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Former RIMS presidents examine state of risk management

Former RIMS presidents examine state of risk management

Risk managers need to get face time with senior management to prepare them for a hardening market, particularly given the current state of the economy, according to former presidents of the Risk & Insurance Management Society Inc.

“You need to prepare management for what is happening,” said Lou Drapeau, 1996-97 RIMS president and director of risk management for the University of Kentucky in Lexington.

Lance Ewing, 2003-04 RIMS president and now Cordova, Tenn.-based regional industry practice leader-hospitality and leisure for Chartis Inc., also stressed the importance of preparing management for a changing market. The risk management community is “living the poor economy,” he said. During a wide-ranging panel discussion featuring former RIMS presidents at this week's conference in Philadelphia, Mr. Ewing advised his listeners to “know your data,” because underwriters need that information.

Turning to the crisis in the eurozone, Janice Ochenkowski, 2007-08 RIMS president and managing director at Chicago-based Jones Lang LaSalle Inc., said the potential failure of European banks could have “global ripples.” Mr. Ewing also pointed to the impact of Solvency II, the European solvency framework currently slated to go into effect in 2014, as a potential concern for risk managers. He said that 10% of European insurers won't meet Solvency II standards.

Mr. Ewing also cited the new Federal Insurance Office as another entity that could have an impact on risk management. He noted that FIO is intended to be a nonregulatory body. He added, however, that regulation drives Washington and wondered how long the new office will remain nonregulatory.

Social media also merited the panel's attention as a potential source of exposure.

Michael Liebowitz, 2005-06 RIMS president and director-insurance and risk management at New York University in New York, said risk managers need to look at their organizations' tolerance for social media, such as whether they block certain websites. He said brand control is the biggest issue arising from this exposure.

“My biggest exposure is my brand,” said Mr. Liebowitz. Various factors ranging from a cyber attack to a research project that “goes the wrong way” can impact NYU's brand and reputation, he said. Rebuilding a brand is both difficult and expensive, he said.

The former presidents also focused on the challenges facing the organization itself. Christopher Mandel, 2002-03 RIMS president and now president and managing consultant of Boerne, Texas-based Excellence in Risk Management L.L.C., cited two challenges in particular for RIMS: being timely and supporting a “viable, vibrant chapter structure.” Mr. Ewing said one of the challenges is determining how to get more members to give the organization their input.

Mark Walls, vp-claims for Safety National in St. Louis, moderated the session.