Terrorism, catastrophes, tech drive risk management changes: Former PRIMA leadersReprints
LONG BEACH, Calif. — Terrorism, technology and catastrophe-driven changes in property insurance are the most significant factors influencing how risk managers think today, according to former presidents speaking at the Public Risk Management Association 2014 Annual Conference in Long Beach, California.
Four past presidents of PRIMA gave their takes on the chief factors that helped shape their actions as risk managers during a panel discussion on Monday.
“For me, the most impactful thing was probably 9/11, because it had a lot to do with elevating the attention to business continuity, disaster recovery, and risk management,” said Laura Peterson, Laramie, Wyoming-based director of risk management and insurance for the University of Wyoming.
Changes in property insurance pricing and availability over the past couple of years based on predictions which preceded but were validated by 2012's Superstorm Sandy have influenced the approach to risk management, said Dan Hurley, former risk manager at Norfolk Public Schools in Norfolk, Virginia. The predictions of bigger storms coming further up the Northeast coast and further inland have driven uo property/casualty rates and have forced changes in terms and conditions, he said.
“We had a fairly good bump in property insurance increase after that occurred, probably 7% to 8%,” said Mr. Hurley. The next year, however, there were severe cutbacks in coverage provided and a near-doubling of rates, said Mr. Hurley, forcing him to buy excess wind coverage for the Norfolk Public Schools for the very first time. “It hit us pretty hard,” he said.
Technology has provided the most significant shift in risk management, said Debra Darnofall, risk manager of the City of Longmont, Colorado, who had the first personal computer in the University of Colorado's Treasurer's office in 1981.
“I'm just seeing a really huge change with the way we're able to supply data,” said Ms. Darnofall. The cloud environment, she said, “is changing our speed of computing and the cost of keeping data.”
Stewart Ellenberg, risk manager for the City of Boulder, Colorado, also said technology has influenced the way he performs his duties.
“I think that the technology changes in the last 10, 15 years from the ability to get information quickly to the ability to search for answers has been very, very helpful from a risk management standpoint,” said Mr. Ellenberg.