12/3/08
Risk and Insurance Management Society (RIMS) Webinar
Vanessa Mariga Associate Editor
7:06 PM
Page 46
Back to Basics As the fallout from the credit crisis slowly rolls out, risk managers need to stick to the basics of what they do — identify potential liabilities, develop action plans and monitor the financial strength of their companies’ insurers.
The cascading financial services crisis in the United States has risk managers on both sides of the border bracing for a bumpy renewal season in the coming year. The crisis has forced many risk managers to re-consider how they approach evaluating the financial stability of insurers, their insurance portfolios and whether or not they will move policies from carriers that have been redflagged by rating agencies and the media. To aid risk managers in navigating through the turbulent times, the Risk and Insurance Management Society (RIMS) hosted a Webinar featuring a panel of risk managers representing the corporate, public and educational institution sectors. “These are extraordinary times and I think it’s really critical for a risk manager to go back to the basics,” said Webinar panellist Janice Ochenkowski, RIMS president and managing director at Jones Lang LaSalle Inc. What does this entail?
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The first step is to identify the issue and look at the liabilities the organization faces, Ochen- kowski said. “Quite honestly, over the next few weeks, these [liabilities] will be changing almost daily.” The next step is to assess the potential liabilities and develop an action plan. “Work with your internal management and operations, implement the action plan and, on an ongoing fashion, assess it.” Ochenkowski also stressed the importance of continuously monitoring the financial strength of insurers, as well as the lenders, vendors, clients, contractors and tenants upon which an organization relies. “You notice that I am not saying that I am doing all of this [on my own], because risk managers themselves cannot fully control all of these aspects,” she added. “We need to work with other management.We need to show we are part of our senior management teams, and that together we add value in helping them create good, effective strategies for the business.”
STAY OR MOVE ON? Monitoring the viability of carriers on an ongoing basis is good risk management practice, but what should risk managers do when it becomes apparent that a carrier with which they deal is operating on shaky ground? Should a risk manager seek coverage with a different insurer that appears to be withstanding the economic crunch, or should they stick it out? “This thing is happening and cascading so quickly
Illustration: Laurie LaFrance
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