8 Questions for Gus Aivaliotis of Safety National
Originally published in Risk & Insurance | February 24, 2025
As part of our annual Power Broker® coverage and celebration, and in honor of this year’s Workers’ Comp winners and finalists, Risk & Insurance spoke to Gus Aivaliotis, an Executive Vice President and Chief Underwriting Officer for excess workers’ compensation carrier Safety National. What follows is a transcript of that discussion, edited for length and clarity.
Risk & Insurance: Thanks for talking to us today, Gus. What do you see as the most important services commercial brokers and workers’ comp can provide?
Gus Aivaliotis: First and foremost, brokers who interact with the public need to think of themselves as consultants, not salespeople. This mindset is critical, as it involves keeping an open and flexible approach to seeking customer solutions.
A fundamental understanding of customers’ operations, including exposures and controls, is essential. Brokers must know the industry to act as consultants and seek the best solutions for each customer. This includes job site controls and claims management.
Brokers should strive to individualize service rather than selling one answer to every customer. Having claims advocates on staff, especially for middle market brokers, is a significant value-add. These advocates should understand how insurance carriers work and pay attention to meaningful claims, ensuring clients and injured workers receive the appropriate attention they deserve..
Risk control is also critical. If a broker has a resource on staff to ensure customers have appropriate risk management controls in place, such as safety practices that are actively enforced and monitored, with formal protocols identified ,it can make a big difference. Understanding what insurance carriers look for in risk selection and helping customers prevent losses and be recognized for their efforts is crucial.
Ultimately, it’s a holistic view from the broker’s perspective. It’s not just about seeking the lowest priced quote from multiple carriers. The most important thing is helping clients avoid losses in the first place by doing everything reasonable to prevent them.
R&I: What is the importance of providing guidance to customers without dictating, particularly in the context of workers’ compensation claims?
GA: As a consultant, it’s crucial to strike a balance when providing guidance to customers. You can’t demand that a customer take specific actions, but by establishing credibility and taking the time to understand their needs, you gain the ability to influence their decisions.
Many commercial accounts, especially in the small to middle market space, may have never dealt with a severe workers’ compensation claim. It’s essential to help them appreciate the importance of having controls in place before an incident occurs and for them to be proactive in safeguarding the workplace.
Beyond claim avoidance, part of the value-add is coaching and training customers on what to do when they have an injured worker. Early return to work and modified duty are standard approaches in our industry to keep injured employees engaged and connected to the workplace.
Simple gestures, like having coworkers or managers sign and send cards to an injured employee, can be highly effective in preventing feelings of isolation. Keeping employees connected to the workplace reduces the likelihood of them seeking legal representation and helps them focus on achieving maximum medical recovery and returning to work.
Imparting this thought process to customers is part of the broker’s role as a consultant, influencing their clients through expertise and guidance rather than a sales-focused approach.
R&I: What is Safety National’s approach to managing its distribution network?
GA: Safety National, despite being a niche carrier with about 800 employees, has a significant footprint in our targeted space. We place a strong emphasis on face-to-face meetings with our brokers and many of our customers, at least once a year and often multiple times per year at industry events like RIMS and through regional travel.
Our business model relies on field production, with production underwriters, business development people, client services and in some cases, risk control and claims folks located in regional offices around the country and in major placement hubs. We believe that face-to-face communication and building familiarity and comfort with our partners goes a long way in our industry.
In addition to in-person meetings, we reinforce our messaging through webinars and articles on topics of interest, distributed to our brokers. Our goal is to educate and keep our producers up to date on the latest industry trends, which we see as our value-add as a carrier. We view our brokers as partners, not just distribution sources.
R&I: How are brokers embracing technology and adding value to help prevent losses in the first place?
GA: Brokers are really embracing technology, and some easy examples of that are recommending the use of GPS and cameras in commercial vehicles. Auto claims, especially in the Safety National space, drive severity claims, and historically, GPS has been very expensive in commercial vehicles. However, now there are a lot of different options for either in-vehicle or retrofitting GPS systems.
The question then becomes whether to use external facing cameras, internal facing cameras, or both, keeping in mind the appetite of the insured and their employees to have cameras recording them throughout the day. These cameras can detect distracted driving and drowsiness. There is also software available that blocks texting abilities while driving, in order to eliminate that exposure for drivers.
While it’s hard to quantify the losses that you didn’t have, investing in this technology more than pays for itself in terms of avoiding severity losses. Going back not that many years ago, it was just not practical, especially for a larger fleet, as the cost was prohibitive. However, now it’s actually practical to be able to install technological tools like those being discussed here.
R&I: Are you using the same cameras as before, but now with AI tracking instead of human tracking?
GA: Yes, that’s correct. Insureds can utilize existing security cameras u that were previously in place. The key difference is that now, instead of having humans monitor the camera feeds, vendors have implemented AI technology to track and analyze the video data.
The AI system is capable of detecting and identifying various elements within the camera’s field of view. This allows for automated monitoring and analysis without the need for constant human supervision.
By leveraging AI, we can more efficiently process the vast amount of video data generated by the cameras. The AI algorithms can quickly detect and flag any anomalies or events of interest, enabling faster response times and more effective security measures.
R&I: What are your thoughts on the practical applications of technology like AI and the Internet of Things in risk management?
GA: There’s a lot of complexity in the world with cyber, AI, and the Internet of Things. People often wonder about the practical applications of these technologies. Better analytics can provide valuable information on frequency, severity, cause of loss, and location.
The ability to distill large volumes of data into specific, actionable insights is highly valuable. This is a great use of technology, and we’ll see more of it in the future. However, technology often identifies a simple, practical solution to a problem, such as having a training or refresher course for employees or replacing outdated or poorly maintained equipment.
While technology can identify the problem, it doesn’t solve it on its own. The question is, what do you do with the information it provides? Oftentimes, the solutions are very practical and real-world, despite the complexity of the technology used to identify the issue.
R&I: What emerging factors could influence the workers’ compensation market, either now or in the future?
GA: One of the most significant changes in recent years has been the shift to working from home. This raises questions about how to determine when an employee is working and when they are not, and whether injuries sustained at home should be covered by workers’ compensation or health insurance. The extent to which the workforce returns to the office could impact this issue.
The workers’ compensation line of business has performed exceptionally well over the past decade, largely due to the increased safety of the U.S. workplace, particularly among larger employers who have implemented advanced controls, robotics, and AI. However, as people return to the workplace, frequency rates may rise, potentially driving additional costs into the system and affecting the market.
Competition in the workers’ compensation market is currently intense, with many carriers interested in writing more business. However, while frequency of loss has decreased due to better controls, severity has not. In fact, severity has increased, particularly for companies like ours that provide coverage over large deductibles or self-insured retentions.
Medical severity, especially for truly severe losses involving specialized care, ICU stays, prosthetics, and long-term care with extended life expectancy, has risen significantly. Although overall medical inflation has slowed in recent years, the costs associated with these severe claims continue to climb.
R&I: I suppose in any cycle involving frequency or severity, an underwriter needs to stay alert and not find themselves behind a trend.
GA: The insurance industry could indeed build a legacy of claims with pricing that doesn’t support it, which is not unprecedented. While we respect NCCI and the data they accumulate, it’s important to note that there are bureau states with significant exposure not included in their data, as well as self-insured employers, many of which are the largest in the country.
These self-insured employers often have a majority of their payroll concentrated in certain states that are not included in NCCI data. As a result, not all loss costs are captured by NCCI data sets My company specifically looks at the severity trend on medical, which is one of the factors that may not be fully captured in NCCI’s data. Some carriers may rely fully on NCCI indications, while Safety National uses a blended approach using data from NCCI, bureau states and our own loss data captured over many decades of providing workers’ compensation coverage for large employers.