The Language of Learning

Boasting beauty accented by cultural charm, Qubec epitomizes the duality that define both Canada and the cultural resolve of a francophone minority. Further embedded in the history of this alluring area is the cultural chagrin of the francophone fight for autonomy buoying a separatist mentality and a dangerous divide between the French and English perspective. In Qubec’s Southern region, however, lies the bilingual belt where both national languages reign supreme. Montral is a true testimony to the official beginnings of bilingualism, which dates back to 1867 – Canadian Confederation – when the British North America Act allowed both French and English to be spoken in parliamentary debates and federal court cases enabling communication, enhanced by the proliferation of two cultural perspectives.

September will see the crossover communication of risk managers, brokers and insurers as they enter Montral to embark upon the evolution of the industry at the 30th annual RIMS Canada Conference. Here in the dialect of their industry initiative they will share their perspectives on the role of risk manager and the state of the insurance industry at large. Much like the feud that exists between the nation’s official languages, risk managers, brokers and insurers require a platform for discussion where each of their voices can be heard and questions answered. “As a result of the market right now, which reflects all the issues related to the scandals,” conference co-chair Jocelyne Lee, assistant treasurer and manager treasury, risk management and insurance for Hydro-Qubec, explains, “we’re trying to clarify the new roles of the people involved in the conference, the broker, the insurer, the different types of risk managers. The only way that you are going to get perspective is through communication and those conversations have to take place between the players in that sphere.”

Communication is the cornerstone to perspective and the bilingual belt is the natural platform to facilitate the proliferation of dueling perspectives.

A consistent state of market flux from hard to soft and back again, alongside distrust due to bid-rigging scandals requires that risk managers approach their changing profession in a new light, with new perspectives that brokers and insurers are able to provide. “The focus of the theme ‘perspective’ is on education and rounding out your understanding of the entire company’s operations,” conference co-chair Daniel Desjardins, senior director of risk management and insurance for Bombardier Inc., says, “it’s a completely different environment now, one that’s highly regulated and highly technical so the skill of the risk manager of the future will have to be totally different from the skills of the risk manager of the past.”

Risk managers must take a more cognizant approach to understanding how industry changes and worldwide events of the last four or five years have changed their role as, Desjardins says, “in the past risk managers were basically insurance technicians whereas today their role is evolving to a level where the risk manager is much more in front of his own senior management and that implies also that the risk manager today must understand the way in which their corporation is operating.”

The job of a risk manager today necessitates the awareness of everything that’s going on in the corporation. Lee says, “It is a job where you have to have a very broad perspective if you want to do well. The evolving role requires perspective related to finance, as most of us (risk managers) are attached to the finance side. There is a wide array of knowledge and experience you need to have to be a good risk manager.”

THE NON-TRADITIONAL APPROACH

In just a year, the culmination of the market service agreement (MSA) scandals has resulted in the need for a new approach to risk management that concentrates on internal risks related to corporate governance. Lee says related issues such as transparency have led the conference to focus on perspectives that go beyond the traditional way of doing things.

“While 60% of the job is more related to buying insurance …the other 40% is related to the question ‘how can I do a good job in my company and how can I be useful to the corporation?'” Lee explains. “There will be a lot of sessions dedicated to corporate governance and those that are related to merger and acquisition and pure risk management in terms of global approach.”

Concentration on corporate operations is in part, in response to the changing market where growth through mergers means companies are bigger, but markets are fewer. As a result, specialized markets that require longer perspective risks, such as construction, specific markets like we see in construction, do not have insurers there to cover them and if there are insurers for some of these specialized areas, they often don’t want to write policies that span more than three years. Lee says this means that today risk managers find it difficult to buy a longer perspective risk program when attempting to reduce and extend your renewals.

“There is a definite concentration in the market,” Lee says. “There’s new brokers but there haven’t been any new insurers so everybody is playing with less people.”

MANAGING GROWTH AND EVOLUTION

Growth through merger and acquisition reflects the need for an increase in corporate risk coverage as larger companies are served with greater potential internal risks, risks which are accentuated by recent scandals and the impact on judiciary, liability and D&O coverage’s.

“Corporate governance never used to be much of an issue,” Desjardins says, “but now there are laws about corporate governance and how a company should be operating under that law.”

As a result of these issues of transparency in board management dominating the headlines and the subsequent consequences related to D&O, judiciary, liability and matters of trust, Desjardins says risk managers must re-direct their focus toward matters that relate to human capital risk such as enterprise risk management (ERM), which is widely spread at the moment.

“For those that have never approached ERM before,” Desjardins says, “we are going to have sessions from ‘where to start with ERM’s’ to more advanced sessions, which will be taking the theory to action.”

Underlying such sessions, Lee says, will be a concentration on how risk managers can manage a firm from the board perspective by integrating the perspectives of players who are somewhat distanced from pure insurance risk management. The focus will be on the legal side of areas such as ERM – a move toward the integration of litigation in many domains of the risk and insurance world that reflects in the increase in law-related attendees. This eclectic roster presents a unique forum for risk managers to secure the perspectives of individuals from the entire scope of the insurance realm.

“We want risk managers to really understand that they have the right to be involved in the activity of their business that they have placed in the hands of their service provider,” Desjardins says. “The kick-off session on Monday features the chairman of Aon and the CEO of Marsh … The topic of their session is to talk about how these companies are going to be restructuring themselves as a result of dropping the MSA’s.”

Desjardins says his main hope is that the conference will bestow risk managers with the confidence to ask questions of their day-to-day account executives and thus maintain control of risks and ensuring that they are not merely purchasing insurance blindly.

SHARP-SIGHTED SHOOTERS

Touting top profile status in their respective companyies, both Desjardins and Lee offer insight into the culture of the CRIMS conference through their past involvement in the annual event. Lee served as chair of the program for the 1996 CRIMS conference, alongside Desjardins who served on the CRIMS conference board the same year. Desjardins, who became involved with CRIMS in 1981, also had his hand in the organization of CRIMS 1990 and has since served on CRIMS in the areas of events, treasury, programs, liaison and, in the mid-90s he sat as president of the local chapter.

Desjardins’ involvement in insurance began almost 30 years ago when, fresh from two years of schooling in electronics, he initiated his insurance career with Royal Insurance in Montral where he stayed in the capacity of underwriter for approximately six years. In 1981, Desjardins entered what would become his life focus for the next 24 years – risk management – with the pulp and paper industry. During this time Desjardins returned to school, completed his CRM courses, and attended McGill university to secure certificates in financing and accounting. Finally, in 1989 Desjardins embraced longevity and entered Bombardier. “Bombardier kept me in this business because the array of risk that we deal with is so vast from conventional p&c risk to the aviation risk and financial types of risks.”

Like Desjardins, Lee has enjoyed a long-lived journey of 20-years with her current corporation – Hydro Qubec. Lee’s life of insurance, with a financial twist, began at Hydro Qubec in 1993. Before her insurance initiation, Lee had served in the financial sector as well as IT. Before joining Hydro and after completing both a Bachelor and a Masters degree in finance, Lee spent five years working in the world of private finance. “Here, in finance, we know more about the corporation than most areas as finance is related to the base activities of a corporation.”

As much as both Desjardins and Lee have to be proud of for their longstanding corporate success, they also have to be proud of the success of the CRIMS 2005 Conference, which already has an excess of 80 exhibitors. But more important than size is the ideal that, Desjardins says, “we should not lose sight that this conference is for risk managers and we should always make sure we cater to their needs.”