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Q&A: Eamonn Cunningham, chief risk officer of Westfield Group

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Q&A: Eamonn Cunningham, chief risk officer of Westfield Group

Eamonn Cunningham is chief risk officer of Westfield Group, a Sydney-based shopping center owner and operator that has malls in Australia, New Zealand, the United States and Europe. He also is president of Risk & Insurance Management Society Inc.'s Australasia chapter, which was formed this year. Mr. Cunningham recently spoke with Gavin Souter, editor of Business Insurance, about the reason for forming the chapter and the outlook for the market. Edited excerpts follow.

Q: What was the impetus behind founding the Australasian chapter of RIMS?

A: Going back six or seven months, one particular group of risk managers, largely representing large corporations, formed a view that we probably needed to align ourselves with an organization that could truly assist us in meeting the day-to-day challenges we face as risk managers and, at the same time, look for something that we believe could assist the risk management profession going forward.

Q: What do you think RIMS will bring to the table?

A: Some of us had at least some knowledge of RIMS. I've been a member of RIMS through the Los Angeles chapter because I have a risk management function in Los Angeles. When we looked at it, we had a sense that by effectively teaming with RIMS ... we would open ourselves as a group of interested risk management practitioners to really mature functionally with an interactive resource that would help the ongoing development of the risk management profession in Australia and New Zealand. In doing so, it would help each one of us to tap into a greater knowledge base that would assist us in the discharge of our day-to-day responsibilities.

Q: What are some key issues facing risk managers in Australasia?

A: Given the economic head winds that all countries have faced in recent times, and probably Australia particularly in more recent times, corporations, maybe quite appropriately, are looking at risk management and what it delivers to them as a corporation. So to some extent, risk managers are being called to account and have to be able to demonstrate that the investment in risk management is paying appropriate dividends. Of course, the challenge there is that the dividend may be delivered over a period of years rather than one single year and, therefore, it's a little bit more challenging to quantify.

The other issue is the fact that more and more people are looking at governance, risk and compliance and saying where does risk and risk management as a profession play a role. Of course, you have aligned to that the whole internal audit profession. So to some extent, people are saying quite rightly, “Where is all of this going and what impact will it have on risk management as a profession?” I'm one of these people that believes that risk management should be at the forefront in all of this in that if you are only performing as a risk management professional for compliance reasons, well those reasons, while they may be really important, are really wafer thin in terms of value add to enterprises and, therefore, what risk managers need to show and demonstrate is that they are at the forefront of this question.

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Q: I know you have global exposures, but specifically for Australian risks, what is the general market outlook?

A: There are interesting times going on in the marketplace, which is a function of a period where there have not been significant natural catastrophes at a level that would be a market-changing event. You are seeing some interesting people moves among large underwriters. You are seeing people who have capital to deploy entering into the direct and reinsurance markets, putting downward pressure generally on cost. On the flip side of that, you have more and more demand for analytics; and underwriters are becoming much more discriminating in terms of choice of risk, which is something that I personally welcome. When you put all of that together, I get a clear sense that if there was any notion that there was a hard market emerging, I'm not seeing it.