there haven’t changed much since Ernest Shackleton first put out the following ad for people to accompany him on his maiden voyage to Antarctica: “Men wanted for hazardous journey. Small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful.”

The main threat on the continent is people turning up missing. Through a series of international agreements, nations have together formed five search-and-rescue divisions. Informally, they had always pitched in to assist one another when times called for it, but it wasn’t until 2008 that all five sat down to formulate some unified procedures. “After that meeting we had a lot of progress, got a lot of training systems in place and [developed] a lot of coordination,” said Boyle. “It’s that sort of relationship building between these different search and rescue groups that has really helped us out…You just can’t operate in Antarctica on your own. Everyone has to work together.”

Banding together to find stranded scientists or other personnel is particularly helpful in the winter months when temperatures plummet and no aviation is possible across the whole continent. It’s simply too cold and dark to fly so the individual bases have to make due with the provisions on site until a resupply comes next summer. And this complicates everything.

“If something happens in the winter,” said Boyle, “they have get by with what they have.”

One grave risk, then, is losing supplies to fire. “Fire is one of the most dangerous hazards in Antarctica since it’s so dry that buildings can go up in minutes,” said Boyle. “Essentially, we just have to let them go. We can’t fight a fire in Antarctica so our focus is on prevention certainly. It’s quite difficult because the water freezes in the hoses.”

When something does go awry, they also have to face the fact that medical services generally will be rather rudimentary. Usually the base only has one doctor, a generalist who will not have access to the resources she would have even at a small hospital.

To illustrate this, Boyle showed us a photo of an emergency abdominal surgery taking place. The surgeon was a general practitioner and the rest of the “medical team” consisted of a plumber, a diesel mechanic and the base chef. “The chef is pretty good with knives and cutting things up,” said Boyle. (Fortunately, the team isn’t all on their own. They can always establish radio contact with specialists in Australia who can help walk the doctor through any emergency.

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)

This reality adds to the safety consciousness the Australians try hard to maintain. Everyone on the base goes through extensive training for the elements they will encounter both pre-trip and once get to Antarctica, where people stay anywhere from six months to five years at a time. Within their normal operations, they routinely run exercises for search and rescue, fire and what to do before any commercial plane lands.

According to Boyle, this is what keeps their program ahead of some of the other more free-wheeling bases on the continent. They have had 21 deaths over the last 50 years from a range of different causes, including aviation accidents and hypothermia, but this is a relatively low number.

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“We’re not the worst program,” said Boyle. “The Russian program has deaths every year. The U.S. program has deaths every year. We haven’t had a death in about 10 years. We’re very safety conscious.”

One safety procedure mandates that any time anyone leaves an Australian base he has to give provide detailed schedule and route of where they’re going and take a radio for emergency communication. This way, it doesn’t take long before the others will know if someone is lost and they have a map to follow when conducting a search. Still, unplanned disappearances do occur.

One time, for example, a group had gathered in a hut for a couple of drinks. One man went out to the bathroom tent. The others thought he was returning to his lodge tent afterward so they didn’t think anything of it when he didn’t return. But a raging blizzard hit and the man could not find his way back.

“In the morning, they wondered where he was and found him a couple hundred meters away from the hut, severely hypothermic,” said Boyle. “They went back to the station but unfortunately he died on the way.”

As any good emergency response team would, that Australian Antarctic Division learned from tragedy. And now they have gone a long time without any deaths, something Boyle credits to the organization continually striving to make sure everyone leaves the continent just as healthy as they were when they arrived.

“After that [death], we put a lot of procedures in place … pretty much tightened up our act,” said Boyle. “We haven’t had an incident like that since then. It’s all these horror stories that we tell to expeditioners that increases our safety.”

How Greg Hall Helped Rescue the Chilean Miners

Chile's President Sebastián Piñera holds up the note that let the rescuers know that all 33 of the trapped miners were still alive. (Photo: Gobierno de Chile)

On August 5, 2010, a minor earthquake caused a mine to collapse in Copiapó, Chile, trapping 33 men underground. No one above knew if they were alive or even where they were. All they had to go on was that the men — or at least their corpses — were stuck somewhere between 500 and 800 meters below the earth.

There was really only one piece of information on which everyone agreed: any rescue effort was a race against time. No matter where the miners were when the shaft caved in, the survivors wouldn’t have enough water or food to last long. And since most local drill teams only had equipment capable of excavating down to 400 meters, there was an all-hands-on-deck call. Being a major player in the local industry for more than two decades, Greg Hall’s company, Drillers Supply International, was specifically tasked to lead the rescue.

The biggest reason to maintain hope was that officials knew of an area called “The Refuge” within the mine shaft network where trapped workers could go during an emergency. Hall estimated that the miners, had they found the sanctuary, would be able to survive for three days off the provisions located there.

But after five days of drilling passed with no progress, and then ten days passed with no progress, everyone feared the worst. “By day 15, we were convinced, or pretty sure, that we were now drilling a recovery operation and not a rescue operation,” said Hall in a presentation recounting the rescue at the World Innovation Forum in New York in June.

Still, they persevered, thinking that they would at least eventually find the bodies and allow the miners’ “families be at peace.”

Then, on day 17, the drill reached an area free of rock. And as the drill moved into that void, the rescue team above began to hear beating on the pipe. This confirmed that, despite the odds, there was a survivor. “We didn’t know how many were alive,” said Hall. “We didn’t know what shape they were in. But we knew, miraculously, at least one person was alive.”

They spent the next eight hours pulling up the drill pipe before discovering a note from below. It confirmed that all 33 men were alive and, relatively, well, awaiting rescue. “The supervisor immediately put them on that three days of rations [in the refuge after they were trapped] and stretched it and stretched it and stretched it,” said Hall. “However, by day 15 they were out of food and they were drinking water out of one of the [excavation] machines down there.”

By now, the world knows the rest of the story.

After 69 days below ground, all the men were brought to the surface and home to safety one by one in a capsule that seemed more befitting space or deep sea exploration than a drilling operation.

There were three tremendous challenges in terms of drilling Hall and the others in the team had to overcome to make this happen. The first was depth. The men were stuck more than two thousand feet below. The second was the density of the rock in the area. Geologically, the type of earth complicated everything, making some equipment useless. And the third was the large width of the hole that was needed to extract men of various belt sizes and shoulder circumferences to the surface.

This was the most difficult proposition of all.

They needed a hole at least 24 inches in diameter — something originally thought to be impossible, especially when combined with the depth and geology. But through some innovative thinking, it wasn’t. And the ultimate success in overcoming all these three hurdles was in large part due to the plan devised by Greg Hall.

“Since [the rescue], talking to experts, they still say the job really couldn’t have been done,” said Hall. “It was a very, very high-risk job.” In fact, had lives not been in the balance, he never would have even attempted such drastic measures. “If it was a job for profit, I would have walked away immediately because the risks were too high,” said Hall, who is an ordained Deacon in the Catholic church. “But it’s different when you’re drilling for people and not for profit.”

Once they realized the men were all still alive, the original plan was to — hopefully — bring the men to the surface in five or six months. “I began to think how I would react if that was my son or daughter down there,” said Hall. “Would I just sit there and think ‘I wish I could get them out sooner but oh well’ or would I do whatever I could?”

With this in mind, he started thinking up with “Plan B.” He considered all the machinery on site. He sought critical drilling equipment from a man he had never met named Brandon Fisher in Pennsylvania. And he even helped arrange for a team from the firm Layne Christensen that had been drilling water wells in Afghanistan at the time to fly to Chile.

Once those long-shot logistics started to take shape, Hall believed they could cut the timeline for rescue by more than two-thirds, thereby increasing the odds that more of the miners could be brought up without life-althering health effects. “Nobody thought we were going to be successful…And I’m telling them we can do it in six weeks,” said Hall.

Given the risk, Hall was never sure it would work. Even after the mission proved successful, he still isn’t ready to take much credit. Stealing a phrase from one of the men he worked with who had devised “Plan A,” Hall now routinely says that “God drilled the hole. I just had a good seat.”

In a way, however, all the challenges — the stops and starts, the drill issues, the brutal geology — allowed the team to focus on the moment rather than becoming overwhelmed by the mission of saving 33 mens’ lives. “I just decided to forget everything except the next meter — just drill the next meter and the next meter and the next meter,” said Hall. “That way, when all these other things were going on, we were so concentrated on how to drill that next meter that we were able to focus and do our job. If we had let our emotions get involved, we might have made some catastrophic mistake.”

But as the billion people who watched the rescue know (according to a Chilean government estimate), no such mistakes were made and the incident now serves as one of the best examples of crisis management the world has ever seen. And given his new-found expertise with the risks and realities of rescuing people stuck beneath ground, he will — begrudgingly — answer the call again if the need does arise. In fact, when 14 miners were trapped after an explosion in Mexico in May, they contacted Hall. He was ready to mobilize his company to aid officials there, but unfortunately, those men all died before a rescue operation could even begin.

“As I told my wife before, it was a real blessing and an honor to be involved in this — and I pray it never happens again,” joked Hall. “We will do it [again]. But it’s not something I want to make a career out of.”