American Oil and Gas Reporter - December 2015 - 77

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SpecialReport: Insurance Update
At the same time, the birth rate is down.
The effects of these two forces-a larger
elderly population and fewer young people-will result in far fewer individuals to
contribute to Medicare and support the demands the older generation is placing on
the system. Pressure from increased demand on the U.S. healthcare system is likely to have a number of adverse effects, including an increase in medical costs as demand exceeds supply.
For insurers, medical is frequently the
largest single casualty loss-cost driver.
Medical also is the most dynamic of the
property/casualty cost drivers, since it is
impacted by so many environmental factors (federal and state legislation, changing demographics, the changing healthcare
delivery system, etc.).
In addition, the aging workforce, overuse of pain medications, and the regulatory environment all impact workers'
compensation medical costs. With workers' comp and general liability being
long-tail lines of business, they are particularly sensitive to future medical costs and
the factors that impact them, which have
to be taken into account in pricing.
It is critical to partner with an insurance
carrier focused on strategic management
of these issues-a carrier with the resources to innovate and develop new
strategies to manage this growing and
evolving driver of costs to the customers'
businesses. We understand the importance
companies place on effectively managing
the medical component of workers' compensation and other property and casualty claims. Travelers manages more than
250,000 workers' comp claims a year and
employs more than 500 nurses in 21 fullservice claim centers.
One of the ways we are helping to manage the cost of a company's workers'
comp program and to ensure the company's injured employees are able to return
to work as soon as medically appropriate
is through our ConceirgeCLAIM™ nurse
program. This program provides personal assistance to injured workers to help
them through the workers' comp process,
and has helped to reduce the amount of
time for workers to return to work by 40
percent. We have doubled our number of
sites to more than 60 locations across the
country.

prices obviously have diminished activity, but the complexities of pad operations
are only increasing, with longer laterals,
tighter spacing, more condensed activity
within "high-graded" sweet spots, greater
emphasis on efficiency (tighter scheduling
and concurrent activities), etc. What are
the biggest risk factors in pad operations?
How are insurers responding to the needs
of pad operators in the context of the current business environment?

BOQUIST: Multiwell pad operations
bring several of these hazards onto the well
site at the same time. Some of the biggest
risk factors we see include well spacing
and design, the concentration of property and assets, improper maintenance and
inspection programs, poorly coordinated
job sites, and inadequate emergency response planning.
Greater well spacing can give emergency response crews more room to op-

Q: Oil and gas insurers have developed

comprehensive programs to specifically
address the additional risks in multiplewell pad operations. Low commodity
DECEMBER 2015 77

American Oil and Gas Reporter - December 2015

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