Fighting alcohol abuse can benefit insurers

Rough Notes, Mar 2003 by Zinkewicz, Phil

Agent focuses on professionals who help alcoholics and other substance abusers

The term "risk management is used quite frequently in the property and casualty insurance industry. It is a phrase that came into vogue in the insurance industry in the mid-1970s, particularly in the commercial lines segment of the business, when insurers began an increased focus on managing an exposure and controlling it as much as possible as a way to mitigate loss. Moreover, insurers came to understand that sound risk management techniques allowed them to write business that they otherwise would have rejected.

But. while insurers have learned to apply risk management concepts to buildings, bridges and tunnels, they apparently have not yet considered the possibility of applying such techniques to human behavior. This is something that Thomas Van Wagner wants to change.

Van Wagner, owner of the Bay Shore, New York-based Van Wagner Group, is a recovered alcoholic. He had his last drink on March 29, 1968. For the last 30 years, Van Wagner has made alcohol abuse his cause celebre. He has served on the board of directors of The Long Island Council on Alcoholism. was president of the board of The New York State Council on Alcoholism and was also on the board of The National Council on Alcohol and Drug Dependency in New York Citv. Besides serving on these boards.

The is a graduate of The Institute of Alcohol Studies at South Oaks Hospital in Amityville, New York, where he has served on the faculty for 12 years. In addition to all this, Van Wagner has recently formed The Thomas E. Van Wagner Foundation on Alcoholism. But, more about that later.

Van Wagner firmly believes that it is in the insurance industry's own self interest to tackle the problem of alcohol abuse head on. "I have been in the insurance industry since 1946," says Van Wagner. "Many people in the industry do not talk about the enormous costs that insurance companies pay for accidents and other problems related to alcohol and alcohol abuse. A recent study shows that more than 3,000 college students are killed every year as a result of driving while intoxicated while they are away at school. That alone costs the insurance industry hundreds of millions of dollars a year."

The study to which Van Wagner refers is from a task force of The National Institute of Alcohol Abuse and Alcoholism, a branch of The National Institute of Health. The report, A Call to Action: Changing the Culture of Drinking at US. Colleges, says that, on an average day four students die in accidents involving alcohol. An additional 1,370 suffer injuries.

Moreover. the report found that the share of students who drink in "binges"-which the report defines as five consecutive drinks for a man and four for a woman-is at 44% of the total college population. Dr. Ralph Hingson, associate dean of research for Boston University's School of Public Health and the report's chief researcher, says that the 13% of college students who reported having been attacked by classmates who drank too much alcohol translated into 600,000 people, equal to "the entire city of Boston."

The report analyzed data from the Census and the Department of Education, as well as the Centers For Disease Control and Prevention's National College Health Risk Behavior Survey, Harvard University's College Alcohol's Survey, traffic accident records from the Department of Transportation and a printed account in Annals of Emergency Medicine about 300 injuries involving alcohol that were not traffic-- related.

"The teenage drinking problem is enormous," says Van Wagner. "We're not just talking about colleges, but high schools as well. It has become a rite of passage-drink until you pass out. Check out hospital emergency rooms and you will find that a great many of their cases are related to alcohol and drug abuse. The insurance industry pays for a good portion of these problems, whether it is life insurers paying death claims, health insurers paying for medical treatment or property insurers who have to pay for totaled vehicles and other types of property damage. Insurers should be in the forefront of trying to control the situation, rather than just walking away from writing the business."

Van Wagner knows what he's talking about in terms of alcoholrelated insurance exposures. He started out as an insurance agent shortly after he left the army following the end of World War II. During the war, as an infantry soldier, he fought with the 29th infantry division. He fought in France, Belgium, Holland and Germany, and was wounded in Germany. After almost three years in the service, he was given an honorable discharge and was awarded the Purple Heart and the Combat Infantry Badge.

During his stint in the armed services, Van Wagner learned to drink. Oh, not enough to hurt his performance as a soldier, but enough to keep up with the other guys in the off hours. Following the war, Van Wagner worked in the insurance industry holding a number of positions with insurance companies and insurance agencies.