Insurance as relates to USMS Value Proposition

evmoevmo San FranciscoAdmin
edited March 2013 in General Discussion
Discussion has veered off the original topic, so I created a new thread.

Related thread: USMS OW SANCTIONING
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  • My opinion, based on very little other than reading the threads, and my own involvement as an LMSC Open Water director, and new race organizer:

    The thread here and the thread at the USMS website have offered as much criticism as they have offered potential solutions. I think that folks more favorable to USMS got a bit defensive, and folks who are more in favor of open water than a specific organization (myself included) got their feelings a bit hurt.

    While I think that USMS could have come up with a better ultimate position, I think that for the short amount of time that they had to respond to an insurance premium more than twice what they expected, I think that they can be forgiven (for now) for coming up with a solution that feels to me a bit short sighted and overly prescriptive. I hope that they take a look at things again for 2014, and take the care to solicit input from more people participating in open water swimming as both athletes and as race directors.

    In my LMSC, the leadership is very skewed toward the pool swimming point of view. While they are good people who understand very well what it takes to put on a pool swim, they don't understand open water swimming well enough to provide very much meaningful input to open water race safety. I understand that the task force has open water swimming experience, and probably some race direction experience, but depending on the nature of the race, that may or may not be applicable. The race I am putting on falls into the "Sheltered puddles that can be supported by kayak" category, but even so, the new requirements have complicated things for me.

    I do think it's a shame that both threads have degraded, somewhat, to traded attacks as opposed to a useful solicitation of input. I do think that BOTH sides are overly emotional. I don't think that criticism is necessarily baseless if it doesn't have a solution (even if an accompanying solution would be more ideal). I think that resorting to an "alt" name to criticize a debate opponent is quite immature.

    Take this post for what it is, an opinion, nothing more.
  • NiekNiek Member

    I think that for the short amount of time that they had to respond to an insurance premium

    That I don't understand. If the policy has to be renegotiated each year, one doesn't do that in the last week or even the last month.
    So my question is: 1/'Why did they have insufficient time? 2/'If they had sufficient time, why did they negotiate such a bad deal?
    http://openwaterswimming.eu - Cold, wind, waves, sunburn, currents, jellyfish and flotsam! Hop in and join the fun!
  • bobswimsbobswims Charter Member
    timsroot said:


    Take this post for what it is, an opinion, nothing more.

    I think you greatly underestimate the value of your comment's tone and content.

  • AquaRobAquaRob Charter Member

    why did they negotiate such a bad deal?

    @Niek In fairness to USMS they did better than some people realize. I'm not sure if it has popped up anywhere else on the forum but the original deal from their insurer came through at $750,000 and they worked it down to $335,000 which is a substantial discount (source: http://www.usms.org/admin/minutes/bod-2012-12-17-1.pdf). Can you imagine the carnage paying that $750,000 would have wreaked on pool and open water swimming? Yikes. Unfortunately that deal was still $211,000 more than budgeted, and even more unfortunately open water events get the privilege of paying for a lot of that. Yay :/

    I think the insurance increase aftermath could have been handled better, in particular the public relations side of things. Regardless we've lost whatever fight there is for the 2013 season. You either need to get your own coverage or buck up and pay $1000 for a USMS sanction and agree to their new rules. We need to look forward to other options or ways to fix USMS for 2014.

    The problem I see is that a lot of us are focusing on the wrong people. While we're busy fighting with USMS the real "bad guy" is the insurance industry. They started this debacle not USMS. Insurers don't like marathon swimming and they don't really want to be involved with it. Call around and you'll find very few companies are willing to insure oceanic activities almost none want to involve motorized craft. Finding insurers that are willing to cover what we do at a reasonable cost is the challenge that we need to address to save the future of organized open water swimming events. USMS was great for us for a long time, but we need to start considering alternative options for our future because they may need to drop us in the future to keep the organization from imploding financially due to insurance costs. Hopefully it doesn't come to that, but I don't want to sit around with no back up plan waiting for it to happen.
  • If you read Julie Heather's blog, there was something a while back about three claims against the USMS insurance policy during the last year, and how the rise in premium was in response to those claims. Only two of those claims were open water incidents during events.

    Anyone else interested in knowing what the third claim was all about, and how it had an impact on the rise in premium?

    There have been open water incidents in the past, but never any impact on the premiums. It sure raises some interesting questions!

    :bz
  • bobswims said:

    I think you greatly underestimate the value of your comment's tone and content.

    Honest Question: Did you mean that as a compliment or a criticism?
    Niek said:

    That I don't understand. If the policy has to be renegotiated each year, one doesn't do that in the last week or even the last month.
    So my question is: 1/'Why did they have insufficient time? 2/'If they had sufficient time, why did they negotiate such a bad deal?

    Based on my cursory understanding from an outsider's perspective, it sounded like a lack of communication on both sides. We all got an email on Dec 31 to stop issuing USMS Open Water Sanctions while they figured out the new rules. My guess is that they went to renew their policy in November or December, and the insurance company told them the premium increase at that point. Then, they had to scramble, and we got what we got. Like I said in my previous longwinded post, I hope they take more time and solicit more input for the 2014 insurance policy.
  • Niek said:

    I think that for the short amount of time that they had to respond to an insurance premium

    That I don't understand. If the policy has to be renegotiated each year, one doesn't do that in the last week or even the last month.
    So my question is: 1/'Why did they have insufficient time? 2/'If they had sufficient time, why did they negotiate such a bad deal?
    I am not an insurance expert nor was I involved directly in any of the negotiations surrounding the current US Masters Swimming insurance policies. So please understand this is second-hand lay knowledge…

    First, there are very few underwriters in that are willing or able to deal with the insurance needs of a national sports governing body. This is vastly different than event based insurance, which is more easily obtained.

    Second, insurers don’t write policies greatly in advance of the start date. For Masters Swimming the policies begin January 1, so the insurance company will typically give a quote 4 to 6 weeks in advance. Masters has asked if they could have more lead time, but the answer has always been no. Historically this had not been a problem, since increases were in the 5-10% range and not like 2013 with 300% increase with lots of new restrictions and exemptions.

    So given that there were only a couple of underwriters and the hard deadline that insurance needed to be in effect on January 1st, there wasn’t much room to negotiate. I personally believe the US Masters Swimming insurance broker and staff got the best deal they could from the insurance underwriter.

  • timsroottimsroot Member
    edited March 2013

    If you read Julie Heather's blog, there was something a while back about three claims against the USMS insurance policy during the last year, and how the rise in premium was in response to those claims. Only two of those claims were open water incidents during events.

    link?

  • david_barradavid_barra Charter Member
    edited March 2013

    Anyone else interested in knowing what the third claim was all about, and how it had an impact on the rise in premium?

    I'm interested in knowing what the claims are. I do understand that there may be a hush order if cases are pending, but at least some of the information should be in the public domain.
    ...anything worth doing is worth overdoing.
  • david_barradavid_barra Charter Member
    AquaRob said:

    why did they negotiate such a bad deal?

    @Niek In fairness to USMS they did better than some people realize. I'm not sure if it has popped up anywhere else on the forum but the original deal from their insurer came through at $750,000 and they worked it down to $335,000 which is a substantial discount (source: http://www.usms.org/admin/minutes/bod-2012-12-17-1.pdf). Can you imagine the carnage paying that $750,000 would have wreaked on pool and open water swimming? Yikes. Unfortunately that deal was still $211,000 more than budgeted, and even more unfortunately open water events get the privilege of paying for a lot of that. Yay :/
    Rob, I think everyone understands that the insurance situation in the USA sucks. There is a lot of redundancy built into the system.
    If I may though: I believe that the primary function USMS provides to a majority of its membership is insurance.... insurance required by aquatic facilities for practice groups. Most USMS members don't compete in either pool or OW, and I would say that the majority that do venture into OW are doing so in triathlon events with event insurance provided by USAT.
    So... where is the value for swimmers whose primary focus is OW?
    Is it really necessary to have $11,000,000 of coverage for pool workouts?
    ...anything worth doing is worth overdoing.
  • D'oh, I can't find where I read it. Maybe it's even in meeting minutes somewhere. The thing is, there have been deaths in open water and pool events throughout the time USMS has been with this insurance company. Something was...a little different...this time around. There are many reasons why an insurance company would raise premiums, but the bottom line is they saw USMS as having much greater potential for liability in 2013 than in previous years. Maybe it's just the number of lawsuits after years of relatively little activity, but then you'd have to ask, why are people more inclined to sue USMS now than in the past?
  • Ok, here are two links- maybe these are what I was trying to recall.

    http://lieshurtbutwhocares.blogspot.com/2012/09/look-at-jump-in-insurance-budget.html

    http://lieshurtbutwhocares.blogspot.com/2012/12/crisis-of-culture.html

    Apparently, there was a defamation lawsuit involving Nancy Reno and Conejo Valley Masters, which had been funded by Jeff Moxie early in his Presidency. USMS got dragged into it because it involved a USMS registered club, and it seems there was $10,000 payout. The amount doesn't seem significant, and at that point the rate increase wasn't as alarming as the $750K number, but I really think the idea of a defamation lawsuit and potentially others would raise the eyebrow of an underwriter. If there was much more activity in this area than in the past, it would be reasonable to think it would somehow be reflected in the insurance.

    I guess what I'm trying to say is, the raise in premium was a response to something - and I'm sure we're not hearing the whole story about what that is. Knowing the company and how long they've been insuring USMS, I don't see the premium hike as a random act of greed.
  • AquaRobAquaRob Charter Member
    @david_barra - the value is becoming increasing small in my opinion. I always saw being a paying USMS member as supporting a group that was big enough to lobby for swimming in various capacities to include insurance. I think now that USMS appears to be losing the ability to do that in an affordable fashion the best option would be to start an open water organization with our own captive insurance company. I have a feeling that's easier said than done... anybody out there know anything about how to do that :)

    In response to @BillVolckening's point, you mention that injuries and deaths have occurred previously without an adverse impact on insurance rates. I can't say for certain but I imagine the most recent major OW accident is probably the worst in the history of USMS from an insurers perspective. If we want to focus on in-competition deaths I'd venture to say most were connected to existing conditions and out of the control of the race directors. I'm sure any worthwhile insurance lawyer can talk his way out of paying for an in-competition heart attack, it's his job. A tragic boat accident ending in loss of limb is a way different story. I don't know for certain but I'd have to guess that's more likely to have impacted our rates than one defamation suit. I would imagine our insurer didn't enjoy that claim, but I doubt it was the catalyst for a $600,000 increase to the original insurance bid.

    also for what it's worth Nancy is my friend and I used to be on her team so let that flavor how you read my post any way you'd like.
  • david_barradavid_barra Charter Member

    Ok, here are two links-.

    Some of the info is certainly relevant, but I have to say.... I find the whole revenge blog thing a little creepy.
    ...anything worth doing is worth overdoing.
  • evmoevmo San FranciscoAdmin
    (Comment from @BillVolckening, posted to the wrong thread):
    LOL, I had one of those blogs for a couple months but took it down. The purpose was really to vent my frustrations about being forced out of my job, and it served its purpose.

    @AquaRob- it could be that the Maui Channel Swim incident was the true reason, but then I'd have to ask why USMS would've been named in the lawsuit. The only answer I can come up with it USMS led event directors to believe they were covered by virtue of granting a sanction, and they have not been clear about what the insurance is meant to cover.
  • (now THAT's what a moderator should really do!)
  • david_barradavid_barra Charter Member
    AquaRob said:

    @david_barra - the value is becoming increasing small in my opinion. I always saw being a paying USMS member as supporting a group that was big enough to lobby for swimming in various capacities to include insurance. I think now that USMS appears to be losing the ability to do that in an affordable fashion the best option would be to start an open water organization with our own captive insurance company.

    I belong to a swim group http://www.minnewaskaswimmers.org/ with a membership of >800. This group was formed to gain limited access to swim in a lake that had been off limits for a decade. I would say that 15-20 percent of us are also members of USMS, maybe 25 percent USAT, and the remainder, just a bunch of of folks that enjoy the opportunity for a recreational dip in a beautiful mountain lake. The common denominator is, we all would like to see greater access to open water for swimming. I had always thought that we (MDSA) should become a USMS club, because surely the affiliation with a national organization of some fifty thousand would carry some weight with local governments, and surely USMS would consider access a crucial component to encourage people to swim!
    The few times I brought this up on the forums met with little support. The reactions from BOD members that I mentioned it to were tepid.
    ...anything worth doing is worth overdoing.
  • bobswimsbobswims Charter Member
    timsroot said:

    bobswims said:

    I think you greatly underestimate the value of your comment's tone and content.

    Honest Question: Did you mean that as a compliment or a criticism?
    Compliment of course.

  • IronMikeIronMike Bishkek, KyrgyzstanCharter Member
    @david_barra, imagine a group of national OW swimmers like your MDSA! Like, the US Long Distance Swimming Association.

    If USAT can get coverage for 100s of athletes for less than a thousand bucks (if I remember the discussion correctly), imagine what the USLDSA could get!
  • ChickenOSeaChickenOSea Charter Member
    A friend recently suggested I insure myself with Lloyd's of London.
  • AquaRobAquaRob Charter Member
    @chickenosea my adventure beard is insured with them for 3.7 million dollars, true story... that I just made up... :)
  • ChickenOSeaChickenOSea Charter Member
    I'd expect no less! Do they require you to wear beard protection when immersed?
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