At the Crossroads

Changes are afoot in risk management – changes in the role risk managers play, changes in the understanding they need and changes in the ever-expanding, ever-evolving risk landscape.

“We consider changing landscapes to be a business reality in our global marketplace, whether it is technological changes, regulatory, environmental, social or economic,” says Bev Duthoit, director of corporate insurance and claims at Manitoba Telecom Services Inc., and co-chair of the 2014 RIMS Canada Conference, the theme of which is Crossroads.

The theme is not only reflective of the changing risk landscape, but also of the city in which the event takes place this September.

Winnipeg, at the centre of Canada, is positioned as one of the strongest economies in Canada, notes Valerie Barber, manager of agency claims and loss prevention for the Province of Manitoba, and conference co-chair.

But the city is no stranger to risk and its related impact. Its history is ripe with a concern on many risk radars today – flooding.

Consider the Red River Floodway – so-called Duff’s Ditch, spearheaded by former Manitoba Premier Charles Dufferin Roblin – which, after the devastating 1950 flood, was constructed from 1962 to 1968. Overall, reports the Red River Floodway Expansion Project, the flood caused about $125 million in damages (estimated at $1 billion in today’s figures).

Since first used in 1969, the floodway – which during flood periods, diverts part of Red River’s flow around Winnipeg to the east before discharging back into the river – has been operated more than 20 times and prevented over $10 billion in flood damages, the project reports.

“I think Winnipeg can be looked to as the model for flood protection of a major city,” suggests Duthoit, a past president of the Manitoba RIMS Chapter, who has also served as secretary, treasurer and board member.

CHANGING NOW

But it is not just about now; it is also about looking to – and being prepared for – the future. “We want to deal with issues that are happening now, as well as looking to the future to see what’s coming down the pipe that all of us are going to have to deal with at some point,” Duthoit says of conference offerings.

Changes will include shortening some sessions to ensure that delegates have more choice, allowing them to supplement or enhance their existing knowledge.

A very short list of issues risk managers are expected to face in future includes those related to technology, storing information in the cloud and the geopolitical climate.

Citing the last issue, “that can create huge impacts, especially to your supply chain management,” notes Barber, past RIMS Manitoba Chapter president, who has also held positions as secretary, treasurer and vice president.

Then, of course, there is the issue of climate change and severe weather. “Across Canada, the winter that we’ve had this year is creating all kinds of issues not only from a claims perspective with the property damages, but also how do you deal with that? How are you managing it?” Barber asks, adding that the implications are far-reaching.

“Climate change is actually a big one that shows real-time effects,” Duthoit notes.

“We have to deal with the climate that we have now, but we also have to prepare and try and understand what the predictions are for what’s going to be down the road five, 10 or 25 years. If you’re building a new building, you need to consider whether you’re all of sudden going to be in a floodplain, even though you weren’t in a floodplain 25 years ago.”

CHANGING ROLES

These changes are influencing risk management generally, but also more specifically the role that risk managers are expected to play now and in the future. “The demands on a risk manager are ever-increasing,” Duthoit suggests.

With regard to changing risks around technology, for example, a risk manager “has to understand the IT world, the whole focus of storing information in the cloud and the implications that has to each and every business that wants to consider that as an option,” she points out.

“You have to know a little bit more about a lot more things,” Barber offers.

“Originally, a lot of the focus (of risk managers) was working on the insurance program for the corporation or managing claims,” Duthoit reports. “But the business of running an organization requires looking strategically at the whole organization and how things are happening. Typically, that’s done by the C-suite of the organization, but I think the risk management position has developed a lot more in terms of supporting the executive by sharing information they come across in their daily jobs.”

The risk manager has to keep an open mind, be flexible and “be able to adapt to new ways of thinking about risks, as well as managing them,” she says. Barber concurs, adding that it is not only important to be current and engaged, but also to not be afraid to ask questions.

Events that afford networking opportunities allow risk managers to build a base of individuals whose expertise can be tapped, she suggests. “Know what you know, and know what you don’t know.”

CHANGING DUTIES

Handling the very big task of serving as conference co-chairs has been welcomed by Duthoit and Barber. The job has been made somewhat easier because, having known one another for some time, the two work well together and share a common vision.

Duthoit and Barber have also been served by past experience – paying and not.

Duthoit, who graduated with a commerce honours degree, began at Aon Reed Stenhouse as a property marketing broker in the early 1980s. While there, she worked in marketing, surety and account management. “That, in my opinion, is the best way to learn a lot about insurance and the insurance business.”

Duthoit – who holds CIP, FCIP and Canadian Risk Management (CRM) designations – joined what is now MTS Allstream in the early 1990s, working first in its finance group and later moving back to insurance.

Barber would characterize herself as having fallen into the industry right after finishing an accounting program at Red River College. She began with Canadian Pool Agencies Limited/Pool Insurance Company, a unique situation that provided her an opportunity to work for an insurance agency and an insurance company at the same time.

While there, she signed up for what is now the CIP, obtaining her designation, before moving on to independent broker, Hayhurst Elias Dudek Inc., as a claims examiner in 1990 and working her way up to claims manager.

Barber, who among others holds FIIC, CRM and Canadian Institute of Management designations, joined the Manitoba government in 1999.

“The thing I’ve taken away from my positions with claims is that it gives a unique perspective. It’s an opportunity to see what has gone wrong, what you can prevent from happening in the future, and also what has worked.”

That perspective is also welcome in risk management. “The risk manager can’t know everything about every process, every product, every system within an organization, but their job is to develop information networks within an organization so that they have an opportunity to leverage all of the knowledge out there and focus it into what they’re looking to do, which is basically manage the risks of the organization,” Duthoit says.

It is helpful if everyone does their part, Barber says. “Ideally, if everybody is a risk manager within their organization, you’re more apt to clue in more quickly as to what it is that’s missing or where the gaps are.”