September 24, 2019 by Adam Malik
Facing increasingly difficult market conditions means now’s the time risk managers can prove their true worth, one expert told a recent panel.
Steve Pottle, director of risk management at Thompson Rivers University in Kamloops, B.C., said that as renewal costs go up and new challenges arise, risk managers have to stand tall in the face of bad news. It is, after all, the true nature of the job.
“This is our time. This is how risk managers earn their paycheques. It’s not just getting insurance coverage. It’s about being the face of the risk,” he said as part of a panel at the recent RIMS Canada Conference. “We are the face of the risk. It is our responsibility to ensure that at any given time we do our very best. We’re not trying to be risk perfectionists, but risk managers.”
It can be up for debate as to whether or not the market is hardening or evolving, but it’s transforming nonetheless, Pottle added. That’s why this is the time to manage key relationships while demonstrating critical thinking skills and the ability to work well when the pressure is high. Focus on what you do best when it comes to underwriting, leveraging broker partnerships and the like.
“This is the time to roll up our sleeves and manage risk in our organizations [and] do the best we can with this hard market. And we don’t know when it will end. Who cares,” he said. “If it all disappears in a year, it’s bad for us to go back and say, ‘Next year, I’m pretty sure we’re going to get a rate reduction.’ Because that had nothing to do with risk managers. That has to do with the market. This is where you make your money as a risk manager – not in the good times.”
When it comes to doing the work, Pottle recommended risk managers keep management up to date on market changes and impacts it could have. “We’re talking about precision of information. I think it’s very important to benchmark your program, how it works, the nuances of your specific program against your industry peers,” he said.
Strengthening relationships with carriers at this time is also essential. It helps guard against surprises, which nobody likes. “We don’t want anyone to be surprised. So if you set the expectations, manage the expectations, get out in front of what’s happening here, I think as a risk manager, that’s an opportunity. And quite frankly our responsibility. It’s not only good for your board but it’s also good for your job longevity,” Pottle said.
Fellow panellist Linda Regner Dykeman of Allianz agreed with the need for strong relationships. It helps develop trust so that both sides are working in a positive environment.
“As a carrier, we want to hear about the losses you encounter or the incidents that you have – even if they’re not covered. We want to work with you in partnership,” she said. “For risk managers, this is a partnership where we want to work together with you to find that solution. Just because we know of an incident or a loss, it doesn’t mean we hold it against you. It’s not that adversarial relationship. It is one around collaboration for a common goal.”