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CALGARY, Alberta -- A substantial change is taking place in the nature of risk management and the role of the risk manager within an organization, one risk manager contends.

Fundamental to this change is the notion that risk managers must create value for the organizations they work for, says Scott Lange, director of risk management at Microsoft Corp. in Redmond, Wash.

The starting point for value-creation is vision, he added.

"One of the questions you should be asking is, 'Do you contribute to your organization's vision?' " Mr. Lange said at the Canadian Risk & Insurance Management Society conference earlier this month.

Traditionally, the number one thing that risk managers have provided within their organizations is insurance expertise, he said. Also, they have provided: claims handling expertise; risk evaluation; loss prevention; and technical support for insurance-related services such as certification of insurance, he said.

In addition, the traditional focus of risk managers has been on managing risks that have usually been passed on to insurers, Mr. Lange said.

"There is nothing wrong with this and you can create value just by doing these things, but you have a new opportunity because of the changing paradigms to do more," he said.

Today, more risk managers are seeking to manage uncertainty rather than simply focus on insurable risks, Mr. Lange said.

Managing uncertainty requires risk managers to "think about processes, not just events," he said.

And risk managers should not be as risk-averse as they have been in the past. By assessing the possible rewards as well as possible risks, risk managers are more likely to create value for their organizations, Mr. Lange said.

If a risk manager is involved in a decision where there is a $100 million risk and a $200 million opportunity, the risk

manager would rightly question whether the risk is worth it, he said.

"But if it's a $100 million risk and a $5 billion opportunity you take the risk," according to Mr. Lange.

Risk managers also have to consider the full range of financial tools available to deal with uncertainty, whether it be insurance or an integrated financing approach, Mr. Lange said.

"You can't do it all, but maybe you have a role as a leader," he said.

And as the role of the risk manager is changing, so is the technology that can help enable risk managers to take a larger role in their organizations, Mr. Lange said.

For example, by using intranets, risk managers can communicate more effectively with all of the various other company departments, he said.

By using the technology, risk managers can more readily access the expertise they need to play a larger value-creation role. For example, risk managers will be able more readily to draw on the expertise found in departments such as auditing, legal, treasury and human resources, according to Mr. Lange.