You cannot provide coverage without understanding the risk – and a number of exposures are undergoing some very fundamental changes, presenting new challenges for risk managers.
Colette Taylor, vice president, specialty lines for RSA Canada, just came back from the recent RIMS Conference in San Diego, Calif., where the topics and discussions were as diverse as the responsibilities that risk managers carry each and every day.
One key aspect of this shift is globalization: the risk associated with companies expanding their global footprint.
“Compliance with local authority and regulation, and the responsibility you have towards employees vary from market to market, and navigating these differences can be a complex process,” she says. For instance: do you need a global program? What are the local policy requirements? What are taxation implications? Consequences of not getting it right means you may face fines, penalties or even jail time.”
For those in risk management, resources and networking from RIMS and RIMS Canada are crucial to gaining a better understanding as to what new risks insurers are facing today.
Because all too often, Taylor points out, risk managers are forced to operate in a vacuum.
“The conference was all about enriching those relationships and exploring the network. Being a risk manager can be a pretty lonely job at any company – so RIMS gives them an opportunity to get together as a community and discuss the issues they face in their industry with others who might be in a similar situation,” says Taylor. “When I think of the risk manager, the knowledge base they need to do their job is very complex and diverse.”
If they are in manufacturing, for example, they need to understand the manufacturing process, who they are selling it to, what the supply chain looks like, who their vendors are, and how that business relates from a risk standpoint, Taylor points out.
“Then from the risk control side, they need to understand the insurance contract they are entering in to, the transferability of risk and how the indemnity clause will respond,” she says. “Then they have to understand the claims management aspect. If they are in the retail sector, for example, where you get a high volume of small claims, they need a specific kind of internal process to be in place. The type of relationships you need to have with third-party adjusting firms or your insurer claims department to make sure you are mitigating those claims is another important consideration. The dynamics of what risk managers are responsible for is really diverse.”
Among the major topics of discussion at the conference was cyber technology.
“Even though we still tend to think of it as an emerging risk, we’ve been talking about the impact of new and emerging technology for quite a period of time,” she says. “As we move quickly toward digital wallets and currency - just one aspect of this vast shift - it is important to recognize that cyber technology is such a dynamic and complex area that much of its impact on business is still being understood by industry experts.”
Artificial intelligence is another aspect, as it will not only impact risk exposures for insurers, but require new risk training and awareness for company workers.
“On top of evolving risks, companies are trying to do more with less, and the analysis of the type and level of risk management investment a company is willing to make is no exception,” she says. “You can relate all of this back to a product like director’s and officer’s liability, and what they will be facing personal exposure to, that they may not even be aware of yet to build a case for adequate risk protection.”
The takeaways for insurers should be to build and foster strong broker partnerships and create forums of discussion to help risk managers and brokers design better insurance product models.
“We’re constantly providing learning opportunities to our risk management community on key trends that we’re seeing in emerging risk; we now want to go beyond that in our offering to them”, says Taylor.
Going beyond that will include training, as Taylor hints at what is to come from RSA.
“We’re looking at providing thought leadership of our own in conjunction with key business partners outside the insurance industry,” she says. “Supporting risk managers not just in what we provide in insurance, but also in terms of thought leadership is going to be part of our educational offering to brokers in the near future.”
To learn more about RSA Canada’s risk control services, visit Risk Control for Large Businesses.