Controlling Risk and Loss

For Tino Brambilla, RIMS Canada Council’s new chairman, fulfilling his aspiration of becoming a risk manager was at least a decade in the making.

Eleven years, to be exact. Brambilla started his career in Canada’s risk and insurance industry in 1978 as a loss control representative for Insurers Advisory Organization Inc. (IAO). In his role at IAO in Manitoba, he had various dealings with risk managers, loss control officers, underwriters and mechanical engineers; these experiences convinced him to try his hand at becoming a risk manager.

“In 1986, I was golfing with a friend of mine, John Rislahti,” Brambilla recalls. “He told me he was leaving Inner City Gas, and that his [risk management] position was going to be advertised in the Globe and Mail the following week. So I applied for his position and wasn’t successful at it. Ironically, 11 years later, a position became available at Centra Gas in the risk management role, and I applied for it again. I was successful. I waited 11 years [to] finally land a risk management role.”

Why the interest in risk management? After all, with a degree in Mechanical Engineering Technology from Red River College in Winnipeg, Manitoba — not to mention 19 years of loss control experience — Brambilla appeared set for life in the field of loss control.

Risk management courses explained part of the interest. Brambilla completed an Associateship at the Insurance Institute of Canada in October 1984. The 12-course program provided an in-depth understanding of the Canadian property and casualty insurance industry. Brambilla went on to receive a Canadian Risk Management Diploma in 1992, and completed the Insurance Institute of Canada’s Fellowship program in January 1994.

“Once I started taking some of those Fellowship courses, one of the majors in the fellowship was risk management, so that was the direction that I went on,” says Brambilla. “After that, I thought I would like to get into an actual risk management role.”

Many risk managers say they stay in the business because of the variety of challenges they face. Brambilla, in contrast, got into the business because it gave him a chance to narrow in on specific risks. In loss control, he says, “I was always on what I will call the periphery of risk management. In a loss control, you are in a different occupancy all of the time. You never really get to wrap your arms around one particular industry. Loss control reps, for example, might be at a steel mill one minute, and a lumber plant or an institutional property the next. That’s very interesting, the diversity, but you tend not to become an expert in one area.”

Brambilla made the shift to risk management in March 1997, when he joined Centra Gas. There, he managed the company’s facilities, risk/loss control and office and document services. His department had a $4-million budget and he had a staff of 15 people.

He stayed on as a risk manager at Manitoba Hydro after the Crown corporation bought up Centra Gas, a private company, in 1999. Brambilla has been with Manitoba Hydro ever since.

Brambilla said there was “absolutely” an adjustment in risk managing a Crown corporation compared to a private company. For one thing, unlike private companies, Crown corporations have a mandate that extends beyond simply maximizing shareholder value. For another, Manitoba Hydro had deeper pockets than most private companies and a different set of stakeholders. Also, Manitoba Hydro had reduced its liability insurance coverage to a ‘bare bones’ program during the liability crisis of the 1980s. “I came from an environment at West Coast Energy, which had a complete insurance portfolio, to one that …only had a property policy and at the time were ‘self-insured.’ [Qualifying his use of the term’self-insured,’ Brambilla observes that, unlike private companies, utilities have the ability to seek higher rates from ratepayers through regulatory applications, as opposed to transferring risk by means of purchasing insurance policies.]

“On the liability side, Manitoba Hydro had dropped all of their liability policies in 1987. So there were some differences there.”

During Brambilla’s tenure, Manitoba Hydro once again picked up its liability policies in 2000 and controlled costs by such measures as the use of higher deductibles. Around this time, in 2001, Brambilla joined the Manitoba chapter of RIMS Canada. He became the local chapter president in 2001. He first got involved in his work with the RIMS Canada Council in 2005. A retirement led to Brambilla becoming the RIMS Canada Council treasurer in January 2008. Just over a year later, the council’s vice chair resigned, and Brambilla stepped into the role. He succeeded Kim Hunton as RIMS Canada Council chair in January 2010.

In light of the resignations and retirements that brought Brambilla to his current position, Brambilla says the council’s focus during his term will be on building a solid volunteer pipeline. He notes commitment to RIMS Canada Council often requires at least five or six years of time; this comes at a time when risk managers are being asked to do more for their employer companies. Risk exposures have multiplied, as many risk managers note, and this has increased demands on their time from their primary employers. That makes it much more difficult for risk managers to put in a lot of volunteer hours.

“A RIMS Canada Council initiative is to try and develop a robust volunteer program,” Brambilla says. “Hopefully we can come up with something that has a good pipeline. There is a time commitment, no doubt. I think there are a lot of conflicting demands on our time, between our employers, our personal lives and our association life. It’s difficult to commit for a long period of time.”

The busy time for risk managers is amplified, if not caused, by the global financial problems experienced over the past two years. This is a key issue, Brambilla says.

“I can’t help but think that with the global financial meltdown that we’ve had, the return to economic viability is still the Number 1 issue,” he says. “Anything we can do in our role as risk and insurance managers to help our organizations get back to financial stability is first and foremost what needs to be done.”

Also, the issue of contingent commissions has bubbled to the surface once again. Recently, RIMS expressed disappointment at AON’s decision to explore accepting contingent commissions. This is not just a United States issue, Brambilla says.

Between the time contingent commissions were banned in New York and when they were later allowed once again, risk managers at utility companies in Canada reported that clients of one particular brokerage had been approached about their willingness to pay “enhanced” commissions. “There’s certainly an element of that in Canada,” Brambilla says. “It still is an issue out there. As a standing committee of RIMS, the RIMS Canada Council aligns itself with RIMS issues.”

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Anything we can do in our role as risk and insurance managers to help our organizations get back to financial stability is first and foremost what needs to be done.