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Denver RIMS 2014 Educational Session. Travel Risk Solutions for a Dangerous World. Joe Puzzo, SVP AIG Accident & Health Michael Harrington, Risk Manager, Jabil Circuits. • Joe Puzzo, SVP Business Development, AIG Accident & Health - 40 year Industry Veteran/24 with AIG
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Denver RIMS 2014 Educational Session • Travel Risk Solutions for a Dangerous World Joe Puzzo, SVP AIG Accident & Health Michael Harrington, Risk Manager, Jabil Circuits
• Joe Puzzo, SVP Business Development, AIG Accident & Health • - 40 year Industry Veteran/24 with AIG • - Focus on Travel protection for Employer & Participant Groups • - Fairfield University (BA History), American College (CLU & ChFC ). • • Michael Harrington, Senior Director Risk Management and Attorney, Jabil Circuits • - Prior Roles; Risk Manager for Textron and EMC • - Retired Major from 10th Special Forces Group (Airborne) • - Norwich University (BA History), Harvard (MA Government), Boston (JD Law)
What to Expect • Understand potential exposure. • What are the key considerations? • Risk Mitigation Planning: a real time example.
Why Worry? • Travel increases vulnerabilities in a risky world • Political, environmental, cultural, technical unknowns • Crime and corruption • Health and safety laws • Duty of Care – issues facing the Risk Manager
Why Plan? • Obtaining medical treatment and hospital care abroad can be expensive, and medical evacuation to the United States can cost more than $50,000.1 • Workers who travel more than 20 nights a month were 2.61 times more likely to report they were in poor or fair health than those on the road one to six days a month.2 • Seventy-nine adverse incidents of violence involving U.S. citizens and interests abroad occurred in 2011; seventy-eight are believed to have resulted from intentional targeting of Americans.3 • Only 86 percent of 2011 U.S. domestic flights departed on time; nearly two in 100 were canceled.4
The Reality of Today’s Travel Environment • One in eight U.S. adults (12%) either had their travel impacted, or considered changing their travel plans, due to natural disasters or world events since summer 2010; less than 30% of impacted travelers had travel insurance.1 • In 2012, 98 incidents of political violence that occurred abroad involved U.S. citizens and interests; 91 are believed to have resulted from intentional targeting of Americans.2 • A 2012 survey also revealed that 18 - 34 year olds were most likely to have their travel plans impacted by natural or other world events, followed by college graduates (17%) and parents of children under 18 years of age (16%). 1 • Obtaining medical treatment and hospital care abroad can be expensive, and a medical evacuation to the United States can easily exceed $10,000 or more depending on the patient’s condition and location.3 • The average cost of a nurse escort from a European location is $24,000.4 • Passengers filed approx 1.78 million mishandled baggage reports with the largest U.S. air carriers in 2012.5 • On-time flight performance has decreased; only 80% of U.S. domestic flights departed on time over the last 2 years, a 6% decrease since 2011.6
Duty of Care – What and Why? • A requirement that a corporation act toward employees and the public with watchfulness, attention, caution and prudence that a reasonable person in the circumstances would. • If a corporation’s actions do not meet this standard of care, then the acts could be considered negligent, and any damages resulting may be claimed for negligence. • Employers have a duty to protect their employees while traveling and an obligation for the health, safety and security of their employees.
Impact of Legislation • Employers’ duty and obligation for traveling employees • Defining your “Duty of Care” • Consequences if you don’t fulfill your obligation 86% of corporate travelers believe their firm has a legal obligation to support them abroad Over 50% would consider taking legal action in the event of an emergency being mishandled
The Solution is Best PracticeFlexible and Realistic • Understand potential liabilities and risks • Ensure 24/7 assistance services • Establish procedures for incident handling • Mandate training • Monitor world events • Establish communication channels • Utilize technology to locate employees 38% of travelers said they never do any research on the country they visit 78% said they never carry an emergency phone number
Expect the unexpectedMedical assistance, Repatriation, Security
Global Assistance Services • Medical • Security • Pre-Trip Planning • Physicians/Dental Referrals • Medical Payment Assistance • Repatriation of Mortal Remains
Pre-Trip Planning • Physicians Consultation • Immunizations • Prescription Medications • Contact Numbers • Research the Destination
Gather Information Information is critical to assessment and success. • Name and local contact information • Synopsis of current situation • Medical and/or police reports • Travel information (dates, location) • Medical contacts (local & home) • Date of birth, passport & Visa • Travel companion(s) and their demographics • Language needs (client, family, local medical provider)
Determine the Need Engage Assistance company for best resolution Medical team gives a professional assessment: • Review case and medical report • Speak with local, treating physician • Determine adequacy of medical facility, evacuation methods and travel recommendations • Language Skills • Closest appropriate medical facility versus home
Plan the Logistics TIMING METHOD Commercial Stretcher Ambulance • Acuity • Location • Time of Day • Security
Monitor & Communicate • Identify home physician/hospital • Secure hospital admission • Review insurance information • Update family/employer/medical providers • Contingency plans • Close loop at final destination
Global View • Travel Risk • Crime, Political Unrest, Terrorism, Natural Disasters, Culture • 41 countries with Travel Alerts and Warnings* • Hot Topics: Syria, Brazil, Egypt • Terrorist Attacks/Civil Unrest • Athens • Columbia • Denmark • Dubai • Ireland • Namibia • Ottawa • Pakistan • Russia • Spain • Turkey • Nigeria • Terrorist Attacks/Civil Unrest • Athens • Columbia • Denmark • Dubai • Ireland • Namibia • Ottawa • Pakistan • Russia • Spain • Turkey • Nigeria
How Do You Manage Risk? • Anticipate/analyze/report • Create a global system of crisis response & management • Train and prepare your employees • Maintain an effective network of global response capabilities • Setup your firm’s ability to • Assess global risk and ability to respond • Communicate globally • Locate, assist, and recover personnel
Critical Elements for Preparation “Planning is bringing the future into the present so you can do something about it now.” – Alan Lakein • Increased awareness • Destination briefs • Intelligence reports • Travel updates • Single point-of-contact for emergencies • Redundant communications • Crisis management/response structure • Travel tracking mechanism
Threat Assessment • Case Study: EGYPT • Overnight transformation • Vacation destination, business hub • Civil unrest • Arson attacks • Security forces • Breakdown in law and order • Border and ports of entry all closed • Europeans attacked and arrested • Socio-economic awareness • Impact of Political, Ethnic, Racial, Religious, or Tribal Relationships • Health • Law Enforcement Capabilities • Criminal Activity • Potential for K&R or Terrorist Attacks • Identify Location “Hot Spots” • Weather
Vulnerabilities EXAMPLES United States: Boston Marathon Bombing Algeria: Terror attack at the Tigantourine Gas Facility Colombia: Employee robbed at gunpoint • Arriving at new locations • Airports, Railway Stations, Hotels • Transportation • Unrest (riots or large crowds) • Criminal activity • Assistance expectations (Law Enforcement/Medical/Gov’t) • Food/beverage consumption • Communication limitations
Security Summary Recognize Potential Dangers • Maintain/instill high level of Personal Awareness • Know before you go (research cultures/customs, etc) • Vary routines and avoid certain locations • Present a hard target • Keep a low profile but project confidence • Understand communication abilities/limitations • Know your crisis management plan • Practice/update policies and emergency plans frequently
A Risk Management Perspective Michael E. Harrington Global Senior Director of Risk Management Jabil Circuit
Jabil Circuit Has a Global Footprint • Global Manufacturing Provider • 23 Million Manufacturing Sq Ft. • 60 Sites on Four Continents • 151,000 Dedicated Employees • 153,804 Travel Days • 15,788 Individual Employee Trips Global Electronics Solutions For a Changing World
About 150,000 global employees Jabil’s Challenge • Dangerous work – high potential for injury • Metal Grinding • Hot Plastic Extrusion • Melted Metal Applications • Remote work locations • Traditionally dangerous countries • Security issues • Weather extremes • Poor access to medical care • Poor local infrastructure • Expats, Local Nationals, 3rd Country Nationals & Contractors • 40 countries of operations • Over 153,000 Travel Days between more than 200 Countries
The Risk Management Perspective Setting the Scene – Think Global and Act Local • Compliance/Legal, Tax, and Regulatory Key Questions: • How do you know your program is compliant from a Tax and Regulatory standpoint? • How do you fulfill admitted insurance needs globally? • How do you effect claims payments outside of the US in the local country, in the local currency? • How do you deal with Transfer Pricing – Kvaerner Case and other issues • Local Expertise: Brokers and Insurers • Ease of Doing Business for Operational Business Unit • Business wants to focus on core activities • Business does not want the extra duty of insurance placement or compliance
The Risk Management Perspective • Structural Considerations • Where is the company located, and where does it conduct business? • Admitted Jurisdictions – India, Brazil, etc • Non-Admitted Jurisdictions (keep an eye on taxes) – Canada, UK, Singapore, etc • Hybrid Jurisdictions – Germany, Italy, etc (for professional lines) • What insurance is required locally? • What personal liability risks exists? (BTA, Side A D&O) Duty of Care for all Employees
Starting Point – Travel Policy Clearly outline parameters • Forbidden countries (extreme risk) • Restricted countries (very high risk) • Prior approval from Executive Committee • Only with approved security/transportation arrangements • Approved modes of travel • Restriction of commercial airlines in some African nations • Charters (prior approval required) • Aggregation of employees on planes • Max total per conveyance • Max number of Board/Executive Committee members • Clear approval process for exceptions to policy • Head of business • Executive Committee • Institute Corporate Travel Policy
Communication Keep it simple! One membership card for all Employees Globally
A Plan that is Strategic • Risk Mitigation Is: • Deliberate and thoughtful • With a focused, documented plan • With protocols and review points • Done Correctly It Is: • 3Rights: Care/Response, Time, Location • Mitigates corporate exposures
THANKS FOR YOUR TIME Questions?