Profile: Walk the Talk

The weather may be chilly, but risk managers can expect a warm reception in Chicago this spring at the 41st annual Risk and Insurance Management Society (RIMS) conference. As Lance Ewing takes the reigns at RIMS, he recognizes that risk managers are looking for guidance now as never before, and the society hopes to provide this. “We have to be able to answer the call that is most relevant to all of us, which is the hard market.”

LAST BOY SCOUT

As executive director or risk management for Nevada-based Park Place Entertainment and a veteran in the field, Ewing appreciates just how rough the current market is. “Even those of us who have lived through harder markets, this is a market we’ve not seen in the last 50 years. I’ve certainly not seen it.” Not only are insurance rates on the rise and terms tightening on multiple lines of business, but the unpredictability of the market, the “corkscrew turns”, have left risk managers somewhat bewildered. “We used to pick up the phone and say ‘renew me at 20% less’, now we pick up the phone and hope it’s not 200% or more.”

The market has also become a challenge with the rising visibility of risks even at the highest levels of corporate governance. “This market has opened the eyes of the CEO, the CFO and the COO to the risks that are there.” And the risks are myriad, particularly in light of the recent corporate scandals of Enron, Worldcom and others. Beyond insurance, risk managers are addressing issues of compliance, ethics and integrity on the new landscape.

“Integrity” will in a sense act as Ewing’s theme in the year ahead.

The importance of integrity for risk managers cannot be understated, he believes, with risk managers acting as the “last boy scout” for corporate integrity. “With all these things going on, executives being led away in handcuffs, cooking the books…risk managers act as the corporate conscience. The numbers you present to your CFO have to be correct, you can’t compromise corporate culture for personal gain.”

On the other hand, Ewing recognizes the current environment as a chance for risk managers to shine. “This is a great time for risk managers to be putting their best face forward. It’s easy to captain the ship in calm waters.” To do this, risk managers must learn to stand before boards of directors and senior management and present their strategies, to explain complex issues such as the insurance cycle, captive markets and the like. He believes the best teacher is the risk management community itself. Seasoned risk managers need to help educate the new breed, some of whom may never have dealt with hard market conditions. The conference, for example, will feature “risk manager only” sessions to allow “a real opportunity for risk managers to openly share…brainstorming as to how we as a group go forward.”

QUALITY PUSH

RIMS is currently hard at work on its “Quality Improvement Process” (QIP), for which guidelines were released at last year’s conference in New Orleans. The QIP will ultimately assess quality in terms of the relationship between risk managers and insurers, brokers and other service providers.

Ewing says this year’s conference should see more information released on the process, although the final stage, implementation of a “scorecard” and actual assessment is still to come. “It’s unfair to give an exam when you haven’t prepared the students for the test.” RIMS wants to clearly lay out expectations so companies know what is expected before they are judged against those expectations.

Not only is the process intended to show what risk managers are looking for in their relationships with these industry partners, but also to have those partners express their expectations for risk managers. “We as risk managers need to get into the mix as well,” he comments. Risk mangers have as much at stake in improving the quality of their role in these relationships. For example, are risk managers providing insurers with all the information they need to write a policy? “In some cases, the answer is ‘no’, we [as risk managers] haven’t done this well enough.”

In the end, RIMS wants to highlight those brokers, carriers and others who “got the message and made quality an initiative”. Ewing says some stakeholders are already implementing the guidelines in advance of the scorecard being released. For risk managers, the message is also the distinction between quality and price. “We can’t go around saying always that the best quality is the lowest bidder – it is about a fair price for a quality service.”

BEYOND CHICAGO

After the conference, when Ewing officially takes the helm, the society faces a busy year, and in fact will be looking at goals for the next three to five years. “This is not a once-and-done leadership,” Ewing says.

With the inception of the Japan chapter, the society will be looking at further international expansion, quite possibly in the emerging Asian market. Canada provides a foundation for that expansion, he says, with its well-attended conference and strong leadership acting as a model for new chapters coming into the society.

Education will be focused not only on the hard market, but also the implementation of new terrorism legislation in the U.S. At the time of writing, Ewing noted that in light of the “saber-rattling” preceding a potential war in Iraq, the terrorist threat looms as large as ever. “By the time the conference comes, we may or may not be engaged in a conflict somewhere. We are all taking a look at our exposure from a terrorism aspect.”

RIMS will also be looking at marketing its new RIMS “Fellow” as the “premier educational designation” for risk managers, now that a foundation of programs is in place. Technology, from online education to video conferencing, will be on the agenda, and communication will be center stage.

The changing litigation landscape in the U.S. will take up much of the society’s legislative calendar, Ewing notes. “Unfortunately, here in the U.S., litigation has become a recreational sport,” he points out. From medical malpractice to mold, legislators are debating the limits of tort access and awards, all of which will have an impact on corporate America. The implementation of the Sarbanes-Oxley legislation with respect to corporate governance will be an area of concern for members, he also predicts.

Ewing also sees RIMS playing a role in assisting and educating risk managers about the formation of captives and other self-insurance options. In light of the current hard insurance market, particularly given the estimation that traditional commercial cover could be subject to another two to three years of tight conditions, the society has to consider what it can do to enlighten risk managers of the captive opportunities out there, he adds.

PROFESSIONAL PRIDE

Branding the society will be key to Ewing’s presidential strategy, and to instill in members a sense of pride in their profession. “I have a burning desire to make this a profession to be proud of.” In his words, “[to] “walk the talk” by raising the bar on expectations while not making promises that cannot be kept.

Ewing teaches risk management at the National Alliance for Insurance Education and Research and is a board member for the Academy of Producer Insurance. He has testified at federal and state hearings on risk management, and recently wound up a speaking tour of Eastern European countries to promote the profession. At RIMS, he has occupied a variety of executive board positions, most recently first vice president and chief risk officer.

Ewing’s career began with the H.J. Heinz Company, where he specialized in security, safety and workers’ compensation, topics about which he has also written extensively. He worked for various insurance companies in risk management and loss control before moving to GES Exposition Services as senior director of risk management. By nature, Ewing says he is a risk-taker, with interests including motorcycle riding and sky diving. Among the attributes that Ewing says should help him in the year ahead, both as RIMS president and as a risk manager, i
s to find the “fun” no matter how rough the waters may get. “In a hard, tough market, it’s good to keep your sense of humor,” he laughs.