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RIMS continues global growth
Legislation would end
FSA ‘use-it-or-lose-it’ rule
Society evolving to meet members’ needs
Legislation introduced in the
U.S. House of Representatives
would end a decades-old
Internal Revenue Service rule
that requires the forfeiture of
unused health care flexible
spending account contributions.
Under that 1984 rule, often
called “use it or lose it,” unused
FSA contributions must be
forfeited at the end of a plan
year. Under a 2005 IRS
modification, though, contributions that remain at the end
of a plan year can be used to
pay for expenses incurred during
the first two and one-half
months of the next plan year.
Under H.R. 1634, introduced last
week, employers could return as
taxable cash FSA contributions
that remain in an account at the
end of a plan year.
Zurich to refund nearly $4.6M
to some N.Y. policyholders
Zurich American Insurance Co.
will refund nearly $4.6 million to
73,000 New York statutory
Continued on page 22
COLLEGE STUDENT
SNAPSHOT
James Heuker will
soon graduate
from Olivet College
in Rockford, Mich.,
with a bachelor’s
degree in
insurance and risk
management with
a minor in claims. The president of
Olivet’s Gamma Iota Sigma chapter is
excited about his second trip to RIMS.
PAGE 14
BY RODD ZOLKOS
Risk management continues to
evolve as a discipline, bringing
added value to organizations and
new opportunities to its practitioners, the leaders of the Risk &
Insurance Management Society
Inc. said Monday during the
opening session of the society’s
2013 conference and exhibition.
And as the profession changes,
RIMS continues to grow and
evolve to better serve its members’ professional needs, the
group’s leaders said. Among
those developments is the extension of RIMS’ global reach, with
Mary Roth, the society’s executive director, announcing the formation of two new chapters:
RIMS Australasia and RIMS
Mary Roth, RIMS
executive director,
announced new
chapters in Peru
and Australasia.
Peru, chapters No. 80 and No. 81,
respectively.
In her remarks, Ms. Roth said
RIMS now has more than 11,000
members around the world. “As
membership continues to grow
globally, we are better positioned to address risks that tranSee LEADERS page 18
Daniel Houston receives coveted Goodell Award
BY JUDY GREENWALD
“Thank you all for making risk management the greatest profession in the
world,” Mr. Houston, who has more than
The Risk & Insurance Management
40 years of risk management experiSociety Inc. presented its Harry and
ence, said while accepting the award.
Dorothy Goodell Award on Monday to
The Duluth, Ga.-based McCart Group
Daniel W. Houston, executive director,
is an insurance and risk management
enterprise risk management and learnconsulting firm.
ing for The McCart Group.
Mr. Houston was described during the
The award, which is named in honor of Mr. Houston
presentation as a visionary who teachRIMS’ first president, is given to the individual who has furthered the goals of the society es and enhances risk management. His backand the risk management discipline through outstanding service and achievement.
See GOODELL page 18
SANDY LESSONS
SPENCER SCHOLARS
SOCIAL MEDIA RISKS
Unexpected risks
surface after storm
Foundation reaches
$5 million milestone
Communication of
workplace policies key
PAGE 3
PAGE 4
PAGE 4
Entire contents copyright by Crain Communications Inc. All rights reserved.
© 2013 Liberty Mutual Insurance 36 US 220506
Liberty Mutual Insurance is dedicated to controlling risk
and delivering superior outcomes. Learn more at booth #921.
13bi0084.pdf
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Risk managers
underutilized: Survey
BY JOANNE WOJCIK
Though there may be “closer
alignment” in the perceptions of
senior executives and risk professionals about the role risk
management can play in strategic
planning, the value that risk professionals can deliver to their
organizations is still not yet being
fully exploited, a new survey
shows.
The 10th annual Excellence in
Risk Management survey, coauthored by Marsh Inc. and the
Risk & Insurance Management
Society Inc., found that 52% of Csuite executives and 47% of risk
professionals agree that the top
reason why risk management
should be included in strategic
planning and executive activities
is to identify and assess risks aris-
ing from those activities. In addition, 46% of C-suite respondents
and 40% of risk professionals
agree that the risk managers
should provide input into their
organizations’ strategic planning
process.
However, only 15% of risk professionals and 20% of the C-suite
respondents said the risk manager is a full member of the strategic planning and/or execution
teams, according to the survey,
which was released Monday at
the 2013 RIMS conference in Los
Angeles.
“The big disconnect that we saw
was that while the C-suite wants
risk management to be more
engaged in strategic planning and
execution, the C-suite is not
resourcing it properly,” said
Carol Fox, director of strategic
Carol Fox, RIMS’ director of strategic and enterprise risk practice, left,
and Yvette Connor of Marsh Inc. discuss risk managers’ corporate roles.
and enterprise risk practice at
RIMS, in an interview conducted
prior to the press conference
where the survey results were
revealed.
“The C-suite is not incenting
risk managers for what they
expect from them. They need to
change the compensation and
budget structure,” Ms. Fox said.
Though they may not be in the
same order, the fact that the top
three areas of focus for the Csuite and risk managers were the
same in this year’s survey shows
that risk professionals are making progress in gaining greater
recognition of the value that risk
management can provide to their
organizations, said Yvette Connor, managing director at Marsh
Inc., who also was interviewed
See MARSH page 19
HOT TOPIC SESSION
Tainted cash cited among unexpected risks from Sandy
BY MIKE TSIKOUDAKIS
The need for crisis management
plans, frequent contact among
business units and contaminated
currency were among lessons
learned from Superstorm Sandy.
Outside New York and New Jersey, most insurance claims from
last October’s tropical storm are
still open and range from millions
to billions of dollars, panelists at
the Risk & Insurance Management Society Inc.’s annual conference and exhibition said Monday during a session on lessons
learned from a storm that lashed
the Northeast and Mid-Atlantic.
Lizabeth Christman, vice president of risk management for
Ahold USA Inc., said although the
AP PHOTO/THE VIRGINIAN-PILOT, STEVE EARLEY
A North Carolina road is buckled from pounding surf leading into Mirlo
Beach in Rodanthe, N.C., on Oct. 30, 2012, as North Carolina's Outer
Banks faced flooding and property damage from Superstorm Sandy.
supermarket chain had detailed
risk management plans, protocols
and procedures in place to deal
with catastrophes, there were
unexpected surprises.
One big unanticipated risk was
$100,000 of cash the Federal
Reserve would not accept
because of contamination, Ms.
Christman said.
“We had currency that we
couldn’t take to the bank,” she
said.
Ahold USA has four regional
divisions and operates 773 supermarkets in 13 states and the District of Columbia. Ahold brands
include Stop & Shop New England, Giant Landover and Peapod,
among others.
The company employs 126,000
employees and generates $26 billion in annual sales. After Sandy
See MARSH page 19
BUSINESS INSURANCE
RIMS 2013
3
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Spencer awards
hit $5 million
milestone
Avoiding social media disaster
Risk managers should play lead role in crafting policies
BY BILL KENEALY
BY JUDY GREENWALD
The Spencer Educational Foundation Inc. on Monday announced
the scholarships totaling $282,500
to 50 risk management and insurance students from 19 universities, bringing the total amount
given to students since 1979 to
more than $5 million, according to
Spencer Foundation Chairwoman
Peggy Accordino.
The awards, given out to undergraduate, graduate and pre-dissertation students at the Risk &
Insurance Management Society
Inc.’s conference, brought the
number of Spencer scholars to
more than 650, added Ms.
Accordino, who is vice president,
director of risk management at
New York-based National Financial Partners Corp.
RIMS President John Phelps,
who is director of business risk
solutions for Jacksonville, Fla.based Blue Cross and Blue Shield
of Florida Inc., presented Spencer
with a $300,000 contribution,
payable over three years. Mr.
Phelps said the New York-based
Spencer Foundation “allows us to
touch the lives of students” who
“will eventually be the new leaders of risk management” and help
shape its future.
“What we’re going to use the
money for is to help promote the
establishment of risk management and insurance courses in
business schools around the
country,” Ms. Accordino said.
In addition, Temple University
in Philadelphia was awarded a
$50,000 Loss Prevention Education Grant funded by insurer FM
Global.
The grant was presented by
Spencer Educational Foundation
President Brion E. Callori, who is
senior vice president, engineering
and research, for FM Global.
4
RIMS 2013
Risk managers need to take an
assertive postion when it comes
to mitigating risks associated
with the use of social media in the
workplace, experts say.
During a panel discussion at the
Risk & Insurance Management
Society Inc.’s annual conference
on Monday, Karen Bachman,
director of risk management and
privacy at Shire Pharmaceuticals,
told the risk managers in attendance that if their companies do
not have comprehensive polices
governing the use of social media,
it is incumbent upon them to take
a leading role in creating one. “It’s
your responsibility to ask about
this and, if necessary, make some
noise,” she said.
Ms. Bachman said companies
should take special caution when
crafting a written social media
policy. In the case of her Lexington, Mass.-based company, a task
force was assembled to write the
policy; it included stakeholders
from various departments,
including information technology,
legal and risk management.
“It was like rewriting the Bible,”
Ms. Bachman said. “It took nine
months.”
Moreover, once a policy is established, risk managers need to
ensure its tenets are understood
by employers throughout the
organization. “A lack of training
is a big issue,” she said.
Indeed, Ms. Bachman cited a
2009 legal case in which a welldefined social media policy ultimately saved a health clinic sued
for invasion of privacy by a
patient. The plaintiff, Candace
Yath, sued Apple Valley, Minn.based Fairview Cedar Ridge Clinic, after workers there posted
embarrassing information obtained from Ms. Yath’s medical
records on the social media site
MySpace. The fact that the company’s networks blocked the
social network, forcing the workers to post the information from
home computers, helped convince
an appeals court the company was
not culpable, Ms. Bachman said.
See SOCIAL page 17
Simon Sinek urges leaders to do the right thing
BY ROBERTO CENICEROS
Humans have the capacity to
help each other do the right thing,
and tapping that capacity can
help businesses overcome risks
and succeed.
But businesses often misalign
their rewards, speaker Simon
Sinek said during the opening
presentation Monday at the Risk
& Insurance Management Society
Inc.’s conference.
“In the military, they give
medals to people who are willing
to sacrifice themselves so that
others may gain,” the optimist
and author told a packed hall. “In
business, we give bonuses to people who are willing to sacrifice
others so that we may gain. We
BUSINESS INSURANCE
Simon Sinek speaks Monday at RIMS’ opening presentation.
have it backward.”
Turning that around will take
great leaders, Mr. Sinek said.
And great leaders are like great
See SINEK page 17
XL Group
Insurance
When things look like they might stop. We’re the ones that’ll help move your business forward.
MAKE YOUR WORLD GO
xlgroup.com
and MAKE YOUR WORLD GO are trademarks of XL Group plc companies.
XL Group is the global brand used by XL Group plc’s insurance and reinsurance subsidiaries.
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David Sterling, Robert Spencer join RIMS Hall of Fame
David C. Sterling and Robert S.
Spencer on Monday were inducted
into the Risk & Insurance
Management Society Inc.’s Risk
Management Hall of Fame:
David C. Sterling Mr. Sterling
retired from The Hartford Financial
Services Group Inc. in 1964 as
assistant vice president and senior
risk manager after 42 years. He
managed the insurer’s worldwide
risk programs and exposures to
accidental loss. He purchased and
implemented one of the first
employment practices liability
insurance programs in the insurance
industry and one of the first cyber
risk liability, property and crime
insurance programs. His award was
accepted by Robert J. Nighan, vice
president-risk management for The
Travelers Cos. Inc.
Left to right, Mary Roth, RIMS executive director;
Stephen J. Grabek, president AIG U.S./Canada field
operations; Robert Nighan, vice president-risk
management, Travelers Cos. Inc.; and John Phelps,
RIMS president.
Robert S. Spencer Robert S.
Spencer, who died in 1979, held
many risk management positions,
including vice president of
insurance, for Atlanta-based Fuqua
Left to right, Mary Roth, RIMS executive director;
Stephen J. Grabek, president AIG U.S./Canada field
operations; Mr. Spencer’s daughter, Libby Spencer; his
widow, Charlotte Spencer; and John Phelps, RIMS
president.
Industries Inc. He is credited with
setting standards on captives’
dealings with domestic and international risk markets. The Spencer
Foundation, which funds the
education of risk management and
insurance students, was founded in
his memory. His award was
accepted by his widow, Charlotte,
and daughter, Libby Spencer.
Special RIMS 2013 Subscription Offer! One Year of a
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6
RIMS 2013
BUSINESS INSURANCE
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TUESDAY, APRIL 23, 2013
HEARD ON THE STREET
What do you hope to learn at this year’s conference?
tweets
FROM RIMS 2013
AL GORSKI
Chief Risk Officer
Orange County Transportation Authority
“It’s political risk. We are a public agency that depends on transportation
funding. So we want to make sure that the public understands that we handle
all our projects on time and within budget, so that they will have confidence
that if we need another ballot measure, we are going to use it for the public
good.”
GORDON L. ADAMS
A very well attended #RIMS2013
awards luncheon. Congratulations to all
the winners.
Paul Aquino
Perfect opportunity to meet top media
#RIMS2013: here with
@BusInsGSouter of
@BusInsMagazine
Roger Bickmore
Helping other businesses avoid risk is
what we do best… A great first day out
here in LA! #RIMS2013
Mike Smith
Chief Risk officer
Tri Marine Management L.L.C.
“We are an international tuna fishery and tuna sourcing company. The biggest
challenge is that there are no quotas or government regulations on the industry
right now, but we think that it is coming. When it happens, it is going to be a
major risk for our organization in terms of growth and operational profit.”
Coverage for #intellectualproperty
losses varies widely among general
liability insurance policies
Marsh
Congratulation to Lori Gray for being
named @BusInsMagazine’s 2013 Risk
Manager of the Year. #RIMS2013
IMRE Financial IQ
JAN P. MUMENTHALER
Head of Insurance Services Group
Business Risk Department
International Finance Corp.
“We help provide financing to the private sector in emerging markets, so I
would say the greatest challenge is the impact of the global economic crisis.”
#1 thing global firms should do is form a
robust crisis mgmt. plan for all risks they
may face
Willis Group
#RIMS2013 at the LA Convention
Center. Beautiful weather, great people!
Insurancecareer
#RIMS2013 Say hello to the IRS at
booth #751!
TheBestIRS
KEN BAKER
Program Manager, ERM
City of Edmonton, Alberta
Top 10 #risks identified in Global
#RiskManagement Survey unveiled
today at #RIMS2013
Aon P.L.C.
“We have a city of a million people, so we have risks coming out of our ears. A
couple big ones are provincial funding and demographics. One-sixth of our
people are planning to retire within the next five years.”
JOIN THE CONVERSATION
at RIMS on Twitter.
Use the hashtag
#RIMS2013.
8
RIMS 2013
BUSINESS INSURANCE
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13bi0125.pdf
BE R M U D A S I N G A P O R E S W I T Z ER L A ND U N I T E D K I N G D O M U N I TE D S T A T E S
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Leslie Lamb
Leslie Lamb is San Jose, Calif.-based director of global risk management for Cisco
Systems Inc. and a member of the Risk & Insurance Management Society Inc.’s board
of directors. She recently spoke with Business Insurance Senior Editor Judy Greenwald
about the cyber risk challenges facing risk managers. Edited excerpts follow.
Q
A
What are the biggest cyber risk challenges
facing risk managers?
This is a very large challenge facing all
companies. It’s a pervasive issue for all of
us. The landscape is changing, due to
advanced persistent threats and the other
issues that are out there which we’re all facing, so it’s very difficult to stay on top of this
particular risk. With 85% of
the data breaches not discovered for weeks, it’s not a matter of if, but when, for all of us.
If we aren’t all addressing
this issue, and managing
within our companies and
between them, we are all
impacted. As Robert Mueller,
the director of the FBI, said,
“There are only two types of
companies; those that have
been hacked and those that will be.’’ This is an
issue for our government, as well as others, to
work to set standards and policy.
Q
How should the risk manager gain the
cooperation of other departments, such as
information technology and human resources,
in dealing with cyber issues?
A
I certainly believe that cross-functional
work is very important. We all come with
different perspectives. All perspectives are
valid, and all are needed. Working to set the
standards within the company and enforcing
those standards is critical. I also think the
issue needs to be built into all business continuity plans, so when or if something does happen, everyone knows what he or she needs to
10
RIMS 2013
BUSINESS INSURANCE
do and which system or processes are critical for the company.
About a year ago, the World Economic
Forum cited some principles for cyber security which I believe should be universal. These
are: The organization recognizes the interdependent nature of our hyper-connected world
and its own role in contributing to a safe,
shared digital environment; the executive
management team recognizes its leadership
role in setting the tone and structure for cyber
resilience; the organization recognizes the
importance of integrating cyber risk management within its broad risk processes and in
line with these principles and guidelines; and
finally, the organization
encourages its suppliers to
adopt these principles and
guidelines.
Q
What legislation, if any,
would you like to see
passed on the federal level in
relation to cyber issues?
A
At the start of his administration, President Barack
Obama declared that the cyber threat is one of
the most onerous economic and national security challenges we face as a nation. He stated
that the administration is committed to an allof-government approach to reducing cyber
threats while improving our resilience to cyber
incidents. This issue has to start with the government to help set standards.
In his executive order, it stated that the secretary of Homeland Security shall use a riskbased approach to identify critical infrastructure where a cybersecurity incident could reasonably result in catastrophic regional or
national effects on public health or safety, economic security or national security. The secretary shall apply consistent, objective criteria in identifying such critical infrastructure.
The risk-based approach described in Presi-
dent Obama’s executive order seems to me
to be the best approach and one that we as
risk managers are really very familiar with.
In our hyper-connected world, I believe the
adoption of business standards associated
with information systems around the world is
very important and would help promote all of
our shared goals of economic stability and
prosperity.
Q
A
How can risk managers balance cyber
security with employee privacy concerns?
Q
A
What should risk managers be looking for in
seeking cyber coverage?
Employee privacy — and privacy of everyone for that matter — including customers,
vendors, partners, etc., should be of utmost
concern. I believe this starts at the point of
each of our companies driving awareness,
education, policies and standards. And people
need to be held accountable.
Risk managers should be looking to their
partners, including brokers and insurance
carriers, to, No. 1, help address and understand their exposures and, No. 2, follow best
practices and to help educate on worst-case
scenarios.
If people don’t see how their companies
could potentially be affected, it’s difficult to
imagine or know what could happen.
Beyond that, I believe coverage should be a
catastrophic-type cover but should be very
broad-based. If a cyber incident does occur,
they need to address the gaps and how to prevent it from occurring again.
Some of the specific coverages that I think
should be addressed include network security liability; privacy liability; regulatory
defense and penalties; privacy event management; cyber extortion; information asset
loss; and first-party network business interruption system failure.
RESILIENCE NEVER QUITS.
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MUSIC CENTER OF LOS ANGELES COUNTY
TUESDAY, APRIL 23, 2013
LOCAL
FLAVOR
ENGINE CO. NO. 28
American
644 S. Figueroa St.
Los Angeles
213-624-6996
www.engineco.com
The Walt Disney Concert Hall, designed by architect Frank Gehry, is home to the Los Angeles Philharmonic.
the
SIGHTS
A
12
RIMS 2013
the Los Angeles Convention Center,
the Walt Disney Concert Hall is a
must. Designed by architect Frank
Gehry, the home to the Los Angeles
Philharmonic offers guided and
self-guided tours most days from 10
a.m. to 2 p.m.
For details on the Getty Museum
and the Walt Disney Concert hall,
visit www.getty.edu/visit and
www.laphil.com, respectively, or
contact the Getty Museum at 310440-7300 and the Walt Disney
Concert Hall at 323-850-2000.
HUNTINGTON LIBRARY, ART COLLECTIONS
AND BOTANICAL GARDENS
SPIRIT OF AMERICA/SHUTTERSTOCK.COM
lthough it may be modeled
after the Romanesque and
Gothic castles of Europe, the
architectural highlight of southern
California is probably not
Cinderella’s Castle at Disneyland.
Los Angeles is home to many
historic and visually stunning
landmarks, including the J. Paul
Getty Museum, located in the Santa
Monica Mountains. Devoted to
European and American art, the
modern-style complex stands apart
in its own right, and that’s not even
mentioning its views of both the
city and the San Gabriel Mountains.
Architectural tours are offered
throughout the day Tuesday
through Sunday. However, if the art
and culture of ancient Greece,
Rome and Etruria seems more
enticing, the Getty Villa in Malibu,
Calif., also offers free entry, but
advance timed-entry tickets are
required.
For an experience a little closer to
BUSINESS INSURANCE
True to its name, this building was
an active fire station from 1913 to
1969. Today, Engine Co. No. 28,
which is located in the station’s
apparatus room where the
firetrucks were stored, offers a wide
variety of traditional American fare.
The restaurant still has the original
red brick flooring, 18-foot-tall
pressed-tin ceilings and mahogany
cabinetry that housed its alarm
system.
1151 Oxford Road
San Marino, Calif.
www.huntington.org
This library and museum is home to rare books,
manuscripts, prints and artworks dealing with
American and British history, including the
Ellesmere manuscript of Geoffrey Chaucer’s
“The Canterbury Tales” and original letters from
George Washington and Abraham Lincoln. But
Huntington’s botanical gardens are the real
showstopper. With 120 acres open to visitors,
the grounds are divided into 14 principal areas.
Visiting botanists should make sure to see the
rose garden, which was created in 1908.
THE MUSSO
& FRANK GRILL
Seafood/Steakhouse
6667 Hollywood Blvd.
Hollywood, Calif.
323-467-7788
www.mussoandfrank.com
Since opening in 1919, the Musso &
Frank Grill has been a favorite
hangout for celebrities such as
Charlie Chaplin, Greta Garbo,
Humphrey Bogart and Marilyn
Monroe. Even writers F. Scott
Fitzgerald, William Faulkner and
John Steinbeck were regulars. The
menu has gone mostly unchanged
through all that time, but be sure to
give the bar’s legendary martini a
try.
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Wilton, ct t Atlanta t Chicago t Dallas t Irvine
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Claims t Valuation t Forensics t Risk Consultation
se e us at r i ms 2 0 13 booth # 5 13
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TUESDAY, APRIL 23, 2013
College Student Snapshot:
James Heuker
What was your experience like
last year at RIMS?
It was incredible. RIMS is
unlike anything I’ve ever been
to. It’s probably 10 times larger
than any of those other
conferences I’ve been to, so a
very eye-opening experience,
but a great learning experience.
They really take care of the
students and make sure that
there’s someone always there to
answer your questions, and they
really do a great job of just
making sure that students really
get the most out of their
experience.
Is there anything in particular
you’re looking forward to
checking out this year?
The networking events are
kind of a big staple of RIMS, as
well as the educational sessions,
I think that’s where I really
learned a lot, as well as the
networking with other students.
I know quite a few students,
because I’m international
student rep of Gamma Iota
Sigma, and I sit on the RIMS
student advisory council
committee, too. We really kind
of create a friendship, and that’s
what Gamma Iota Sigma is
about as well. It’s kind of a big
family. And I’ve got friends all
across the country, and these
are the people that I’m going to
be working with in the industry
for the next 30 to 40 years.
What are your plans after
graduating?
Right now, I’m still
interviewing, so I’m not sure
what side of the insurance
industry I’m going into. I’m
looking at the broker side right
now, as well as the carrier side.
I’d like to go into commercial
underwriting.
In just a few short weeks, James
Heuker will graduate from Olivet
College in Rockford, Mich., with a
bachelor’s degree in insurance and
risk management with a minor in
claims. As president of Olivet’s
Gamma Iota Sigma chapter, he’s
been able to visit many industry
conferences, including RIMS. He
told Anna Gaynor of Business
Insurance that he’s particularly
excited about his second trip to
RIMS. Edited excerpts follow.
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APRIL 22
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SOCIAL
Continued from page 4
Yet companies can also lean too
much on the side of caution. Ms.
Bachman cited the case of the
nonprofit Hispanics United of
Buffalo Inc., which fired five
employees in 2010 after they took
to the social network Facebook to
complain about a fellow employee, Lydia Cruz-Moore. Unbeknownst to the posters, Ms. CruzMoore was Facebook friends with
one of the complainers, enabling
her to monitor the conversation.
The fired employees filed a complaint with National Labor Relations Board, which ultimately
ruled in their favor. The case
showed that employers have limited ability to police the online
speech of employees that are off
the clock, Ms. Bachman said,
adding that the case also may
have taught the fired employers
a valuable lesson. “Nothing is private on social media sites, unless
you have no friends,” she said.
Max Perkins, underwriter of
specialty lines at Beazley Group
agreed employers and employees
alike need to realize that social
media posts and text messages
are indelible. “Everything is discoverable,” he said.
Joann Lytle, a partner in
Philadelphia at law firm McCarter
& English L.L.P., said while traditional general liability coverage
may indemnify companies
against instances of libel and slander, companies would be wellserved to review their policies.
Mr. Perkins said his company
was creating specialized media
content liability coverage to help
insureds with the risks surrounding social media. He added
that risk managers need to be
cognizant that even innocuous
slip-up can have damaging
effects on a company’s brand reputation.
SINEK
Continued from page 4
parents, who discipline their
children when necessary but
also work to develop strong
bonds with their children and
sacrifice to help their children
succeed.
“Your business is not ‘like a
family,’” Mr. Sinek said. “It is a
family. All the rules are the same.
You have to give the same love
and devotion to the people in
your care as you do for the children in your care.”
And building relationships
with people in your care takes
more than words, Mr. Sinek continued.
It takes a leader’s time, energy
and appreciation for an employee’s contribution to the team, he
said. A leader’s generosity can
actually cause employees to
release the chemical oxytocin,
which motivates people to help
each other, including in the
accomplishment of company
goals, he said.
“This is really important,
human generosity and looking
after each other,” Mr. Sinek said.
But there is a chemical imbalance in the modern workplace
that is eroding cooperation as
companies place greater emphasis on meeting goals and reaching
metrics, he added. That is driving
individuals to focus on their own
success rather than the group’s
good.
”We don’t talk to each other
anymore, we don’t work together
anymore, we don’t help each
other anymore,” he said. That
weakens organizations, he
added.
In contrast, studies show that
people feel better about themselves and their employers when
they are encouraged to do the
right thing by helping each other
succeed, Mr. Sinek said.
Not a member?
Visit RIMS Hub at #1021
and learn how you can
join for only $100
plus applicable chapter dues
BUSINESS INSURANCE
RIMS 2013
17
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LEADERS
Continued from page 1
scend national boundaries,” she
said.
She cited such RIMS efforts as
the society’s annual enterprise
risk management conference, its
strategic risk management implementation guide and its legislative activities promoting such initiatives as extension of the federal terrorism reinsurance backstop and the National Flood Insurance Program as examples of the
various ways the organization
helps members do their jobs better and advance their careers.
RIMS President John Phelps,
director of business risk solutions
for Jacksonville, Fla.-based Blue
Cross and Blue Shield of Florida
Inc., outlined the development of
risk management from an insurance-buying focus to the enterprise risk management and
strategic risk management
approaches taken by an increas-
RIMS President John Phelps urges
members to take an interest in the
next generation of risk managers.
ing number of organizations
today.
“At each stage, we’ve become
more and more involved in the
critical decisions that ensure our
companies’ success,” Mr. Phelps
said. And as more organizations
embrace risk management, there
are more and more opportunities
for risk managers, he said.
RIMS can help risk practitioners
take advantage of those opportunities, Mr. Phelps said.“My career
in risk management has been a
journey of learning and discovery
guided from the very beginning
by RIMS,” he said.
“Today the risk management
profession is strong, diverse, full
of opportunity,” Mr. Phelps said.
“Some risk professionals will continue to focus on insurance — the
root of our profession. Others will
focus on enterprise risk management and strategic risk management.”
Some will move into other areas
of organizations, such as finance
or marketing, Mr. Phelps said,
while others will use risk management “as a springboard to the
C-suite.”
As both a risk manager and a
RIMS leader, Mr. Phelps said he
has a special interest in the next
generation of risk professionals,
an interest he asked other RIMS
members to share. “To ensure
that risk management continues
GOODELL
Continued from page 1
ground includes speaking at
dozens of events, appearing on
radio and TV shows, and authoring hundreds of articles and texts
on risk management, insurance
and contractual risk transfer,
according to the presentation
heard by attendees at Monday’s
awards luncheon.
The Richard W. Bland Memorial Award was presented to Janet
Kerr, vice president of risk management at Boston-based Boston
Properties Inc., a real estate
investment firm.
The award recognizes those
with a dedicated commitment in
the area of legislation or regulation.
The Ron Judd “Heart of RIMS”
Award was given to two recipients: Scott B. Clark, risk and benefits officer of the Miami-Dade
18
RIMS 2013
Daniel W. Houston, center, accepts the Goodell Award from RIMS
Executive Director Mary Roth and RIMS President John Phelps.
County Public Schools and former RIMS president, and Karin
McDonald, Toronto-based director of risk and insurance for
Hydro One Networks Inc.
The award, which is given in
honor of Mr. Judd, who served
BUSINESS INSURANCE
as RIMS’ executive director for 22
years, is given to individuals
nominated by their chapters for
outstanding performance in furthering risk management at the
chapter level.
Mr. Clark was given the award
to thrive, it is essential for us to
present a vibrant vision of the
future,” he said.
In bringing the next generation
into the profession, however,
“some important questions
remain,” Mr. Phelps said. “How
will we pass the collective knowledge and wisdom of my generation?”
“A big part of the answer lies in
RIMS,” the society’s president
said. Mr. Phelps challenged
young risk professionals to
involve themselves in local RIMS
chapter leadership and national
RIMS committees. “We need your
energy and your insights,” he
said.
The RIMS president also challenged his generation of risk professionals to embrace and assist
people new to the profession. “I
believe that veteran risk practitioners like myself have a special
responsibility to guide our
younger colleagues and to create
an environment in which they
want to become involved,” he
said.
for his work with the RIMS
Greater Miami Chapter, while
Ms. McDonald was given the
award for her work with the
RIMS Ontario chapter.
The Cristy Award, which is
given to the individual who
earned the highest marks on
three exams required to earn the
Associate of Risk Management
designation was awarded to Ed
C. Mitchell, director of risk management for Wilmington, Calif.based Metropolitan Stevedore
Co.
In addition, Business Insurance
Editor Gavin Souter presented
the 2013 Risk Manager of the
Year® Award to Lori J. Gray, risk
management division chief for
Prince William County, Va.
Awards were also given to individual RIMS chapters for outstanding programming and conferences, advancing the risk management profession, outstanding
member services and membership growth.
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MARSH
Continued from page 3
prior to the press conference.
In particular, both the C-suite and
risk professionals identified training
and education, strengthening enterprise risk management capabilities,
and improving use of data and analytics as the top three areas of focus
for developing their organizations’
risk management capabilities in
2013, the survey found.
“But when you dive deeper, you
can still see the disconnect,” Ms.
Connor said. “The C-suite would like
risk managers to pursue an evolution from managing the budget of
insurance and claims expense to a
more strategic enterprise view of
risk management. But some risk
managers are uncomfortable with
SANDY
Continued from page 3
last fall, Ahold initially anticipated
wrapping up claims by June of this
year, but that most likely will not
happen, Ms. Christman said.
The company suffered $31 million
in product losses across 202 stores
as a result of storm damage. The
most product spoiled in one location
cost Ahold $1.7 million. Four grocery
stores in New York and New Jersey
flooded, and a roof collapsed at
another location.
Among other losses, 32 stores
were closed for safety and had to
hire extra labor to clean up and dispose of waste and spoiled products,
costing Ahold $3.8 million.
Most of the Sandy losses were an
“administrative nightmare,” panelist Paul D. McVey, New Yorkbased managing director of national claims at Marsh USA Inc. said
during the session.
Marsh saw 1,400 Sandy-related
claims, of which 600 were global risk
management losses of up to $5 billion, he said.
“What we found out from Sandy
was that the size and complexity of
the claims were very large,” said
that because it involves addressing
some risks that may be uninsurable.”
“The challenge is for risk managers to become more engaged in
operations and to become strategic
advisers to the C-suite,” Ms. Fox
said.
“If risk managers back themselves
into the corner by focusing on managing contracts, procurement does
the same thing,” Ms. Connor noted.
They could risk being perceived as
redundant in their organizations,
she said.
“A lot of risk managers don’t know
how to describe the value they bring
to their organizations,” Ms. Fox said.
As a result, they often are stereotyped as being “transactional”
rather than “strategic,” she said.
“If risk managers don’t speak the
language of finance, they’re not in
the game,” Ms. Connor said.
panelist Ken Giambagno, New
York-based managing director and
global practice leader, financial
advisory services, at Marsh Risk
Consulting.
“Claims are larger than anticipated,” he said. “Five to six months
after Sandy hit, the numbers are
going up, not down.”
Ahold has a planning and crisis
management team that includes a
24-hour call center that records all
activity during power outages, property damage and other damages to
its locations, Ms. Christman said.
“You need to make sure you have
quick and accurate information,”
she said, noting that during the
storm, the call center’s information
gathering was able to provide
Ahold’s executive team with realtime updates on its locations.
As far as the claims process, Ahold
held face-to-face meetings with
insurance underwriters and quickly
engaged the insurer’s consultants
during the tropical storm to ensure
visibility and communications.
Additional lessons learned from
Sandy included long-term power
outages that prevented stores from
follow crisis plans, and fuel shortages that hindered managers’
efforts to drive to the company’s
stores to quickly assess damages.
BUSINESS INSURANCE
RIMS 2013
19
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Debbie Bonacci, Fleet Response; and Michael Michael McCloskey, Fox School of Business,
Bonacci, regional sales manager, Fleet
Temple University; and Noelle Codispoti,
Response.
executive director, Gamma Iota Sigma.
Brittany Miller, sales representative, Medata;
and Eddie Del Canto, manager, business
developement, Medata.
Carol Murphy, Aon; Joanne
Wojcik, Business Insurance; and
Grace Crickette, risk manager,
University of California.
Katie Toia, senior account manager, SNL Financial; and Sheryl
Neths, senior account manager, SNL Financial.
20
RIMS 2013
BUSINESS INSURANCE
Carolyn Snow, director, risk management,
Humana; and Judith Camp, vice president
of risk management, Concentra.
www.BusinessInusrance.com/W2W2013
DEAD
LINE
FO R N
OMIN
ATION
S
JULY
31
2013
LEADERSHIP WORKSHOP
AND AWARDS LUNCHEON
SAVE THE DATE
December 3, 2013
New York Marriott Marquis
Do you know a woman who deserves to be recognized
for her outstanding contributions to your organization?
Nominate her for the2013 Women to Watch Award.
Nomination deadline July 31, 2013
For sponsorship and event information, please contact Susan Stilwill,
Advertising Sales Director, [email protected],
or call 312-649-5224 or Martha Donato, Director of Events & Brand
Marketing, [email protected], or call 845-545-0653
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IN BRIEF
Continued from page 1
disability insurance policyholders because it did not spend
at least 60% of its total
premiums on benefits, New York
Gov. Andrew M. Cuomo said
Monday. The refund involves
New York insurance policies that
replace part of workers’ wages
when they are disabled by
pregnancy or an off-the-job
illness or injury. The coverage is
part of New York’s workers
compensation system, and the
state requires insurers to use the
majority of premiums for claim
payments, Mr. Cuomo’s office
said.
Most N.Y., N.J. claims arising
from Sandy have been settled: III
Ninety-three percent of the
claims in New York and New
Jersey arising from Superstorm
Sandy have been settled, the
Insurance Information Institute
Inc. said Monday. The insurance
industry-supported organization
said that Sandy generated about
1.5 million claims, more than
half of which were filed by
homeowners. The institute
further noted that the more
than 200,000 claims filed by
businesses accounted for only
13% of all claims, but they “will,
in the end, account for 48% of
all the Sandy claim dollars
paid.”
RIMS 2013 VIDEO
For more on the conference,
check out Business Insurance’s
daily RIMS 2013 videos at
www.businessinsurance.com/video.
AROUND THE HALL
EXHIBITORS AT RIMS
offered various activities
and attractions at their
booths Monday to lure RIMS
attendees. Clockwise from
the top are: Belfor Property
Restoration, Riskonnect,
author Simon Sinek signing
books at the RIMS booth,
and Misty May-Treanor
demonstrating her serve at
the Liberty Mutual booth.
Publisher/General Manager,
Strategic Business Media:
Mark Stach (Chicago)
Associate Publisher/
Online General Manager:
Paul D. Winston (Chicago)
Editor: Gavin Souter (Chicago)
Editor-at-Large: Jerry Geisel (Washington)
Managing Editor:
Paul Bomberger (Chicago)
Assistant Managing Editors:
Charmain Benton (Chicago);
Aranya Tomseth (Chicago)
Art Editor: William Murphy (Chicago)
Senior Editors: Roberto Ceniceros (Boise);
Judy Greenwald (San Jose);
Mark A. Hofmann (Washington);
Sarah Veysey (London);
Joanne Wojcik (Denver);
Rodd Zolkos (Chicago)
Associate Editors:
Matt Dunning (New York);
Sheena Harrison (Chicago);
Bill Kenealy (Chicago);
Mike Tsikoudakis (Chicago)
Copy Desk Chief:
Katherine Downing (Chicago)
Copy Editor: Ann Reus (Chicago)
Video Producer/Copy Editor:
Anna Gaynor (Chicago
Director of Research:
Angelina Villarreal (Chicago)
Editorial Cartoonist:
Roger Schillerstrom (Chicago)
Advertising Sales Director:
Susan Stilwill (Chicago)
Regional Sales Managers:
Ron Kolgraf (Boston); Robert B. Murray
(New York); Mary Pemberton (Denver)
Southeast & Classified
Advertising Manager:
Monique Murray (New York)
Production Manager:
J. Thomas Janka (Chicago)
Assistant to the Publisher:
Justine Karl (Chicago)
Director of Events and Brand Marketing:
Martha Donato (New York)
Audience Marketing Director:
Michelle O’Malley (Chicago)
Director of
Demand Generation Services:
Steve Susina (Chicago)
Marketing Manager
Kathy L. Barnes (Chicago)
Digital Product Manager:
Christina Kneitz (Chicago)
EDITORIAL: Boise: 208-286-1425;
Chicago: 312-649-5200;
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London: 44-207-457-1400;
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Business Insurance is published by
Crain Communications Inc.
Crain Communications Inc. Board of Directors
Chairman: Keith E. Crain
President: Rance Crain
Treasurer: Mary Kay Crain
Cindi Crain
Executive Vice President/Operations:
William A. Morrow
Senior Vice President/Group Publisher:
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Vice President/Group Publisher:
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Dave Kamis
Chief Information Officer: Paul Dalpiaz
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Merrilee P. Crain: Secretary (1942-2012)
S.R. Bernstein:
Chairman-executive committee (1907-1993)
PHOTOS BY MICHAEL MARCOTTE
22
RIMS 2013
BUSINESS INSURANCE
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