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Getting to the root of the problem: travelers' state-of-the-art high-tech laboratory enables experts to find the causes of major losses and fraud. (Property/Casualty).

It looks like a Home Depot appliance department scorched by a flash fire. On multilevel shelves reaching high up to the tall ceiling, hundreds of singed or blackened washers, dryers, microwaves, stoves, televisions--and even one hot tub--await an expert judgment on what went wrong with their operations, why it went wrong and who is responsible.

This extensive collection makes up the evidence warehouse at Travelers Property Casualty's Loss Prevention and Engineering Laboratory in Windsor, Conn., a 40,000 square-foot facility with 37 staff members, including chemists, engineers, industrial hygienists, a metallurgist and technicians. It's located just five miles north of Travelers headquarters in downtown Hartford. The company's three warehouses in the Hartford area house about 13,000 pieces of evidence, mostly damaged appliances and other machinery. The Travelers lab receives about 100 such submissions each month from throughout the country.

"Eighty percent of what we do here deals with fires and explosions," said John P. Machnicki, second vice president of Travelers' engineering laboratory. "We specialize in that because fires and explosions tend to be the most costly kind of loss that we deal with. They are the most complicated types of loss because a lot of the evidence is destroyed, and there aren't a lot of experts Out there."

The work of the analytical and engineering lab supports loss prevention, industrial hygiene, underwriting and claims activities for the carrier's property and workers' compensation lines. Established in the 1920s, the lab is fully accredited by the American Industrial Hygiene Association and adheres to a quality assurance program that meets or exceeds the standards of that association as well as the Occupational Safety and Health Administration and the National Institute for Occupational Safety and Health, Travelers said.

Machnicki declined to comment on the cost savings for Travelers. But he did point out that before the carrier decided to go with its in-house experts, many cases proceeded more slowly due to the hiring of external experts, a practice that caused a number of cases "to go in the wrong direction from a cost perspective as well," Machnicki said. In the first six months of 2002 alone, the lab paid for itself "three or four times over" by delivering vital information to the company's claims department, he added.

In fact, the guiding mission of the lab is to bring science to the claims process, and claims these days are becoming increasingly complicated, Machnicki said. Take the case of a car careening off the road and into a house. All sorts of questions arise: Was the driver drunk? Speeding? Were the road conditions poor or the brakes impaired?

Finding the answer or answers requires a forensic examination of all the factors that may have contributed to the accident. "It could be that the driver had a blood alcohol content that was close to the legal limit, but there could also have been engineering or other scientific factors that caused the crash to occur," he said. "So the claims department really needs to know all of the story, not just part of the story."

That's where the lab's experts come in. Many times their efforts in unraveling the causes behind a loss can require anything from analyzing carpet and wood fibers to computer-modeling a burst underground pipe to measuring the action in each frame of a home video to prove that a motorcycle policeman was not speeding when he accidentally struck a child running across a street.

Time Matters

In the case of a fire or explosion at an insured's location, the lab team wants to get there fast. One reason: conducting an investigation quickly means that the insured can resume business operations as soon as possible. "If you wait more than 24 hours, sometimes the insured just takes a backhoe and starts moving things out of the way, putting them in the back yard in a Dumpster," Machnicki said. "Or they may take the product and send it back to the manufacturer." Thus, opportunity can be lost if the insured doesn't recognize the importance of the forensics process, he added.

In a major case response, Travelers notifies the engineering lab of any property loss of more than $500,000, and the engineers immediately start monitoring it. An investigator from Travelers Special Investigation Unit responds to the scene and updates the lab. "Then we decide if they need forensic backup," Machnicki said. If they do, one or more people from the lab will travel to the scene and spend a week or two trying to unravel what's happened. the initial objective always is to work with the insured to preserve the site and preserve the evidence, he said.

That was the approach the lab took in September 2001, when a huge turbine blew apart in a building that Travelers insured in lower Manhattan. The turbine, which ran the air conditioning system for a large multistoried building near the World Trade Center, suddenly tore loose, cutting off cooled air to the structure and prompting the financial firm that occupied the building to move its employees offsite while temporary cooling units could be installed on the street. Travelers' lab experts knew they had to reach the site fast to preserve every piece of evidence.

Within hours of this multimillion dollar failure, lab workers had identified all the twisted shards of the machinery and photographed them. They hired riggers to retrieve parts of the system still hanging from the superstructure. The plan was to ship everything to the Windsor lab. "But in the middle of that, Sept. 11 happened," Machnicki said, and Travelers wasn't able to get back into the building until the following January. "Thankfully, we had all the evidence tagged," he added.

Over a six-month period, engineers at the Windsor site rebuilt the engine as best they could. The investigation is still underway.

In this case and others, the lab's experts ultimately may have to describe their scientific findings to a jury. "But first we have to convince our own claims handlers and our attorneys as to what happened," Machnicki said. With the more complicated cases, the scientists will assemble Power Point presentations, then go to Travelers' claims and legal personnel to explain what they think happened and why. In this way, the attorneys and claim staff will understand the technical aspects of the loss more thoroughly, he added.

Finding the Right Expert

Since the lab cannot handle every claim involving Travelers, the company has to rely on outside engineers and scientists to perform some investigations. Like many other carriers, Travelers invests millions of dollars every year in hiring experts to help solve these problems. But for the past 10 years or so, the engineering lab has taken a formal approach to making sure the outside experts know their stuff. It has developed an "expert profile," and part of its training program aims at helping claims handlers understand if they have the right expert for the job.

"The laboratory and our special investigations unit started to track cases that were being investigated by outside people, and we found that a lot of the experts were, inflict, not experts at all," Machnicki said. "All we want to know is what happened, so we can make an appropriate decision."

A recent case in point: Travelers insured a designer of containers for a byproduct of a manufacturing plant. In this instance, the large, closed cylinders, 60 feet high, had riveted, steel sections that connected the panels making up the entire vessel. The containers were located in a desert in a very warm climate. One day, one of the silos that was nearly full collapsed, resulting in a significant property loss.

The insurer of the company that owned the containers cited bad design, putting the onus on the designer and his insurer, Travelers. Subsequently, the owner's carrier subrogated against Traverlers.

Meanwhile, when the claim was received, the expert investigating what happened had difficulty explaining the event, but posited that heat and combustible gases played a role in what seemed to be an explosion. To determine the exact cause, Travelers' subrogation defense team turned to the engineering lab for an analysis of the cause. Machnicki and others listened to the expert's theory and immediately decided it didn't make any sense chemically--the scenario he described could not have taken place, they said.

So, one of the lab's mechanical engineers looked at the evidence and discovered that it was a case of a documented, but not widely known, natural phenomenon known as thermal-ratcheting. This meant that the expansion of the tank in the hot sun caused the byproduct to settle down. Then at night with cooler temperatures, the tank would contract, but this time against a larger solid, putting tremendous stress on the rivets and ultimately exceeding the strength of the vessel.

Sprinkler Sense

Much of the activity at the Travelers lab centers on education and training. In the rear of the facility, the company has installed a large hydraulics lab featuring a series of red valves of different shapes and sizes that line the walls. Opposite the valves is a glass enclosure with ceiling sprinklers that release torrents of water at the throw of a switch. Here, the lab staff gives training sessions that show how these valves operate sprinkler systems in large buildings.

"On the pre-loss side, we want our engineers to be able to look at this plumber's nightmare and understand what all these valves do, how they work, if they've got the right kind of system for the building and that it's maintained properly," Machnicki said. "Our investigators also come here and learn about this because when we have a fire in a sprinkler building and the fire gets away from the sprinkler system, that's always a problem. Our investigators need to understand how the sprinkler works and understand why, if it was working, it didn't control the fire."

The lab's array of advanced instruments also is capable of detecting arsonists and counterfeiters. One machine, for example, can readily identify compounds in many different kinds of debris samples, including carpeting and plastic, which tend to hide a gasoline pattern. This makes it easier to prove if an accelerant such as gasoline might have been used to set a fire. In the case of a suspected forged check, lab technicians can slide it under a video spectral comparitor screen and show how someone has tried to alter the amount to be paid. Marcel F. Baril, laboratory manager, showed how a check for $1,111 was changed to read $9,471. "Whoever put this mark on this document used two different inks," he said." You get a receipt and it's done with a black ink pen, and some people think they can alter it with a black ink pen. But not all black ink is created equal."

Travelers' lab has worked with a major international bank to improve its check stocks and guard against fraud. Machnicki pointed out that many banks now are using security features that can be embedded in each check. "What that means is, we have the bank's logo with a block of multiple colors, and if you put that under a black light, it shows up differently so people can't counterfeit the check stocks," he said. "With thermochromic ink, a teller can hold a finger on an embedded key for a couple seconds, then take the finger away, and the key will disappear. Counterfeiters could simulate the image but never the chemistry on that key."

With any questioned claim, it's important for the lab to reach a quick resolution in its investigation because claims handlers await the outcome to determine payment. For example, if evidence of gasoline is discovered in a bedroom following a house fire and arson seems likely, the insured may not be covered. "This is why we have to get this turned around immediately," Machnicki said.

That was part of the urgency behind his investigation recently of a suspicious house fire in New York State. Also, local police suspected that a young couple had set their house ablaze, and the police were poised to file charges against the husband.

Basement Blaze

At the site, Machnicki learned that just before the fire had broken out, the husband had been in the basement cutting out wooden Halloween ornaments with a scroll saw. His young daughter was with him while his wife was upstairs in the living room painting the ornaments for a church fair. When the man had cut what was needed, he took his daughter upstairs to the living room, then opened up some sliding glass doors because the paint odor was too strong. Within seconds, smoke filled the living room and the family raced outside.

Fire inspectors determined that the blaze, which burned a hole in the basement floor and caused considerable damage, had started at the bottom of the basement stairs. Yet they found no ignition source there, prompting them to think the fire had been set with an accelerant.

When Machnicki questioned the husband, he said that his daughter had a fascination with the flame that rose inside the unit once the furnace went on. In fact, just before the two had gone upstairs that day, the father had yelled at the child to stop playing by the furnace. Ever since the fire, he added, he had been unable to locate her security blanket that she was carrying at the time.

"I looked at the burner and there was a melted stain down the side that went to the floor and right over to where the fire started," Machnicki said. "In taking up some of that material, I found there were fibers and, in fact, the fibers were from the blanket that the daughter had had."

He theorized that the child had taken the cloth and had stuck it in the burner. When her father told her to come upstairs, she left it there. Once the sliding doors were opened upstairs, the thermostat reacted to the cooling of the room and signaled the furnace to turn on. The furnace flame, in turn, ignited the blanket, which burned down the side of the furnace and over to the stairs. It also happened that the wife used the under-stair area to store all her seed trays-an excellent source of fuel for the flames. "Those burned away like crazy and that's what caused the fire," Machnicki said. "It was just accidental."

When Travelers told the local prosecutor that it was going to pay the claim, he dropped the plan to charge the husband with arson. "There was no way they were going to move ahead when we had all this evidence," Machnicki said. "Their investigation just didn't yield what ours did."

RELATED ARTICLE: Assessing the Air in the Workplace

A big part of the work done by Travelers Property Casualty's Loss Prevention and Engineering Laboratory is in industrial hygiene, which deals with potentially dangerous substances inside a factory or other workplace. This can cover everything from general indoor air quality to specific task-related exposures such as lead, solvents and silicon.

"We have engineers and outside accounts that take air samples of their work areas, and they send them to us," said Marcel F. Baril, laboratory manager. "We analyze the samples and give them an idea of their employees' exposure to chemicals in the environment."

Typically, this service is provided to Travelers' larger industrial accounts. The carrier's industrial engineers will travel to the insured's location, perform hazard assessments to identify the kinds of exposures that workers might face, take samples and then send them back to the Connecticut lab for analysis. Travelers also will train these insureds to do their own testing.

The industrial hygiene lab houses equipment that Travelers' engineers use out in the field. The equipment includes pumps for collecting air samples from workers who may be exposed to different types of contaminants. For example, a small pump for monitoring organic vapors can clip on a person's belt, usually in back so as not to interfere with normal work. Tubing extends from the pump up the employee's back and over his or her shoulder to. lodge at the collar or jacket lapel--in the general area where the worker is taking a breath.

"When we're taking an air sample on an employee in a building, we want to collect a breathing zone sample to see what they're breathing in while they're working," Baril said. "Typically, we want to take an eight-hour sample to see what they're being exposed to during a normal eight-hour workday."

The lab's instruments can measure indirect air quality, covering carbon dioxide, humidity and temperature. Technicians also will look for dust, particulates or metal fumes from, for example, a welding operation.

"Say we go into an office and people are complaining of throat irritation and dry skin," Baril said. "We'll take some measurements in there--maybe, for example, there isn't enough humidity being put back into this office. When facilities management people are looking at saving costs on energy, they'll reduce how much outside air is coming into the building and how much humidity they're putting in there. What they're doing is making the air unhealthy and uncomfortable."

All Travelers' air sampling equipment is maintained in the industrial hygiene lab. The company has a loan program for insureds' safety managers who come to Windsor to learn how to use the air pumps, then borrow them to take back to their firms where they perform their own hazard assessments. The pumps then are shipped back to the Travelers facility for analysis. This means that the insureds don't have to hire a consultant or have an industrial hygienist collect their air samples, Baril said.

Hundreds of firms are taking advantage of Travelers' program. "This really has been beneficial," said John P Machnicki, second vice president, engineering laboratory. "They're doing all kinds of industrial hygiene where in the past they might not have done any."

Work in Progress

While Travelers is not the only major U.S. insurer to operate its own industrial hygiene lab, Hartford Insurance Group and Liberty Mutual Insurance Cos., among others, do similar work but not to the extent that Travelers does. For one thing, other carriers do not provide the range of industrial hygiene training and educational programs that Travelers offers, nor do they work as much in forensic calibration instrumentation--the maintenance of the industrial hygiene equipment that analyzes air samples.

"This is a critical function, because if we send equipment out there that isn't calibrated and isn't working right, we're going to get the wrong results," said John P. Machnicki, second vice president of Travelers' engineering laboratory. "When an industrial hygienist takes an air sample and he or she is wrong about the exposure, potentially a person's health is at risk."

But there's one area of research for research's sake that Travelers' lab doesn't delve into: ergonomics. While Travelers is very active in ergonomics in both the loss control and claim areas, this capability is part of Travelers' Loss Prevention & Engineering division, the lab's parent organization.

Even Travelers' researchers say, however, that Liberty Mutual, one of the largest multiline insurers, is clearly at the forefront of ergonomics research. Liberty Mutual, based in Boston, also happens to be the nation's leading provider of workers' compensation.

Established 48 years ago, the Liberty Mutual Research Center for Safety and Health investigates the causes of workplace injury and disability. It is the only facility of its kind in the insurance industry or, for that matter, in the world, said Tom Leamon, vice president of liberty Mutual and director of the research lab.

Each year, the 45,000-square-foot research center draws about 2,000 visitors, including customers, regulators, prospects and brokers. But in one recent week, Leamon also greeted safety experts from China, Colombia, France, Great Britain, Finland and Canada.

Basically, the center's researchers and engineers investigate how people perform at work. "We look at things like slipping and falling, lifting and pulling, repetitive work using keyboards and hand tools," Leamon said. "When we talk about safety, our field of endeavor is not just buildings, materials or machines. It's anyone at work who would like to know about the physical, psychological and anatomical restrictions on them and how work affects them."

Not only is the research center unique, but Liberty Mutual's approach to its research findings veers from the norm, too. "We're probably the only company in the world, not just in insurance, which gives away research findings," Leamon said. "We publish 100% of all our findings and the competition can have it." In fact, he was expecting a visit soon from staffers at Travelers Property Casualty Co.

Liberty Mutual launched the lab because it made good business sense, Leamon said. Years ago, company executives recognized that the best way to make a profit was to pay fewer claims, so if the insurer could understand how people were injured on the job, it could find ways to avoid those injuries, he said.

Leamon said it's difficult for the company to quantify what the research center contributes to its bottom line. For one thing, since Liberty Mutual shares its workplace safety research, it doesn't gain an economic advantage that way, he noted. "Where the economic advantage does come in is with our 600 engineers who take our knowledge base--including their own experience, obviously--and improve customer workplaces;' he said, adding that this body of engineering talent makes up probably the largest consulting group in the world in workplace safety and health.

Some of Liberty Mutual's engineers work inside the insured's buildings and become part of the policyholder's team, working to see that operations are ergonomically safe and checking for other hazards as well." So many customers want us to do that because, in each of their organizations, they see the financial returns," Leamon said.
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Title Annotation:investigation of fires
Comment:Getting to the root of the problem: travelers' state-of-the-art high-tech laboratory enables experts to find the causes of major losses and fraud. (Property/Casualty).(investigation of fires)
Author:Bowers, Barbara
Publication:Best's Review
Geographic Code:1USA
Date:Jan 1, 2003
Words:3626
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