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Loss prevention trumps insurance buying for IBM's Kathleen M. Ireland

Posted On: Apr. 26, 2015 12:00 AM CST

Loss prevention trumps insurance buying for IBM's Kathleen M. Ireland

At IBM, “insurance is the last resort,” according to Kathleen M. Ireland, the company's vice president of global risk and insurance.

That means preventing a loss from occurring in the first place, and getting the message of loss control heard clearly throughout the Armonk, New York-based company, Ms. Ireland said.

“We have to communicate our message of risk management throughout the entire vast world of IBM,” she said. “It has to engage all of the different aspects of risk, and how you identify risk and how you manage it.”

Traditionally, when companies have a risk event, they'll look for insurance as a first resort, she said. “They may just say, "We'll buy insurance, and when something goes wrong, we'll look for the policy to pay.'”

But that's “completely the opposite of IBM's philosophy,” Ms. Ireland said. Rather than react to a situation, “we spend 80% of our time focused on pre-loss prevention, reducing the amount of the loss and avoiding the risk where we can. Embedded in this are five risk management techniques — loss prevention, claim mitigation, avoid, transfer and then purchase insurance.”

She said that by spending the time to prevent a loss from occurring in the first place, “that allows us never to have a loss of life, no loss of our physical assets, no interruption to our income and no market share loss and — most important — never disappoint one of our customers.”

IBM's reputation is not insurable, she said. Taking loss-prevention actions “really helps us protect our brand and also protect our entire customer base. They come to rely on us. We all rely on technology, and without IBM and us being there for them, we would seriously risk potentially losing some of our major clients. So we work very hard at this.”

Part of the way IBM approaches loss control is to follow a highly protected risk philosophy, according to Ms. Ireland. The company conducts inspections of locations with values of $25 million or greater.

She says that because “we agree that more heads are better than one,” the company has multiple inspection firms review its major sites. “Our point is to make sure we can see all of the different potential loss scenarios so we can prepare and react and prevent those loss events from occurring in the future,” she said.