<- Back

Liberty Mutual: Helping to Advance the Future of Occupational Safety & Health

Karl Jacobson, Senior Vice President of Liberty Mutual’s Loss Prevention Department, has 30 years of experience with the organization. In this interview, Jacobson explains how safety, health and environmental (SH&E) professionals can make the most of Liberty Mutual’s studies, surveys and research, and he offers his insight into the new ANSI/AIHA Z10 standard.

Please provide a brief overview of Liberty Mutual and of your responsibilities as Senior Vice President of the Loss Prevention Department.

Since its founding in 1912, Liberty Mutual has helped people live safer, more secure lives by providing insurance products and services to prevent and control loss. This focus and commitment has helped the company grow. Today, Liberty Mutual Group (LMG) is a diversified global insurer and the sixth largest property and casualty insurer in the United States based on 2004 direct written premium. As of December 31, 2005, LMG had $78.8 billion in consolidated assets and $21.2 billion in annual consolidated revenue. The company ranks 102 nd on the Fortune 500 list of largest corporations in the United States based on 2005 revenue.

I am responsible for safety research, developing loss prevention technical services and helping to train the more than 700 safety and health professionals who work with our commercial insurance clients everyday. These professionals work within Liberty Mutual’s operating units: National Market, which serves large companies; Business Market, which directly meets the need of middle-market companies; Wausau Insurance, which services the middle-market through insurance agents and brokers; and the Regional Companies of Agency Markets, which works with small- to middle-market businesses.

Liberty Mutual is in a unique position to conduct original peer-reviewed scientific research into the causes and prevention of workplace injuries and to translate this information to help clients improve the safety of their workplace.

The Liberty Mutual Research Institute for Safety (LMRIS) conducts an annual study that ranks the economic burden of the leading causes of the most serious occupational injuries. The study combines Liberty data with information from the Bureau of Labor Statistics and from the National Academy of Social Insurance into a Workplace Safety Index to provide a comprehensive overview.

What are the results of the institute’s most recent annual study, and what do they mean for employers and for safety, health and environmental (SH&E) professionals?

While there were fewer workplace injuries in 2003 (the latest year for which data is available), the cost of these injuries is growing. In 2003, $50.8 billion was spent, which amounted to almost one billion dollars per week in direct medical treatment and wage replacement costs to employers.

According to the Index, there have been some improvements in workplace safety, including the following:

  • A slowing in the rate of growth of the cost of serious workplace injuries. This is driven by a sharp decline in the number of such accidents, which fell 6.2% in 2003—almost half of the total 13.5% decline over five years.
  • The real costs of two of the top five causes of serious workplace injuries fell sharply between 2002 and 2003:
    • The cost of Bodily Reaction injuries dropped by 4.7% thanks to an 11.6% decline in the number of these accidents.
    • The cost of Struck by Object injuries fell 3.4% because of a 12.5% decline in the number of these injuries.

3. The ranking of the top ten causes of serious injuries has been consistent over the past five years. This gives employers a clear roadmap for making the workplace safer.

But the surveys found that more work remains, including:

  • Managing the sheer financial impact of workplace injuries, which grew by almost $1 billion per year between 1998 and 2003 when adjusted for inflation.
  • Controlling the rapid inflation-adjusted growth in the costs of two of the leading injury causes between 2002 and 2003:
    • The cost of Highway Incidents grew by 12.8%, despite a 4% drop in the number of these accidents.
    • The cost of Falls on Same Level grew by 10.4%, almost one-third of its total five-year growth .

So what is the net for employers and SH&E professionals? My advice is to focus your efforts where you can make the greatest impact. Know your experience and major causes of loss. Benchmark your progress. You may have reduced the number of injuries, but how do you compare to those in the same industry and in other industries? Benchmarking helps improve safety, and it can spark a discussion with senior executives about safety’s impact safety on their bottom line. Do not forget to assess your operations for potential risks that have yet to cause actual loss and be sure to prepare for emergencies.

Liberty Mutual also conducts a Chief Financial Officer (CFO) Survey to learn how senior financial executives at large- and mid-size companies view safety. What are the results of Liberty Mutual’s most recent CFO Survey, and how can senior financial executives use these results to improve safety and health in the workplace?

The results of our most recent survey indicate that senior financial executives clearly see the value of workplace safety. In fact, over 60% of those surveyed reported that each dollar invested in injury prevention returns two dollars or more.

However, more work remains here too. The biggest need is to continue to build partnerships between risk managers, safety directors and senior financial executives. Risk managers and safety directors should continue to help senior financial executives understand the process of improving safety. This group most often mentions better training as their preferred safety intervention. But while important, training is only one part of a comprehensive plan to improve safety.

So what do our survey results mean for employers and SH&E professionals? First, they should continue to help senior executives understand the value and process of safety improvement. They should look for opportunities to demonstrate safety’s value and to show not only its impact on bottom line, but also how those net savings are achieved. Second, benchmark. Sound familiar? It is a great way to start an important conversation.

How does the Loss Prevention Department make use of both the Workplace Safety Index and CFO Survey?

While these surveys may not have direct application to individual customers by our loss prevention organization, the studies help create a dialogue and support the work of our field consultants. Our consultants conduct loss analyses, assess risk and benchmark performance with our customers as part of our service approach. The Workplace Safety Index and CFO survey provide a backdrop for this work and a perspective on an individual company’s performance relative to all industry.

Liberty Mutual Loss Prevention also uses this approach to understand and communicate the impact of the economic burden of work injuries on our customers’ business performance. By having good, reliable measures of performance at both the risk and loss levels, our consultants are in a better position to influence change in our customers’ safety management systems.

In July 2005, the American National Standards Institute (ANSI)/American Industrial Hygiene Association (AIHA) Z10 standard “Occupational Health and Safety Management Systems” received final approval. How do you and Liberty Mutual in general predict this standard will impact occupational safety and health?

The ANSI Z10 standard provides a “model” for organizing the important elements of a safety management system. As a member of the ANSI Z10 Committee, I believe it will be of great assistance to both large and small enterprises that would like to implement a safety management system since the guiding principles and processes of the Z10 standard were developed with adoption by companies of all sizes and locations in mind.

Liberty Mutual’s work with customers in implementing safety management systems is compatible with the Z10 standard. The processes outlined in the standard match Liberty Mutual’s approach to consulting with customers on improving safety. We help our customers identify causes of loss and risks, set safety goals and objectives, measure performance and implement the work systems required for successful safety management. This new standard should generate greater interest among policyholders by encouraging them to implement a safety management system or program, and it provides them with a new guidance tool to do so.

In your professional opinion, how do you believe the ANSI/AIHA Z10 standard will affect loss prevention?

Many leading organizations have successful safety management systems that are compatible with the Z10 standard. However, safety management is at a critical point in some companies. Their ongoing safety systems produce good results, but not great results. A new approach to safety management is needed to make continued strides. Liberty Mutual is working with clients on such an approach—one that takes safety management to world-class levels and builds on elements of management commitment and employee involvement along with other system elements.

Liberty Mutual is the only insurance company to own and operate an occupational safety and health research facility--the Liberty Mutual Research Institute for Safety (LMRIS). Over the past 50 years, the institute has conducted research in injuries, physical work, returning to work and slips, trips and falls. What do you believe are the institute’s most important achievements of its 50-year history, and what are the institute’s research plans for 2006?

Although the Liberty Mutual Research Institute for Safety recently celebrated its 50 th anniversary, Liberty’s commitment and contribution to safety research, innovation and field application dates to our founding in 1912. The first employee of the company was a safety engineer who evaluated the risk of worker injury for companies that applied for Workers’ Compensation insurance and helped subscribing companies provide a safe workplace for their employees. Since that time, some of our achievements have included:

  • Machine safeguarding research incorporated into ASTM and ANSI standards
  • Auto safety research with Cornell University, which led to numerous safety features in today’s automobiles
  • The first escalator emergency shut-off switch
  • The first Horizontal Pull Slip meter to measure the relative slipperiness of floor surfaces
  • Ergonomic research for manual material handling tasks that contributed to the National Institute for Occupational Safety and Health’s (NIOSH) Lifting Guidelines and hand tool stress measurement devices
  • Decision Driving and Skid Control driver education programs

Since our research program is strategic in nature with long-term projects, there are no major changes planned for 2006. Our research program will continue to focus on the relevant causes of work-related injury and disability as framed by the Workplace Safety Index and return-to-work and safety management strategies.

Recently, Dr. Y. Ian Noy was named as head of the Research Institute to replace Dr. Tom Leamon, who is retiring later this year. Dr. Noy’s 30 years of professional experience in ergonomics, human factors and motor vehicle safety will help the Research Institute advance injury prevention and successful return-to-work strategies.

You are a longstanding professional member of the American Society of Safety Engineers (ASSE). How has your experience as a society member helped you in your position as Senior Vice President of Liberty Mutual's Loss Prevention Department?

As a member for over 25 years, my association with the ASSE has served me well. As a new employee in the safety and health field fresh out of engineering school and through my years as a safety practitioner, local chapter activities, education and networking have been an important part of my professional development. More recently, my activities as a member and past Chair of the Board of Trustees of the ASSE Foundation have allowed me to give back to the society. It has been a great pleasure to be affiliated with such a great organization and to represent and service the SH&E profession.


Karl Jacobson is Senior Vice President for Loss Prevention in the Commercial Professional Services organization of the Liberty Mutual Group. Jacobson is responsible for safety and health research, product development, technical support and specialty services for the Liberty Mutual Group’s Commercial Insurance Market. He was formerly Vice President and General Manager of the Loss Prevention Department of Liberty Mutual.

Prior to General Manager, Jacobson was Managing Director, Liberty International Risk Services, where he initiated work to develop safety and health consulting operations in the United Kingdom, Canada, Ireland and Mexico. In addition to establishing businesses in these markets, he explored business opportunities in Hong Kong, Singapore, Malaysia, Indonesia, India and Australia. He provided loss prevention technical staff development, product development, market research and sales and marketing support to each of our International Risk Services subsidiaries. He also served as liaison between Liberty International’s country leaders and the Loss Prevention Department.

Jacobson has 30 years of safety and health experience with the Liberty Group and has held progressively responsible positions as Field Loss Prevention Consultant, Field Manager, Assistant Division Manager, and Assistant Vice President and Manager of Customer Service.

He is a civil engineering graduate from the University of Lowell in Massachusetts as well as a:

  • Certified Safety Professional
  • Executive Engineer of the Engineering and Safety Services Group of Insurance Services Office
  • Member of the ANSI Z10 Safety and Health Management Standard Committee
  • Past Chair of the Loss Control Committee of the Alliance of American Insurers
Professional Member and Past Chair of the Board of Trustees of the American Society of Safety Engineers (ASSE) Foundation