What it’s like to be a public sector risk manager

No two days are alike for public sector risk managers. One day, their jobs might require predicting risk for a transit facility; the next day, a long-term care home.

That’s why it’s crucial for public risk managers to break out of the traditional insurance buyer roles and become more like strategic partners to their business leaders. They must find effective ways to embed risk management across an entire agency, each component of which can be operating with differing agendas, risk professionals tell Canadian Underwriter.

More so than for risk managers in private companies, public risk managers have a role that straddles the boundary between generalists and specialists, said Tina Gardiner, manager, risk management services at The Regional Municipality of York.

“I’m not insuring a factory that makes widgets. I’m not looking at the same process day after day…” she said. “I’m looking at so many lines of business, and so many people.”

The job also requires practitioners to think beyond projects they’ve worked on before, added Valerie Barber, director of the insurance and risk management branch (department of consumer protection and government services) in the province of Manitoba.

“Even with contract reviews, no two contracts are the same,” she said. “That’s where you say, ‘Okay, now we’re getting involved with this new unique situation. What are the unique risks that come with [it]?’”

 

Hard market factors

The hard market has complicated matters for public entities, making it difficult to find coverage in some much-needed lines. “While there might be capacity, there are fewer insurers who want to play in the municipal market,” said Gardiner.

Public entities are finding less choice in the market, depending on the line of coverage. Although property and liability insurance are generally stabilizing, cyber coverage in particular is tricky to find.

That may be because governments and the public sector (particularly in the U.S.) are among the bigger data breach targets, according to sources like Forbes and PwC Canada.

“Cyber remains a big issue for municipalities,” Gardiner adds. “The feeling seems to be that municipalities don’t have their cybersecurity together, which is [often] a misconception.”

Municipalities have skilled IT departments, follow IT best practices, and focus a lot of time and budget on security and employee training, she explained.

Per Barber’s own provincial outlook, Manitoba tends to hold less risk compared to its neighbours. Despite that, premiums have still increased, albeit with less impact than others.

“We don’t have the hurricane risk, and our wildfire and flood exposure is mitigated in the capital region,” Barber said. “The majority of the population resides in Winnipeg, where there is flood protection afforded by the floodway, and there are no surrounding forests in proximity.

“Our premium prices in previous years, like everyone else’s, have gone up slightly, but we were able to keep that in check with favourable loss experience and different retention options.”

 

This story is excerpted from one that appeared in the August-September print edition of Canadian Underwriter. Feature image by iStock.com/whyframestudio