Risk Roundup

Energy abounds in the heart of the ‘New West,’ where being a risk manager is anything but monotonous. The economy is beginning to boom in Calgary, and “living on the edge” is a literal reality for Marley Drainville and Joe Restoule, the co-chairs of the 31st annual RIMS Canada Conference. Drainville and Restoule are proactive in their approach to their careers, as well as their vision for the Calgary conference, scheduled for Sept. 17 – 20, 2006.

Sometimes as a risk manager you have to push the boundaries and “move to change,” according to Drainville, manager of risk management and insurance for Enerplus Resources Fund. This same ethic provides the inspiration for the conference theme: “Scaling the summit and achieving new heights in risk management.”

Drawing on their energy and enthusiasm, Drainville and Restoule, a senior risk consultant for Nova Chemicals Corp., have created a video to tell the Calgary conference story. The video stars the daring duo attempting what any forward-thinking risk manager would do: climb a mountain. “Having the Rocky Mountains as our backdrop allows us to promote the theme of achieving new heights,” Drainville explains. “In the video (see http://calgary2006.rims.org), as we try to climb the mountain, we are able to show that by supporting each other and working together, we can achieve new heights. This is what the conference focuses on: networking and changing what needs to be changed in order to grow and enhance our integrity.”

Drainville says this year’s conference offers a plenary and program that will “stimulate and challenge” the risk management professional. “We are going to raise the bar,” she says, adding that reputable speakers will provide out-of-the-box thinking that is essential in today’s risk management market.

The conference includes programs related to catastrophes in 2005, and features a line-up focused on future preparedness in uncertain times. There will be sessions on artificial intelligence and the future of risk management, as well as panel discussions on income trust liability, market risk, the oil sands, captives, areas of risk financing and measuring emerging capital.

Restoule says the conference plenary was designed to give attendees insight into issues and trends currently affecting the marketplace. “Our focus this year is [to offer] a lot of professional speakers, predominantly from the academic side, who have done a lot of work in the area of forecasting and predicting what the next uncertainty in risk might be,” he says. “For example, while we’re going to be talking about pandemics, we will concurrently be pondering what will be next. Is terrorism going to be prevalent, or will there be something new and unforeseen and how do we prepare for that?”

ROLE OF RISK MANAGERS

The big thing the industry is waiting on, according to Restoule, is what this year’s hurricane season will bring. Concerns about cat risks resulting from last year’s devastating storm season are addressed at the conference but have not dominated the focus; instead, there is a strong, underlying emphasis on full disclosure and transparency of information moving forward. In order to retain the value of the risk manager and insurer relationship, Drainville says, risk managers must be transparent about how they differentiate their risks and mitigate their losses partly in response to increasing weather severity and last year’s exorbitant cat losses.

“We have to provide some assurance to our insurers about the risk factors we can control,” Drainville says. “Some factors are out of our control, but as long as risk managers have full disclosure and transparency, we will end up with a fabulous renewal.”

Featured topics related to current cat risks include bad planning when an organization faces the unknown, legal aspects of disaster, forecasting terrorism and political risk, mega-risk and cat claims.

Restoule says weather is an issue on which Canadian risk managers demand clarity. The 2005 storm season validated the need for improvement so the industry can survive another devastating storm season. “Although risk managers have always prepared for hurricanes, our business models really failed in terms of adequately understanding the magnitude of the financial consequences of such storms,” he says. “We’re trying to add value at the conference by educating and preparing risk managers about how to adequately prepare a corporation for catastrophes, and explain their role in developing the tools needed to assess the financial impact to an organization regardless of the type of catastrophic disruption.”

The risk manager’s role is one of increased responsibility, especially in finance and treasury departments, Drainville notes, explaining that “since the hurricanes, there’s been a lot more focus on ERM (enterprise risk management) in all organizations.”

ENTER ERM

Holistic ERM approaches are alive and well, but represent only the “first phase,” Drainville says. ERM’s theory and methodology has been developed, but in order to complete the process, risk managers have to “clearly define the ERM strategy and guidelines,” she says.

Risk mangers will have an opportunity at the conference to discuss how ERM can bring some insight, measurability and accountability to the bottom line and the conference, Restoule says. “We are featuring one of our prominent risk management professionals on this topic and … it’s not going to be discussion of theory, it’s going to be about the practice of ERM.” In addition, the Conference Board of Canada will discuss their mapping and analysis of ERM trends in Canada for the last five to six years.

In response to the increasing number of captives recently established by Canadian corporations and offshore domiciles, Restoule says the conference will offer sessions on captive management. Captives represent a prevalent method for financing Canadian corporations’ risk programs, according to Restoule. “We’ve seen captives used to access the reinsurance market and to actually take on an organizations financial risk,” he says. “There are a number of great uses for the captives within the current market and the time is ripe to explore those opportunities.”

Contract certainty and policy delivery are not on the program agenda, but will likely be addressed during the breakout sessions, Restoule says. The issue is alive and well in Canada, he says, adding that it is critical for a policy to be delivered within 30 days of inception. “Canadian risk managers have not been totally satisfied with the performance of their insurers … the supply chain can do a much better job in writing the terms quickly and getting the documents out,” he says.

“GALABRATE” GOOD TIMES

Drainville is keeping a few fun features under wraps, but she is exuberant when describing the reformed “Galabration.” The event features gastronomical delights, a symphonic string quartet and a rockin’ rollick of cowboy boots, hats and mix n’ mingle magic. Fun is not only a factor in the conference program it is also a reality of the planning committee.

“(Serving as co-chair) has been…fun because of our team spirit and the fact that we’re willing to roll up our sleeves to do our share,” Restoule says. “We’re not afraid to face a challenge to make a change.”

Drainville and Restoule exemplify the energy and enthusiasm on the conference planning committee. They are also hard workers showing a great deal of dedication and commitment to their “day jobs.”

Drainville, for example, sits as a volunteer on the Conference Board of Canada. She is also a RIMS delegate and mentor for US RIMS chapters. She has worked at Enerplus Resources Fund, through all its mergers and acquisitions, for 20 years as of Sept. 2006. “I am really passionate and really proactive… and both Joe and I are visionaries and it makes for a good team,” she says.

Restoule is equally enthused about his career. He began in 1979 at State Farm Insurance as a “claims adjuster su pervisor manager,” after graduating with a B.A. in Criminology from the University of Alberta. In 1988, Restoule joined the risk management department at Nova Chemicals Corp.

In addition, Restoule has served as: chair of the American Gas Association’s risk management committee; director of the Southern Alberta RIMS Canada chapter (since 1992) and as chair of the Canadian Risk Management Council. He has been a member of both the RIMS executive council and the board of directors for the last five years.