At the 2016 Advisen Casualty Insights Conference, a panel discussed how the role of risk managers is evolving. The panel was:
- Stephen Kempsey – Managing Director, US Casualty Practice Leader – Marsh (moderator)
- Ash Kilada – Senior Director, Treasury and Risk Management – PepsiCo Inc.
- Ray Abromitis – Director of Risk Insurance – BlueScope Steel North America Corporation
- Judy McInerny – Director, Risk Management – Corning Incorporated
- Benjamin Gibbons – Insurance Risk Manager – SAP
Question: What is one of the biggest changes you have seen since starting in risk management?
- The biggest change is the speed of activity. With email, texting, etc communications happen quickly. We have gone from expecting a response to a letter in weeks to expecting a response to an email or text within an hour.
- Business continuity is a huge issue these days. Not just your exposure to events but the impact those events have on your business operations.
- More people in senior management are seeing out risk management for advise on issues. Things are more proactive than reactive.
Question: How does risk management demonstrate it’s value to the C-suite?
- In the best risk management programs, the C-suite understands the importance of risk management and the overall impact this can have on operations. Risk management starts at the top.
- Some in the C-suite look at risk management in terms of pure dollars. What does the insurance cost, what are the losses, and how much did money did risk management activities save the company. The risk manager is constantly having to justify their value.
- The risk manager has to stay ahead of issues and bring them to the C-suite quickly when needed rather than simply being reactive to problems.
- Get on different committees within the company and interact with a variety of different areas of the company. This will not only allow the risk manager to be seen as part of the team, but will also allow the risk manager to potentially identify emerging concerns.
Question: What is an area where you feel the casualty insurance industry is not meeting your needs?
- Getting the insurance industry to fully understand the viewpoint of the employer and the challenges they face.
- Why are there so many mistakes on the insurance binders, even with renewals? As a risk manager I waste a lot of time reviewing the work product that is sent to me to find errors.
- The loss control vendors from carriers often do not fully understand the employer and the recommendations they make are at times inappropriate because of this.
- The insurance industry is slow to innovate in new areas and prefers to stick with what is known and profitable. Getting the industry to understand evolving needs is challenging.
Question: How has access to information and data changed your job?
- Companies have their own measurements of success. More information allows a risk manger to better document the money they are saving vs what they are spending.
- With bigger risk management programs, analytics are of increased importance because of the sheer volume of information you need to review. However, no analytics are a substitute for actually looking at the files and talking to the people handling the claims.
Question: What do you think of procurement departments being increasingly involved in risk management purchasing decisions?
- They can add value, but it is important that they understand purchasing insurance is different than purchasing pens and notepads.
- I don’t think they add any value. Purchasing insurance is very complicated and relationships matter. It is more than just going with the cheapest option.
- Procurement tends to just check the box. Too often they do not understand the complex issues involved in insurance purchasing.