IBM hired Kathleen M. Ireland to bring risk management in-house

Kathleen M. Ireland does not shy away from challenges.

When Ms. Ireland, vice president of global risk and insurance for IBM in Armonk, New York, and Business Insurance's 2015 Risk Manager of the Year®, took over risk management for the technology giant in 2005, she had to build a risk management department from the ground up.

“IBM was looking to reverse the way that they had handled risk management within the organization, moving from outsourcing to the brokerage community to reinvesting and building a risk management function within the corporation,” Ms. Ireland said.

At the time, Ms. Ireland was senior vice president at Marsh USA Inc. In that position, she acted as outsourcing international casualty risk manager for IBM. She previously had been a vice president at broker Johnson & Higgins working on the IBM account before Marsh purchased J&H in 1997.

Before Ms. Ireland joined IBM as manager-global risk and insurance management, there was a department that was staffed by four or five people, but IBM basically had outsourced risk management to the brokerages.

“The brokers would work with them in identifying the risk, but basically they ran the process with the internal IBM manager,” she said.

After being hired to bring risk management in-house, Ms. Ireland said, “we focused on a foundation of control, which meant that the corporate risk management department would have sole responsibility and authority to place, design and implement all global property and casualty insurance worldwide.”

“It was a very exciting opportunity when I got here, because what we were able to do was create a whole new department from the ground up,” she said. “We basically scraped it down to the bare wood.”

She said her 25 years' experience as an international broker dealing with many different companies and their risk management departments to coordinate placements of their programs allowed her to see what worked and what didn't. The practices that didn't work were left behind.

“We were able to take the best and build our department on that, and it's worked out very, very well,” she said. “We decided to implement what we liked and what worked well for other risk managers and avoid what was ineffective. Eventually it evolved into a center of excellence.”

She considers creating the center of excellence of risk and insurance her greatest achievement at IBM. Over the course of 10 years, “we have re-evaluated all the different approaches to risk management,” Ms. Ireland said. She said her second greatest achievement is “successfully implementing our risk management strategy, which is insurance is the last resort.”

Of course, the challenges didn't stop with creating a centralized risk management function within IBM.

“Because IBM is a global company with operations in 170 countries, we always find there is something new that we are undertaking,” she said. “That's primarily because we're in the forefront of technology. So the real challenge is keeping a balance to prioritize and also adhere to our risk management philosophy.”

With multiple challenges coming in from around the world, IBM has to retain the big risk picture while maintaining attention to the details, “because attention to the details in our industry is really key,” according to Ms. Ireland. “The best way that we prioritize all the challenges that come in every day is to stay fresh, creative, optimistic and enthusiastic in meeting these challenges. We also have many ways we engage with our business units around the world, and we have a very robust framework that helps us manage and anticipate.”

“The other good part is the dialogue we have with our business units helping them identify which risks to retain, which risks to avoid and also how to manage risk to maximize the reward while minimizing the downsides,” she said.