In the Spotlight: Arthur Cadorine

Arthur Cadorine accepts AMCOMP’s Legends Award for lifetime achievement presented to him by Carole J. Banfield, Executive Vice President – Information Services and Government Relations, ISO, and 2004 Legends Award honoree.

Arthur Cadorine is vice president of ISO’s Information Acquisition, Development, and Service, with responsibility for ISO’s workers compensation information products, reinsurance services, contractual and license products and development, and maintaining all statistical plans. He is a Member of the American Academy of Actuaries (MAAA), a member of the Casualty Actuarial Society (CAS), and a past chairman of the CAS Data Management Information Committee. For his contributions to the actuarial profession, the CAS has recognized him with its Matthew Rodermund Service Award. He is past president of the Insurance Data Management Association (IDMA). Mr. Cadorine earned the IDMA Fellow in Insurance Data Management (FIDM) designation and is a recipient of IDMA’s Gary Knoble Award.

You were recently awarded AMCOMP’s Legends Award for your lifelong outstanding achievements, leadership, and contributions to the field of workers compensation. What do the award and your involvement with AMCOMP mean to you?

To be a member of an organization that makes such an important educational contribution to the field of workers compensation is gratifying. To be chosen by my peers as one of its “Legends” is quite an honor. I’ve been involved with AMCOMP for many years, serving on several of its program committees. During that time, I’ve had the pleasure to work with many outstanding and dedicated people, who all contribute a tremendous amount of their time, expertise, and effort for the betterment of the industry. What it means to work with them in such an organization and then to be recognized with this distinction is difficult to put into words. I believe strongly in AMCOMP’s mission and urge all those in the industry who are not yet pursuing their AMCOMP accreditation to get started and get involved. (www.amcomppro.com)

You’ve been with ISO and involved in the industry for more than 44 years. How has the workers compensation field changed in that time?

In many ways, it has changed, and in many ways, it has remained the same. For example, workers compensation still has a mandatory classification scheme, as well as a mandatory rating plan. One major change is what’s driving the costs of claims. The primary cost driver for workers compensation has shifted from indemnity, which made up the majority of the costs in the 1980s, to medical payments, which now represents more than 60 percent of the dollars paid out. There’s also an increase in the number of insureds who are self -insuring and more contracts being written with large deductibles. The workers comp system has also seen a rise in fraud, including more and more complex schemes involving multiple parties. (See related article.)

What do you think will be the biggest challenges facing workers comp carriers in the future?

Well, certainly fraud is a growing challenge, and we need to place greater emphasis on fraud detection throughout the system. According to the National Insurance Crime Bureau, workers comp fraud accounts for about 25 percent — or $7.2 billion a year — of all property/casualty insurance fraud and is the fastest-growing segment of insurance fraud in the nation. Another big challenge in our immediate future is the turbulent economy, how it will affect the workforce, and its repercussions on the workers comp line. Longer-term challenges include coming up with reliable ways to identify the cost drivers of today and tomorrow and being adequately prepared for catastrophic events, such as natural hazards and terrorism. A big factor in carriers’ ability to overcome those challenges will lie in their ongoing promotion and support of educational programs, knowledge-sharing forums, and professional organizations designed to keep workers comp professionals current with the latest issues, tools, and technology.