Global approach needed for risk

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RIMS honors
contributions
to risk field
NEWS IN BRIEF
[ AT PRESS TIME ]
P/C market still stable,
Willis research finds
The property market is shifting,
particularly for catastrophic risks,
but the overall marketplace
appears to be stable and no major
hardening of pricing is apparent so
far, insurance broker Willis Group
Holdings P.L.C. said Monday in a
special report. “We caution our
clients to seize the ongoing
opportunities—outside of the
property market,” said Willis North
America President Todd Jones.
“For buyers of property cover,
especially those that face
catastrophic exposures, now is the
time to consider renewal
strategies.”
Marsh taps ex-Kroll CEO
as innovation chief
Ben Allen has been appointed to
the post of chief innovation officer
at Marsh & McLennan Cos. Inc. In
the newly created position, Mr.
Allen will partner with leadership
teams at Marsh Inc., Guy
Carpenter & Co. L.L.C., Mercer
L.L.C. and Oliver Wyman “to create
market-driven products and
See NEWS IN BRIEF page 18
RIMS
Leaders
Thought
Risk
managers
are dealing
with
increasingly
difficult
exposures
around the world, says
Janice Ochenkowski, chair
of RIMS’ international
committee. Page 10
By MATT SCROGGINS
RIMS President
Scott B. Clark
speaks during
Monday’s General
Session.
Global approach
needed for risk
By RODD ZOLKOS
With the risk management profession increasingly shaped by worldwide events, the Risk & Insurance
Management Society Inc. must focus on expanding internationally,
the organization’s president said
Monday.
Speaking at the General Session
of this year’s RIMS Annual Conference & Exhibition in Vancouver,
Scott B. Clark, risk and benefits officer for Miami-Dade County Public Schools, noted that “ripple
effects” from catastrophes and other events around the world can affect risk managers for years.
Significant world events are part
of a constantly changing landscape
confronting risk managers, he said,
though adding, “through all of this
INSIDE
turbulence RIMS remains a constant steadying force.”
The increasingly international
nature of the profession is reshaping risk management, Mr. Clark
said. “To answer that call, RIMS is
exploring how we can expand our
organization internationally,” he
said. “It is time to bring RIMS’ advantage to the rest of the world.”
Mr. Clark said that his travels
around the world with RIMS have
shown him that despite language
and cultural differences, “We can
leverage the common ground of
the fundamentals of risk management worldwide.”
An illustration of that worldwide
impact and RIMS’ global role came
as the RIMS president promoted
See PRESIDENT page 17
FIRST INDUCTEES
TO RISK MANAGEMENT
HALL OF FAME / PAGE 3
OLYMPIC MEDALIST
APOLO ANTON OHNO
ON EFFORT / PAGE 3
Entire contents copyright by Crain Communications Inc. All rights reserved.
The Risk & Insurance Management
Society Inc. on Monday presented
its highest honor, the Harry and
Dorothy Goodell Award, to Glen
Frederick, director of risk management client services for the Government of British Columbia.
The Goodell Award is named for
RIMS’ first president and is awarded annually to an individual who
has advanced risk management as
a discipline and has furthered the
goals of RIMS.
RIMS presented the award to Mr.
Frederick before a packed house at
Monday's General Session in Vancouver.
RIMS presented several other
awards during Monday’s awards
luncheon, including the Richard W.
Bland Memorial Award, which was
given to Wayne Salen, who is director of risk management for Labor
See AWARDS page 17
Glen Frederick is the 2011 Goodell
Award recipient.
MOST FIRMS DON’T BUY
COVERAGE FOR CYBER
RISKS / PAGE 6
May 3, 2011 | 1
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OFFICIAL SHOW DAILY NEWS | BUSINESS INSURANCE
Risk Management Hall of Fame
inducts first five members
By MIKE TSIKOUDAKIS
tweets
FROMRIMS
rceniceros Roberto Ceniceros
At #RIMS2011 hearing increased use of
Oxycontin for work comp injuries could
lead to distracted driving claims. Still just a
theory.
NLPeLearning New Level Partners
Just hugged a Mounty at #RIMS2011!
BusInsMHofmann Mark Hofmann
Interview with FM Global’s Ruud Bosman at
#RIMS2011: Property market “is stabilizing
and my suspicion is it will start to creep up.”
wcanalysisgroup Mark Walls
#rims2011. Walking around expo hall is a
workout. The room is huge!!I have met
several from the @wcanalysisgroup
ApoloOhno Apolo Anton Ohno
Thank you Vancouver! #Rims2011
#ZeroRegret
JOIN THE CONVERSATION at RIMS
on Twitter. Tag your tweets
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The inaugural class of the Risk
Management Hall of Fame was
introduced Monday at the Risk
& Insurance Management Society Inc.’s Annual Conference &
Exhibition in Vancouver.
The first inductees are Douglas Barlow, Donald Barrett, Eldrich Carr, Cheri Hawkins and
John Pinner (see box, page 14).
The Risk Management Hall
of Fame, co-founded by RIMS
and Chartis Inc., American International Group Inc.’s property/casualty unit, aims to
recognize individuals who have
made significant contributions
to the history and tradition of
risk management, RIMS and
Chartis said in a statement.
“We’re doing it to recognize
those that, over their careers
and longevity in risk management, have added to the discipline and the professionalism,”
said Mary Roth, executive
director of New York-based
RIMS.
“The idea was to find a way
to honor those that have left
their mark on the risk management community and furthered the profession in a way
that had an impact on the in-
The first inductees to the Risk Management Hall of Fame were
honored Monday at the General Session.
dustry more broadly than just
at their own company,” said
John Doyle, CEO of global
commercial lines at New Yorkbased Chartis.
While other awards honor
people in the field of risk management, the Risk Management
Hall of Fame honors career
achievements, Ms. Roth said.
“One of the criteria is having
been retired for three years and
recognizing them over their career and what they have done
for risk management and the
discipline,” Ms. Roth said.
The idea, hatched last year,
resulted from discussions between RIMS and Chartis representatives about how to better
recognize those who have contributed to and shaped the history and tradition of risk
management, Ms. Roth said.
“As both RIMS and Chartis
discussed it and the idea took
shape and everyone got excited
about it, we decided the RIMS
conference would be the forum
to roll it out and to honor
some specific individuals,” Mr.
Doyle said.
See HALL page 14
Olympic medalist Ohno urges RIMS attendees to go for the gold
By MIKE TSIKOUDAKIS
Individuals who always strive for
more can ultimately reach a point
of zero regret, said eight-time U.S.
Winter Olympic medalist Apolo
Anton Ohno at the Risk & Insurance Management Society Inc.’s
annual conference.
Mr. Ohno, who also won first
place on the fourth season of the
television show “Dancing With the
Stars,” struggled in his youth to
stay focused and out of trouble, he
said Monday during his keynote
address at the General Session,
where thousands of risk managers
and insurance professionals gathered to kick off the conference in
Mr. Ohno
Vancouver.
His father instilled in him that
Olympic athletes make up a
minute percentage of the population—a gift and opportunity that
should not be thrown away, said
Mr. Ohno.
He went on to win six Winter
Olympic Games short-track speed
skating medals in 2002 and 2006
for the United States.
In deciding whether to compete in the 2010 Olympics in
Vancouver, Mr. Ohno said he was
acutely aware of the risks he
would confront as a veteran
competing against a group of
younger athletes.
After four years of training, one
slip or mistake during the 42 second race could end it all, he said.
“As an athlete, how do you minimize the risk?”
He decided to look at the opportunity from the perspective of giving his all in order to have zero
regret.
“I wanted to become completely
absorbed and obsessed with the
sport,” he said. “Life, business,
sports, all come from the mental
psyche,” Mr. Ohno told the General Session audience.
People, he said, must constantly
evolve and closely examine their
exposures and “minimize the risk
of failure.”
Mr. Ohno won three Olympic
medals during the 2010 Winter
Olympic Games in Vancouver.
May 3, 2011 | 3
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OFFICIAL SHOW DAILY NEWS | BUSINESS INSURANCE
Self-insurance
not for all firms,
experts caution
By JOANNE WOJCIK
Greisiger, president of Gladwyne, Pa.-based NetDilligence, which provides cyber risk management and information security services.
Several factors contribute to the problem, he
said. Companies collect more data than
they need, often for marketing purposes, he said. Data is stored too
long and most websites are very
porous, Mr. Greisiger noted.
And “the bad guys rely on
human error,” he said.
For example, “nasty software” can be loaded into a system when somebody plugs what
appears to be a lost electronic
notepad or even a fob on a keychain into a system, said Robert A.
Parisi Jr., senior vp at Marsh USA Inc., in
New York. Education is a big problem he said.
Risk managers have to try to stay vigilant,
said Mr. Greisiger.
In a display shown behind him as he spoke,
Mr. Parisi outlined best practices for dealing
with the exposure.
While self-insurance can save some organizations money and give them better control
over claims handling, it may not be the best
option for “nervous Nellies”—organizations
that are uncomfortable with volatility, two
self-insurance experts say.
“I believe in Murphy’s Law when it comes
to self-insurance: Anything that can go
wrong will go wrong at the worst possible
moment, which is usually at the beginning
of a self-insurance program,” said Victor
Nolan, risk and benefits manager at Clean
Water Services in Hillsboro, Ore., during a
session on self-insurance at this year’s RIMS
conference in Vancouver.
“Self-insurance is not for everyone, if large
single losses could leave you devastated financially,” said Mr. Nolan. “Or maybe instead of going fully self-insured, go with a
retention program until you get comfortable
with it.”
For example, an organization can gradually move into self-insurance by raising deductibles or self-insured retentions or
through participating in pooling arrangements or captive programs with other organizations that have similar risk tolerance
levels, according to Scott Moss, property casualty trust director with City County Insurance Services in Salem, Ore.
To address the prospect of a potentially
devastating loss, in some cases, organizations
can cap their liabilities through the use of
stop-loss programs that pay sums above a
specified threshold, or retrospective programs, Mr. Moss said.
Though retro programs do require an additional payment if losses exceed projected
amounts, they also have the potential of
paying rebates when claims fall below expected levels, he suggested.
Before deciding whether to self-insure, organizations should perform feasibility studies that take into account at least three years’
prior and projected claims experience, the
amount of working capital available to fund
reserves and local regulations governing selfinsurance. The study should also take into
account whether the organization has sufficient resources to handle claims internally,
or the cost of outsourcing that function to a
third-party administrator, according to Mr.
Nolan.
Organizations considering self-insurance
should also prepare a “loss triangle,” a table
of loss experience showing total losses over a
See CYBER page 14
See SELF page 14
OPEN FOR BUSINESS: RIMS attendees flocked to the exhibit hall Monday
morning after the General Session ended.
Cyber risks a critical threat
for virtually all companies
By MARK A. HOFMANN
Any commercial entity that has a computer network and maintains confidential information is
exposed to cyber risk.
Fortunately, there are steps that
risk managers can take to reduce
their exposure to this risk, according to a panel of experts at a
standing room only discussion
of the issue at the Risk & Insurance Management Society
Inc.’s annual conference in
Vancouver Monday.
“Many security breaches are
due to old-fashioned human error,”
said Richard Billson, vp-proposition
development for Zurich Insurance in New
York. Regardless of the economic sector in
which they’re employed, risk managers are on
the front line of defense against this peril, he
said.
Top perils include hacking, laptop loss with
client data, backup tape loss, staff mistakes like
data leaks, denial of service attacks and business
partner mishaps and breaches, said Mark
4 | May 3, 2011
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OFFICIAL SHOW DAILY NEWS | BUSINESS INSURANCE
Most firms aren’t buying
cyber risk cover: Survey
By RODD ZOLKOS
Despite recent accounts of significant cyber attacks and corporate
data breaches, a new survey of risk
managers by Towers Watson & Co.
shows that 73% of companies surveyed have not purchased network
liability coverage.
“That’s alarming to me,” said
Larry Racioppo, head of Towers
Watson’s executive liability practice in Stamford, Conn.
Of the companies without coverage, 37% said they believed their
internal information technology
departments and controls were adequate to address their cyber risk
exposures. “The best controls can’t
prevent a lost laptop,” said Mr.
Racioppo, adding that the findings
suggest that brokers and consultants need to continue educating
clients about the nature and extent
of cyber risk exposures.
RISK STRATEGIES
“The whole cyber risk area goes
well beyond the data component,”
he said, noting that companies facing system breaches often face state
or federal regulatory requirements,
forensic issues and risks to their
brands.
“That’s really where the (insurance) policies, I think, can be of significant assistance,” Mr. Racioppo
said. “A lot of firms don’t have the
resources internally to deal with it.”
The survey also showed that of
those companies without cyber liability coverage, 15% reported that
the cost of risk transfer was prohibitive or that they weren’t overly
concerned about the risk.
“Fundamentally, the overall
(property/casualty) market is very
competitive,” Mr. Racioppo said.
“You could argue that given the
overall catastrophic nature of this
event, this is a perfect time to be in
the market.”
54%
have enterprise risk management capabilities
43%
have a formal process for
determining and communicating risk appetite, tolerance
and/or limits
73%
have not purchased network
liability coverage
91%
don’t or have only slightly
considered recent disasters’
impact on risk modeling and
business continuity programs
30%
don’t use statistical models
to evaluate risk control or
claim management strategies
Source: Towers Watson risk
manager survey
Of companies that have purchased network liability coverage,
61% bought $10 million to $49.9
million in limits, with only 8% of
those surveyed reporting purchasing $50 million or more. The median was $10 million in limits,
according to Towers Watson.
The survey showed 54% of those
surveyed reporting that their company had enterprise risk management capabilities. But the survey
also found that only 43% of respondents have a formal process
for determining and communicating risk appetite, risk tolerance
and/or risk limits, and 91% haven’t
or have only slightly considered
the impact of recent high-profile
disasters on their risk modeling or
business continuity programs.
Many companies are looking at
ERM only from a compliance perspective, “rather than what are the
big risks facing the organization,”
said Corey Gooch, senior ERM consultant in Towers Watson’s corporate risk management practice.
“Fewer than half of those (companies with ERM capabilities) say
they’re doing anything quantitatively,” said Barry Franklin, director
in Towers Watson’s corporate risk
management practice in Chicago.
The Web-based survey of 164 risk
managers was conducted between
March 22 and April 1. More than
half of respondents have annual
revenue of at least $1 billion.
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6 | May 3, 2011
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OFFICIAL SHOW DAILY NEWS | BUSINESS INSURANCE
heardONTHEstreet
Q: What is your department’s
biggest concern for 2011?
TODO
[ CONFERENCE HIGHLIGHTS ]
Glenn Peterson
SENIOR VP, RISK MANAGEMENT
CONTRAN CORP.
DALLAS
My biggest concern for 2011 would be being in compliance with global
admitted insurance laws in various countries where we operate, and
making sure that we are in full legal compliance and we’ve paid all the
appropriate taxes.
Tuesday
Sessions
9 a.m.-10:30 a.m.
Workshops
9 a.m.-11:30 a.m.
Sessions
10:45 a.m.-12:15 p.m.
Will Puczylowski
SENIOR ACCOUNT EXECUTIVE
CREATIVE RISK MANAGEMENT INC.
NYACK, N.Y.
Biggest challenge is maintaining stability in this market, because there are
so many factors that can upset it that are not upsetting it at the moment,
and there are so many things that could upset it. So with the economy the
way it has been, it’s tough to control expenses, and maintaining and
keeping the pricing of the insurance we do buy stable is a main concern.
Lunch & Learn
12:30 p.m.-2 p.m.
Sessions
2:15 p.m.-3:45 p.m.
Exhibit Hall Dessert
Reception
3:45 p.m.-5:00 p.m.
Sheila Small
ASSISTANT TREASURER OF RISK MANAGEMENT
VERIZON COMMUNICATIONS INC.
BASKING RIDGE, N.J.
I have two challenges that we face: One of them is the growing patent
litigation that we’re experiencing in the electronic world—the delivery of
television and cell phone service and all the patents that go along with
those types of electronics. The other is the growing risk of cyber liability.
Jennifer Wampler
DIRECTOR, RISK MANAGEMENT
NETAPP
SUNNYVALE, CALIF.
It’s on the international side and trying to coordinate the growth
internationally and make sure that we have coverage everywhere we
need to, and dealing with the complexities of overseas operations.
8 | May 3, 2011
Exhibit Hall
Hours
10 a.m.–5 p.m.
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In 1986, 68 of the world’s
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Today, as we celebrate
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OFFICIAL SHOW DAILY NEWS | BUSINESS INSURANCE
HOMETEAM
RIMS
Leaders
Thought
Janice Ochenkowski is chair of the Risk & Insurance Management
Society Inc.’s international committee and managing director at
Jones Lang LaSalle Inc. in Chicago. In a recent discussion with
Business Insurance Associate Editor Jeff Casale, Ms. Ochenkowski
described some of the main global risks that risk managers face today and what risk professionals can do to help their organizations
confront those exposures.
A complex world of risks
Q: What are the biggest global
risks today?
T
here are several major risks
facing risk managers, including natural catastrophes and the
difficulty of properly insuring
them in a consistent and cost-effective manner; corporations expanding into new territories and
understanding those risks; growing political risks and understanding various cultures and
business practices; and communication, not only language, but
cultural practices, which when
not clear can impede effective
communication.
Understanding culture and the
manner in which risks are assumed and transferred is important for risk managers. In China,
for example, it may not be typical for contractors and subcontractors
to
purchase
any
insurance, so mandating insurance makes your business noncompetitive in the marketplace.
So it’s a delicate balance that
they have to work with, and they
need to consult with brokers, insurance contractors as well as
work internally to tackle each of
those problems.
Political risks are adding an entirely new dimension to risk
management. The risk manager
has to help the human resources
group in establishing programs
and processes that are going to
protect the people—both the ex-
10 | May 3, 2011
pats and the locals working in
country—and how political risk
is going to be handled. Plants
and operations have to have
plans and procedures to be adequate enough to address those
situations. You also have to address different cultural issues,
and that is something that risk
managers have to be aware of
and work with senior management to address.
Q: How much impact have recent
catastrophes had on global risk
issues such as supply chain management or other business operations, and how has this affected
risk managers and their role?
O
bviously, recent catastrophes such as the floods in
Australia and the earthquakes in
New Zealand and Japan have
caused significant physical damage to property, including plants
and warehouses. Additionally,
shipping has halted following
the tsunami and nuclear situation in Japan, disrupting the ability to move goods throughout
the world. Risk managers have
had their business continuity
plans tested and are challenged
to assist their organizations in
continuing operations.
In a stable environment, business continuity plans are created
and put in the bottom drawer in
a desk and often not used. Recently, though, we have been
able to use those plans; and those
risk managers that manage the
adversity effectively have provided themselves with an opportunity to raise their profile within
their organizations and show
their contributions to the business’ bottom line.
Q: Are there any new or emerging
global risks that risk managers
need to be aware of, and why?
A
side from natural catastrophes and political unrest in
the Middle East, cyber risk is an
area where corporations and
public entities with an increasing
reliance on the Internet for communications need to be aware of
their vulnerability to cyber
crimes. There is an increasing
amount of regulations on employee data privacy, which increases the need to have an
effective (information technology) program to manage cyber risk
and to ensure that data is appropriately protected.
There also needs to be increasing awareness of the green movement and being more aware of
the environment and an organization’s impact on an environment. Companies need to be
more sensitive to their impact on
the environment and risk managers can assist with this by implementing appropriate insurance
programs and internal practices
and procedures.
[ LOCAL RIMS VIEWS ]
n the age of tweets and texts,
Keith Gibson, primary deputy of
the British Columbia chapter of the
Risk & Insurance Management
Society Inc. and risk manager of
the Municipal Insurance Assn. of
British Columbia, finds that the
electronic age can stand in the way
of effective problem-solving in risk
management.
With a membership base
spanning industries such as
research and development, mining
and tourism, British Columbia RIMS
chapter meetings can enlighten
risk managers about new risks and
solutions. However, Mr. Gibson said
that with such a diverse group, it
often is challenging to find
speakers who will appeal to all
attendees.
Professionally, Mr. Gibson said
he believes face-to-face interaction
allows risk
managers to
play out
scenarios and
challenge
each other’s
ideas in a way
that can’t be
replicated.
“When
sending an
if
Keith Gibson email,
someone
Primary deputy of the
British Columbia chapter asks you a
question and
of the Risk & Insurance
Management Society Inc. you answer
that question,
and risk manager of the
Municipal Insurance Assn. it doesn’t
of British Columbia
open up a
dialogue,” Mr.
Gibson said. “In my mind, the
biggest challenge is getting a
dialogue going.”
Mr. Gibson said meeting with
other risk managers is crucial to
both his professional and teaching
roles.
As an instructor of three risk
management courses at Simon
Fraser University in Vancouver
since 1992, Mr. Gibson chooses to
attend educational sessions
outside his area of professional
expertise to stay on top of current
risk management issues.
“Because I’m only involved in the
area of liability risk management,
I’m looking for tools in other areas
of risk management that I can bring
to the classroom and share with my
students,” Mr. Gibson said.
—Mallory Gillikin
I
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OFFICIAL SHOW DAILY NEWS | BUSINESS INSURANCE
&
Questions
Answers
Tamara E. Russell is a partner with law firm Barran Liebman
L.L.P. in Portland, Ore., and represents management and employers in employment law matters. In a recent discussion with
Business Insurance Associate Editor Mike Tsikoudakis, Ms. Russell talked about the emergence and importance of social media
risks, issues they cause and how risk managers can manage the
exposures.
Managing social media risks
Q: How has social media changed the
landscape of risk for an organization?
I
t’s significant in the sense that it has increased an
employer’s potential for liability, just in terms of
what employees do, what they could do and what
an employer has in terms of an obligation to monitor. But it’s also scary in the sense that employment
laws are not keeping pace with social media technology, or even how to address employee use of social media.
Q: What are some specific risks that
risk managers need to be aware of
when it comes to social media?
T
he key thing to think about is whether an employee’s conduct in cyberspace impacts something that’s going on in the workplace.
Employers have an obligation to make sure that
employees aren’t posting things on the Internet
that create a hostile work environment for people in
the actual workplace.
The other risks would be if you had an employee
who decides to publish something that is confidential or proprietary. Employers have to be very aware
of that risk because if they learn something confidential or proprietary has been posted on the Internet and they don’t act quickly on it, then they have
a real problem in terms of being able to enforce
their rights to preserve the confidential and proprietary nature of that information.
Q: What steps can risk managers take
to hedge and manage social media
risks?
H
ave a good policy in place that addresses employee use of social media. Even though that
seems very simple, it’s amazing how many employees sometimes check common sense at the door
when it comes to Internet postings.
We have to educate employees, we have to educate management about the risks of social media,
and then also think about teaching people in terms
of training about the rewards of social media.
Policies can’t be so restrictive. They have to address both the pros and the cons of social media
use.
Salmon House on the Hill is a
local favorite for seafood.
DININGOUT
Members of the Vancouver
risk management and
insurance community
share their favorite local
restaurants.
Gloria
Gao
POSITION: Risk analyst,
Spectra Energy Corp.;
program officer, British
Columbia RIMS Chapter
RECOMMENDS: Miko Sushi, Il
Giardino, Les Faux
Bourgeois Bistro
Darlene
Stevenson
THESIGHTS
[ GRANVILLE ISLAND ]
POSITION: Vp, operations
manager, Willis Canada
n this “island in the middle of the city,” visitors can browse the public market for fresh
seafood, produce and home-baked goods, visit
quaint art galleries, and catch a matinee performance at a local theatre company.
I
RECOMMENDS: “Miku
Restaurant is very close to
the convention center. For
fine dining in the
mountains, try Salmon
House on the Hill.”
TOURISM VANCOUVER
12 | May 3, 2011
TOURISM VANCOUVER/
SALMON HOUSE ON THE HILL
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CONGRATULATIONS
2011 Risk Manager of the Year
Lisa Havens
Scott & White Healthcare
2011 Risk Management Honor Roll
Françoise Carli, Sanofi-Aventis Groupe
Daniel Desjardins, Bombardier Inc.
Michael Lusk, Archer Daniels Midland Company
Laurie Solomon, The Coca-Cola Company
Presented by:
11bi0162R.pdf
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Hall: First
honorees
Continued from page 3
Individuals can nominate
themselves or be nominated for
the honor, which then is vetted
by a selection committee, Ms.
Roth said. The number of annual inductees may vary.
The selection committee
comprises the RIMS’ president
and executive director, two
Chartis executives, one former
RIMS president, one member of
the Spencer Educational Foundation Inc. board of directors
and one risk manager with at
least 10 years of experience in
the field, Ms. Roth said.
Criteria for the award include: significant contributions
and achievements in the field,
innovation and trend-setting,
demonstrated leadership, char-
‘It’s a very broad award
that will take us hopefully
into the future.’
Mary Roth, Risk & Insurance
Management Society Inc.
acter and service, and the highest caliber of ethical and
professional conduct, according
to the statement.
This award is not specific to
risk managers who handle insurance, strategic risks or enterprisewide risks, Ms. Roth said.
“It’s a very broad award that
will take us hopefully into the
future,” she said. “As risk management evolves, the individuals that are changing and
shaping the industry could potentially, down the road, be eligible.”
Ms. Roth said the information on the nomination and selection process for the Risk
Management Hall of Fame will
be available on RIMS’ website at
www.rims.org.
Regarding this year’s inductees, “It’s an exciting
group,” Ms. Roth said.
“They are particularly distinguished, and I think it helps set
the bar for what this honor
should stand for as we move
forward,” Mr. Doyle said.
14 | May 3, 2011
FIRST INDUCTEES
Inaugural Risk Management Hall of
Fame honorees
DOUGLAS BARLOW:
Mr. Barlow created
the first global insurance and risk management program at
Toronto-based
Massey- Ferguson
Ltd. and is credited
with devising the idea
that an organization’s total cost of risk
extends far beyond insurance premiums
and includes factors such as its investment
in loss prevention, unreimbursed loss
expenses and administration expenses.
DONALD BARRETT: Mr.
Barrett was former
manager of corporate
affairs and risk management for Newfoundland and
Labrador Hydro
Group of Cos. in St.
John’s, Newfoundland, and a founding member of the Newfoundland and Labrador RIMS Chapter. In
1985, he became the first Newfoundlander
to receive the Canadian Risk Management
designation.
ELDRICH CARR:
Former manager of
global risk management for The
Goodyear Tire & Rubber Co. in Akron,
Ohio, Mr. Carr was an
early user of the
Internet for underwriting submissions as well as a proponent
of reducing insurance-related administrative and transactional costs.
CHERI HAWKINS: For-
mer assistant treasurer and director of
insurance for Weyerhaeuser Co. in Tacoma, Wash., Ms.
Hawkins became the
first female president
of RIMS in 1990.
JOHN PINNER: Mr.
Pinner was former
assistant treasurer of
Mattel Inc. in El
Segundo, Calif., and
spent 42 years with
the toy company creating and shaping its
risk management
function, including formation of Mattel’s
captive insurance company in Bermuda.
Cyber: Most firms face risk
Continued from page 4
For example, placing coverage is
the last step in the process, he said.
“Insurance is never a valid alternative to good risk management,”
said Mr. Parisi.
He also said that relying on technology itself as a kind of “silver
bullet” that will defend against all
risks “is to turn a blind eye to major risks facing every commercial
entity.”
The best approach to cyber and
privacy risk combines elements of
assessment, remediation, prevention, education and risk transfer,
said Mr. Parisi. He noted that there
are about 25 to 30 markets for
those risks right now.
“Our most critical asset is our
reputation,” said Victoria Telford,
director-global insurance and risk
management for Hanesbrands Inc.
in Winston-Salem, N.C. Insurance
won’t restore reputation, she said.
Loss control is critical, she said.
But finding a champion—either
one’s boss or someone in the infor-
mation technology department—is
key as well in making the case for
greater cyber security. She said that
chief financial officers are “very
data-driven” and providing detailed information about cyber attacks is essential.
Ms. Telford said a company
should have an IT loss prevention
and business continuity plan in
place and test IT policies frequently. In addition, she said to review
all contracts with anyone touching
Internet sites, credit card processing and the like to check for cyber
coverage or to require it.
Mr. Billson asked each panelist
to offer one brief bit of advice for
risk managers.
Mr. Greisiger said to talk to the
IT staff and ask if the company’s
current posture is reasonable.
Ms. Telford said to get to know
the legal department “very, very
well” and to build relationships
with the IT people.
“You have to assume you’re going to have an event,” said Mr.
Parisi.
Self: Analysis necessary
Continued from page 4
period of time reflecting the
change in amounts as claims mature, Mr. Moss said.
Mr. Moss suggested that risk
managers unfamiliar with this type
of statistical analysis enroll in a
community college class to get a
better understanding so they can
perform the study themselves.
“You can do this; there is no reason you have to pay an actuary,”
he said.
Otherwise, organizations can expect to pay anywhere from $10,000
to $50,000 to hire a consultant to
perform a self-insurance feasibility
study. The more complicated the
self-insurance solution being considered, the more it will cost, according to Mr. Moss.
Organizations should also consider a “worst case scenario,” but
“don’t dwell on it,” Mr. Nolan advised.
For example, to determine the
worst case scenario for a benefits
program, take the number of lives
and multiply that by the maxi-
mum payable benefits for the year.
“It may be a high number, but it
gives you the maximum probable
loss,” Mr. Nolan said, adding that,
in his experience, when he presented that scenario to a chief financial
officer, that made him feel more
comfortable with the self-insurance
concept.
Organizations looking to self-insure also should consider tax issues,
because in most cases they will lose
the tax deduction for premium payments. However, they can still
deduct the cost of claims paid on income taxes, according to Mr. Moss.
After becoming self-insured, organizations should evaluate their
programs regularly to make sure
they are still the best solution, according to Mr. Nolan.
Mr. Moss said organizations
should save “at least 15%” over the
cost of commercial insurance to
make self-insurance feasible
“There’s no shame in going back
to fully insured; it’s just a risk financing tool. Use what makes
sense for your organization at the
appropriate time,” Mr. Nolan said.
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OFFICIAL SHOW DAILY NEWS | BUSINESS INSURANCE
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May 3, 2011 | 15
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RIMSthrough
theLENS
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President: Global
expansion plans
Continued from page 1
the RIMS for Japan bracelets on sale at this
year’s conference to raise funds for Japanese
earthquake and tsunami recovery efforts. Thus
far the society and local RIMS chapters have
raised $20,000 for the effort, Mr. Clark said.
Mr. Clark introduced Yoshi Hamaji, executive director of the RIMS Japan Chapter, who
showed his appreciation for the society’s support in both words and with a bow to the audience. “It goes without saying the Japanese
economy has suffered greatly, and with harmful rumors of radiation it stands to reason that
tough times are ahead,” Mr. Hamaji said.
Closer to home, Mr. Clark encouraged risk
managers to pursue enterprise risk management at their organizations.
“This discipline is no longer only about
identifying and transferring risk,” he said, noting that many of the world’s largest businesses
have come to recognize that elevating the role
of risk management in the organization helps
them make better strategic decisions, improves
their business and reduces cost.
“This is where RIMS fits in,” Mr. Clark said.
“We must lead the charge. And this begins
with a standardized definition of strategic risk
management.”
The society’s president highlighted some of
the group’s recent efforts on the legislative and
regulatory front, citing RIMS’ involvement in
such areas as the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Federal
Insurance Office and pushing for reauthorization of the federal terrorism insurance backstop
program before it expires in 2014.
He encouraged RIMS members to participate in this year’s RIMS on the Hill event in
Washington, to be held June 12-14, and discussed the organization’s formation of its RISK
PAC political action committee. “We felt the
time was right to take our advocacy efforts to
the next level,” Mr. Clark said.
Mary Roth, New York-based RIMS’ executive director, discussed growth in the society’s
membership, noting that 72% of RIMS chapters experienced growth last year, with 25% reporting growth of more than 10%.
The organization also has begun to see expansion in the sorts of professionals joining
the society. “With the changing nature of risk
we have seen a growing group of nontraditional risk professionals,” Ms. Roth said, with
new members coming from areas of their companies such as technology, security and internal audit.
Awards: Honoring
risk professionals
Continued from page 1
Finders International. The award recognizes efforts in the areas of legislation and regulation.
In addition, the Ron Judd Heart of RIMS Award
was presented to Janice McGraw, associate director of risk management and insurance for McGill
University and a member of the Quebec Chapter
of RIMS. The award, which was established in
tribute to the legacy of former RIMS Executive Director Ron Judd, recognizes achievements in furthering risk management at the chapter level.
The Arthur Quern Quality Award, which honors innovations in risk management, was given
to Steve Willis, head of insurance for International Power of London.
RIMS gave the Cristy Award to Dylan P. Lauzon, risk analyst for Big 5 Corp. The award recognizes the individual who scored the highest
on the three exams required to earn the Associate of Risk Management designation.
Also at the luncheon, RIMS and Business Insurance presented the 2011 Risk Manager of the
Year Award to Lisa L. Havens, director of risk
management and associate general counsel for
Scott & White Healthcare.
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May 3, 2011 | 17
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Business Insurance
NEWS IN BRIEF
[ AT PRESS TIME ]
Publisher/General Manager,
Strategic Business Media:
Mark Stach (Chicago)
CONTINUED FROM PAGE 1
Associate Publisher/
Online General Manager/Event Director:
Paul D. Winston (Chicago)
solutions,” MMC said in a
statement. Mr. Allen previously
was president and CEO of Kroll
Inc., a MMC unit until its sale last
year to Altegrity Inc.
Greenlight Re president
to succeed retiring CEO
Greenlight Capital Re Ltd. said
Monday that CEO Len Goldberg
will retire Aug. 15 and be
succeeded by Bart Hedges, the
reinsurer’s president and chief
underwriting officer. Mr. Goldberg
has been CEO and a director at
Greenlight Re since it launched in
2005 and will remain an active
member on the board. Mr. Hedges,
who joined Greenlight Re in
January 2006 as president and
chief underwriting officer, has 25
years of experience in the
property/casualty insurance and
reinsurance industry.
Mo. governor vetoes
bill curbing work suits
Missouri Gov. Jay Nixon has
vetoed legislation that would have
made it more difficult for plaintiffs
to successfully pursue
employment discrimination
litigation in the state. Among
other provisions, S.B. 188 would
have changed the standard to
the alleged discriminatory action
being a motivating factor in
employment discrimination, rather
than a contributing.
2011RIMSvideo
For more on the conference,
check out Business Insurance’s
daily RIMS 2011 videos at
aroundthe
EXHIBITORS AT RIMS
offered various activities
and attractions at their
booths Monday to lure RIMS
attendees. Clockwise from
top are: FirstOnSite, DRI
International, BELFOR and
MedRisk Inc.
HALL
Editor: Gavin Souter (Chicago)
Editor-at-Large: Jerry Geisel (Washington)
Managing Editor: Matt Scroggins (Chicago)
Assistant Managing Editor - Multimedia:
Kathy L. Barnes (Chicago)
Art Editor: William Murphy (Chicago)
Special Projects Editor: Rodd Zolkos (Chicago)
Senior Editors: Michael Bradford (Dallas);
Roberto Ceniceros (Boise);
Judy Greenwald (San Jose);
Mark A. Hofmann (Washington);
Sarah Veysey (London); Joanne Wojcik (Denver)
Associate Editors:
Jeff Casale (Chicago); Matt Dunning (New York); Sonja Ryst
(New York); Mike Tsikoudakis (Chicago)
Copy Editors: Charmain Benton (Chicago);
Ann Reus (Chicago)
Editorial Assistant: Mallory Gillikin (Chicago)
Research Director: Kevin P. Edison (Chicago)
Research Editor: Karen Brown Tucker (Chicago)
Online Editor: Katherine Downing (Chicago)
Online Producer: Amy R. Curtis (Olathe)
Editorial Cartoonist: Roger Schillerstrom (Chicago)
Advertising Sales Director:
Susan Stilwill (Chicago)
Regional Sales Managers:
Ron Kolgraf (Boston); Robert B. Murray
(New York); Mary Pemberton (Denver)
Classified Advertising Manager:
Monique Murray (New York)
Production Manager: J. Thomas Janka (Chicago)
Assistant to the Publisher:
Justine Karl (Chicago)
Marketing Director:
Diane Lillie (Chicago)
Audience Marketing Director:
Michelle O’Malley (Chicago)
Events Manager: Rebecca Briggs (New York)
Digital Product Manager:
Christina Kneitz (Chicago)
EDITORIAL: Boise: 208-286-1425;
Chicago: 312-649-5200; Dallas: 972-691-7960;
Denver: 303-278-7444; London: 44-207-457-1400; New
York: 212-210-0100; San Jose: 408-774-1500;
Washington: 202-662-7200
ADVERTISING: Boston: 617-292-4856;
Chicago: 312-649-5224; Denver 303-898-4043;
New York: 212-210-0136
SUBSCRIPTIONS: Detroit: 888-446-1422
Business Insurance is published by
Crain Communications Inc.
Chairman: Keith E. Crain
President: Rance Crain
Secretary: Merrilee Crain
Treasurer: Mary Kay Crain
Executive Vice President/Operations:
William A. Morrow
Senior Vice President: Gloria Scoby
Vice President/Group Publisher: Christopher Crain
Group Vice President/Technology, Circulation,
Manufacturing: Robert C. Adams
Vice President/Production & Manufacturing:
Dave Kamis
Corporate Circulation/
Audience Development Director: Kathy Henry
Chief Information Officer: Paul Dalpiaz
G.D. Crain Jr. Founder (1885-1973)
Mrs. G.D. Crain Jr. Chairman (1911-1996)
S.R. Bernstein
Chairman-executive committee (1907-1993)
www.businessinsurance.com/video
PHOTOS BY MICHAEL MARCOTTE
18 | May 3, 2011
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challenges. Alterra is a market-leading, global enterprise ready to offer you a wide range of reliable
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