Learning to understand and communicate with the various departments in a company and bringing new risk management solutions to the table will be critical for many risk managers and their advisers in the future.

Consultants see themselves as the key to helping companies manage strategic risk management programs, which attempt to address all of a company's exposures, including ones that traditionally are uninsurable, and often blend traditional and non-traditional risk financing.

Those skills represent "a different way to do what we've traditionally done and move that forward to the year 2000 and beyond," said Susan Sauer, senior vp at Johnson & Higgins in Chicago and leader of the brokerage's total cost of risk initiative.

Because these programs involve more than traditional insurance, implementing them requires the involvement of people from disciplines and departments other than risk management, consultants say. These people usually come from the tax, finance, legal, operations and strategic planning departments, but also can

include chief financial and executive officers.

"You talk to more than one audience," according to Jerry Miccolis, principal with Tillinghast-Towers Perrin in Parsippany, N.J.

Sometimes the varied audience can present problems for the risk manager and consultant.

"It can be difficult for people to understand the concepts if they are relatively inexperienced in risk management," said Michael Rodman, executive vp with J.H. Albert International Insurance Advisors Inc. in Needham, Mass.

But, he added, once risk management ideas are explained, they are understood. "It's not rocket science," he said.

It's not hard to teach people about the risk concepts, as they are relatively easy to understand, Ms. Sauer agreed. "We try to get them to think more broadly and dig deeper at what the risks are and try to chart them by importance," she said.

Union Carbide Corp. in Danbury, Conn., relied on a consultant to help establish its non-traditional risk financing program, which combined finite risk and integrated risk elements (BI, Feb. 26, 1996).

"The advantage is consultants have a broad view and understand the finance, tax and insurance issues," said Richard M. Inserra, assistant treasurer-risk management and insurance. "They understood what it was we were looking to achieve and were able to work with us to get it done."

To be effective risk advisers, consultants need to think expansively and look at the company as a whole.

Mr. Miccolis of Tillinghast said it's important to make an overall assessment of the client and its goals. He looks at the business the client is in and how it operates, the company's strategic objectives and where it wants to be in three to five years, and what financial measures it uses to gauge financial progress.

From there comes a broad picture of the risks. "Risks are the things that will potentially get in the way of hitting their targets," he said.

Bringing together the various people in the organization to make an overall assessment is a critical role of the consultant, said Steve Coombs, president of Risk Resources in Westchester, Ill.

"We're facilitators," he said. "In many cases we're bringing theparties together where it's never been done before."

"You got to have the people in the room to tell you what the risks are," said Ms. Sauer of J&H.

No skill is more important to risk managers and consultants in this role than the ability to communicate, particularly beyond the language of risk management, consultants said.

"Having a set of skills that allow us to understand the big picture is critical," Ms. Sauer said. "You need to talk the talk of risk management but also of the CFO and others in the business."

Communication is critical, especially when dealing with financial people. "If we can explain it to them in terms of their world, it somehow helps them to understand it," said Richard S. Betterley, president of Betterley Risk Consultants Inc. in Sterling, Mass.

Communicating the consultant's goals, which typically include conducting a company-wide risk assessment, also helps develop trust with the various people involved and convince them that consultants are not there to "cut off people's legs," said Mr. Coombs of Risk Resources.

When a level of trust is created, people become forthcoming and provide the needed information. "Once you have their support, it's so much easier to get the job done," Mr. Coombs said.

Without the necessary information, a consultant cannot help the risk manager properly evaluate the risks.

Getting the information from the far-flung locations of a multinational organization can sometimes be difficult. "You have to be able to obtain and access information from these different businesses and countries," Mr. Coombs said. "Trying to determine how all those pieces fit in is quite challenging."

Despite the increased number of people involved, consulting on non-traditional risk management programs does not necessarily take more time, consultants said.

"The time-consuming part is understanding the language the different audiences speak," said Mr. Miccolis of Tillinghast. "You need to make an internal investment to learn their language and issues."

Although some concepts take more time to discuss, because there are fewer non-traditional options, the overall time expenditure remains about the same, said Mr. Betterley.

"Because these are new ideas, many times it takes more meetings and more material to have them assimilate the information and apply it," Mr. Coombs said.

But corporate clients aren't the only ones who need to be up to speed on the new programs.

A risk manager who implemented some non-traditional concepts in her company's risk management program found consultants lacking.

Becky Huntsman, corporate risk manager for Vishay Intertechnology Inc. in Malvern, Pa., said she is generally satisfied with the work of risk management consultants-except when dealing with non-traditional strategies.

"They really don't seem to be innovative enough," she said.

She learns of new programs by attending seminars or from underwriters, not from consultants. Ms. Huntsman recommends that consultants "keep more abreast of new products and alternative products available" and become more proactive in dealing with clients.

Also, when she gathered the company's CFO and other financial people to discuss innovative ideas with the consultant, she preferred to let the underwriter make the presentation because "it was beyond the expertise," of the consultant.

While interest in non-traditional programs like strategic risk management have increased, few programs actually have been implemented.

"We're still in some stage of infancy" with the plans, said Mr. Rodman of J.H. Albert.

Many clients are interested and discuss the ideas, "but when it comes down to actually deciding to proceed, the caution flags come out," Mr. Betterley said.

"You will see increased levels of interest if the market should turn around," Risk Resources' Mr. Coombs said. In a soft market, companies can afford to simply buy insurance rather than look at new alternatives, he said.