Rick Roberts, the director of risk management and employee benefits for Ensign-Bickford Industries, Inc., became RIMS president on January 1.
A member of RIMS for 25 years and on the board of directors for seven, Roberts has served as RIMS' vice president and board liaison to its external affairs committee – and he sat down with Insurance Business for an exclusive interview on the state of risk today, and where the appetites are for risk tomorrow.
“There are new risks being thrown at companies every day,” says Roberts. “Of the risks that are out there, cyber is at the forefront for everybody. That is something that changes every day, the different attacks that come at you, and who the attacks are coming from. That is the number one risk.”
Although Roberts see risk management for companies moving into more global operations, cyber will be the big seller – and the greatest underwriting challenge.
What is helping to sell cyber risk coverage are the major cyber hack breaches that have occurred, Roberts told Insurance Business, and that those policies have paid out – which spurs confidence in those policies among business clients.
“The brokers have done a great job inserting themselves into the non-insurable type risks in companies, to show the worth that they can add, and the value they can add, as risk managers,” says Roberts. “I think it’s starting to take hold with the finance people, who can see the add-on value that the brokers are providing.”
How RIMS has changed?
“The biggest change I’ve seen is when I first started out in risk management, 25 years ago, my job was at that point 85 per cent buying insurance and finding as much insurance as you could get to protect the company,” he says, “and 15 per cent would be risk management issues. That has completely flip-flopped.”
Now, Roberts spends 15 per cent of his time on insurance and insurance placements, and 85 per cent on everything else that is going.
“Which is really exciting for the risk management field,” he says. “You go back, risk managers were looked at as the insurance ‘guy or girl’ and now you see them sitting at the table with senior management discussing risk with the company.”
Are insurance companies changing?
“The insurance companies are looking for ways to grow, and if you are going to sit there and be a cookie-cutter and write home owner’s and write auto and do some certain general policies – you are going to get left behind,” says Roberts. “Senior management is recognizing that if they are going to expand themselves, they are going to have to define risk profiles that they are willing to work within. But my impression is that insurance companies are quite a bit more aggressive; which is good for us, the buyer.”
What Roberts hasn’t seen lately are the flash-in-the-pan companies that would provide coverage, then remove themselves from the market a few years later.
“I can remember when I first started, you would have a company that would jump in for property insurance, and then they would have one big loss and they would jump back out,” says Roberts. “I haven’t seen that as much in the last 10 years, which is really good, because they are thinking better about what they want to do in the market, they are pricing it better, and they are working with their clients on loss control – not hopping in and out of lines of business; that was very difficult to contend with.”
What has contributed to this better behaviour has been the use of analytics.
“I think the data and the use of data is much better. The big three brokerages houses particularly: I’ve seen their presentation and their data analytics’ programs; they’re astounding,” says Roberts. “And I’m assuming the insurance companies have that as well for their catastrophic modelling programs, so they’re not putting themselves in positions like in years before.”
Roberts cites the
State Farm example when a severe hurricane went through Florida, and one insurer “had all of their apples in one basket.”
Where is RIMS headed?
“We stepped back four years ago and said, ‘we have to become a more strategic-type organization versus operational,” says Roberts. “A very similar move that we were professing to risk management professionals: ‘Get out of the operational and get into the strategic.’”
That includes building the international networks. For example, 66 countries were represented at last year’s RIMS Annual Conference & Exhibition.
“We have to be cognizant that people are coming to RIMS looking for professional opportunities; looking for content for their members for around the world,” says Roberts, who also sees the need to bring in new blood to replace a large cohort of aging risk professionals who are leaving the industry.
“We’ve put a focus on getting the word out to young professionals that risk management is a great job to be in” he says. “We’ve made a big push to get these rising risk professionals – those in their early 30s – to get into the profession.”
