Quality Time Together

In keeping with the cyclical nature of the insurance market, incoming president of the Risk and Insurance Management Society (RIMS) Michael Liebowitz will return, full circle, to the exact place where he began his RIMS journey.

In New Orleans, Liebowitz attended his first RIMS conference as a member in 1991. “I was so impressed at the multitudes of people all gathered for the same purpose, under the risk manager banner, wanting to hear the RIMS president speak,” he recalls.

Once again, in 2007, he expects to be impressed by masses of risk managers gathered in New Orleans for the annual RIMS conference. But this time, it isLiebowitz, wearing the hat of RIMS president, they will be coming to hear.

Launching his year as RIMS president, Liebowitz plans to stand on a solid platform of service excellence. He plans to towards the goal of enhancing the risk manager’s role through positive change.

“There’s an outcry for change and the time is now,” Liebowitz says. “It’s clear that the insureds and the regulators will not let the insurance industry move forward the way they have in the past.” Liebowitz believes positive change can be accomplished by adopting consensus-driven guiding principles that will address the current deficiencies that prompted recent, industry-wide scandals.

QUALITY SERVICE

Liebowitz says in order to deal with service inadequacies highlighted by the Spitzer investigations, risk managers must work to develop global industry standards and guidelines that will promote quality service.

“Spitzer was the catalyst inciting a reaction that will move the insurance industry forward,” Liebowitz says.

One of his first initiatives will be to establish guiding principles for the insurance industry, as defined in RIMS’s Quality Improvement Program (QIP) for the risk management and commercial insurance industry. The QIP has three central components – guidelines for performance expectations, learning resources and performance measurement – that are based on the principles of integrity, transparency and client- centricity.

In order to develop sound guiding principles, Liebowitz says risk managers, brokers and insurers must develop open lines of communication and provide each other with feedback regarding service roadblocks and difficulties.

Initiating this industry-wide dialogue, RIMS is hosting its Quality Forum on Mar. 22, 2006, in New York City. This event is the first meeting of what Liebowitz expects will be a series of initiatives geared towards adopting the tenets of the QIP. The forum is meant to promote interactive dialogue and set expectations for an organization’s risk management program.

“My focus is to reach agreement amongst those three sectors – risk managers, brokers and insurer communities – and make sure we are all on the same page.”

“We all [need to] have a very clear understanding of what the expectations [are] to improve business practices and move forward,” Liebowitz says. “We hope to develop industry-wide guidelines and understanding.”

Liebowitz hopes the forum will generate discussion about contract certainty and policy expediency, two of the major issues currently frustrating risk managers.

PERFECTING POLICY PROCESS

Risk managers say the 30-day standard for receiving a policy is a fallacy. “As simple as it sounds, I don’t think anybody has been able to say on an industry-wide basis they can produce a flawless policy in 30 days,” Liebowitz says. “This has always been an issue that risk managers have been upset about.”

The concern, he says, is that if a risk manager purchases a policy before reviewing it, and changes are made to the policy wording, then the risk manager really does not know what is covered. “You need to have the policy in hand to understand what your coverages are,” Liebowitz says. “And although we’ve set up principles and guidelines to address this, we haven’t gotten the industry to adhere to them as a whole.”

This is an underwriting issue, Liebowitz acknowledges, but he adds that the inadequacies surrounding contract certainty and expediency cannot be entirely blamed upon one entity.

“All sides must work toward certain efficiencies to make this a 30-day process – from production, to review, to payment and all the way to the claims process.”

Liebowtiz hopes the performance expectations initiative will enhance the broker and risk manager client relationship. In order to perfect the policy process, Liebowitz believes the broker should be knowledgeable and understanding about the client-company’s industry and its philosophy on accepting and transferring risk.

“We hope to develop an industry-wide guideline and understanding to get to the point where brokers routinely review the client’s annual report and audit financials, participate in the analysis [of the information], as well as [participate] in Web-casts, conference calls and quarterly meetings reviewing the client’s operations.”

Liebowitz believes service and performance excellence standards are key to moving the risk management industry forward. The next steps will be announced when risk managers meet in Honolulu this April for the annual Risk & Insurance Management Society (RIMS) Conference.

Hot topics at the Honlulu conference this year include catastrophic events, the importance of preparedness and adapting to changing market environments. “A lot of the regulatory issues are behind the industry and now all of our business troubles of last year are being replaced by weather-related losses,” Liebowtiz notes. The topic of terrorism risk management will also be discussed.

ENTERPRISING IDEAL

The RIMS initiative to promote enterprise risk management (ERM) is designed to influence the way risk managers do business. “What needs to be done is promotion of the ERM methodology and the understanding of advancing the risk management profession through ERM at the level of individual organizations,” Liebowitz says.

Not only will ERM have its own separate track of almost a dozen sessions at the RIMS conference, it will also soon have its own Web-based educational resource. RIMS plans to establish an online Center of Excellence that will offer risk managers a wide variety of ERM information and resources available at one site – including tools and guidance about best practices, standards and self-evaluation, as well as announcements on upcoming seminars. Liebowitz says the organization is in the process of implementing RIMS Fellow workshops on ERM, slated for sessions in Winnipeg, Seattle and Houston.

Liebowitz stresses the importance of taking the network approach to understanding ERM. “Our (RIMS) job is to make sure that our members are thoroughly educated on how to go about trying to implement it (ERM),” Liebowitz says. “Networking with risk managers that have ERM departments operating is where the greatest wealth is. Without networking, it would be very hard to operationalize the ERM process.”

ERM is represented by a distinct RIMS committee. As a result, the initiative is powered by a unique board-level voice that will bring to the forefront what needs to be done in order to make ERM a general function of the corporate structure.

SUPERB STRUCTURE

The addition of an ERM entity is only one recent change made to the RIMS board. “Our board structure is going through an evolution and right now we are in our transition stage,” Liebowitz notes.

Up until Dec. 31, 2007, RIMS’ fiscal year and its officers’ terms will be out of sync. Traditionally, the RIMS president would begin his or her term on May 1, while the RIMS fiscal year would begin on Jan. 1. In order to bring these two dates together, after Liebowitz’s presidential term – which begins on May 1, 2006 and ends April 30, 2007 – there will be an eight-month gap when there is no president.

RIMS will vote on how Liebowitz and his successor will govern the organization during the eight-month gap.

SUCCESSFUL EXPEDITIO N

Liebowitz has worn many hats since beginning his career in 1982, when he graduated from the New York Institute of Technology. Beginning his journey towards risk management as an outside claims investigator, Liebowitz first moved into the realm of health care and worked as an insurance specialist at the New York University Medical Center. But he still sought an organization to which he could streamline his focus.

“I embarked upon my current position at Bridgeport Hospital & Healthcare System Inc. as director of risk management,” Liebowtiz recalls. He says this was a perfect challenging opportunity as Bridgeport had never had a risk manager before. “I was given a clean slate, so I created the risk management department myself,” he says.

Throughout his 17 years at the organization, Liebowitz held various posts, including corporate compliance officer, director of safety, director of security and overseer of all regulatory compliance issues and traditional risk manager. “I’m the guy the board comes to when they have a problem,” Liebowitz says.

Throughout the years, while building and growing the Bridgeport risk management sector, Liebowitz has developed three risk management information systems to address the company’s problems. Liebowitz has also been an active member of RIMS on both the chapter and the national level, has served on the board of directors and was the president of the Fairfield/Westchester RIMS chapter for the past five years.

Now, taking his turn at the international risk management helm, he will don his captain’s hat and focus his attention on the direction he hopes to take RIMS – towards “a new dimension that will help advance the profession so that, ultimately, risk managers will have a permanent seat in the board room.”