The Profession: Donna Tyner
R&I: What was your first job?
My first official job right out of college was as a management trainee for the former First Interstate Bank in Portland, Ore.
R&I: How did you come to work in risk management?
Like a lot of risk professionals, I started in the world of insurance. I first worked as a claims adjuster for Allstate Insurance Co. and then looking for a different challenge, I went to work for the State of Oregon as a compliance officer. Eventually I ended up working for the state’s risk management division. I provided risk management consulting services to all state agencies such as the Oregon Health Sciences University, police and the department of transportation.
R&I: What is the risk management community doing right?
I have been in risk management for many years now, and I like how it’s grown to be a professional business with a code of conduct and educational standards, and that it encourages people to get an ARM or CPCU designation. I like that we’re encouraging youth to pursue risk management careers, and think highly of all the mentoring we provide each other. I’m proud to be part of such a professional industry.
I like that we’re encouraging youth to pursue risk management careers, and think highly of all the mentoring we provide each other.
R&I: What changes have you needed to deal with in shifting from the public to the private sector?
At the Port of Portland [Ore.], nearly everything you do is transparent. You’re free to share all sorts of information. At a publicly traded company, not everything can be shared. The only thing that’s truly public is the annual report.
R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?
The accessibility of information is the biggest change. I think I got my work computer in 1991. There was no Internet at the time. Information was not at your fingertips. Back in the day, I’d have to create things from scratch. Today, things are different. You can find templates and samples online. I used these resources when I was learning about business continuity planning.
R&I: What emerging commercial risk most concerns you?
Technological risk is concerning. We’ve all heard stories about what happened with TJ Maxx and Target. And now, people are talking about what an unscrupulous person could do with drones in terms of obtaining proprietary information.
R&I: Is the contingent commission controversy overblown?
I would say no. I want to know if my broker is receiving contingent commissions, so I can factor that in to the advice they’re giving me. I can also look for patterns over time.
Years ago, I brought my children to work during “Bring Your Child To Work Day” so they think that all I do all day is sit in front of a computer, attend meetings and talk on the phone.
R&I: Who is your mentor and why?
Andrea Marzette the former risk manager for the Port of Portland. She retired this past March. She was my boss for 13 years. She showed me what it means to lead and that being a great manager means making sure your employee is successful.
R&I: What have you accomplished that you are proudest of?
My role as a parent. I am proud of my two sons. One is a senior and the other is a sophomore in college. They are just great young men and they’re gifted in many ways. Fortunately, I’ve had lots of great support from my family, and my husband of 30 years.
R&I: Were you a stay-at-home mom?
Pretty much, yes, until my youngest was in preschool. I was fortunate to be able to work two days a week in a job-share arrangement at the risk management division with Robert Nies. You can only do this sort of thing if both of you have a solid work ethic.
R&I: What is your favorite book or movie?
I happen to love Malcolm Gladwell. My favorite book of his is “The Tipping Point.” It investigates the factors that go into making incremental change. He has written five books and I’ve read them all.
R&I: What’s the best restaurant you’ve ever eaten at?
I love E-San Thai food in Portland.
R&I: What is the most unusual/interesting place you have ever visited?
Among my favorites are the Mayan ruins in Honduras, Guatemala’s ruins of the sun and moon, the Coliseum in Rome, the Vatican for its artwork, and Frederick Douglass’ house in Washington, D.C.
R&I: What is the riskiest activity you ever engaged in?
I think when I went body surfing in Limon, Costa Rica. I was in college at the time. I didn’t check to see if there was undertow or look for any other risks.
R&I: If the world has a modern hero, who is it and why?
Roy Pittman. He has a wrestling club at Peninsula Park Community Center in North Portland and has coached thousands of young men and women over the years. Many of his students have won state, regional and national titles.
R&I: What about this work do you find the most fulfilling or rewarding?
What I’ve always loved about risk management is that it’s so stimulating. Something always comes up that is brand-new.
R&I: What do your friends and family think you do?
Years ago, I brought my children to work during “Bring Your Child To Work Day” so they think that all I do all day is sit in front of a computer, attend meetings and talk on the phone. Some of my friends think I just buy insurance and prevent employees from getting injured. It’s hard to describe what we do in simple terms. I take the time, however, to explain our role in managing risk.
Open to Improvement
U.S. risk professionals with significant hurricane and other CAT-prone exposures are looking for a clearer picture when it comes to catastrophe loss modeling, an area fraught with confusion and increasing criticism.
Time and again, those whose risks are being evaluated have complained that they have too little control over how their specific exposures generate loss estimates, and how those estimates are calculated.
“Open” systems and “transparency” have become the buzzwords of the catastrophe modeling community of late, but how user-friendly will the newest catastrophe models really become over the next year or so?
It’s a question that the Oasis Loss Modeling Framework hopes to help answer. The London-based nonprofit represents a total of 25 insurers, reinsurers and brokers, including units of Allianz, Zurich, SCOR, Liberty Mutual, Willis, Guy Carpenter, Hiscox, RenaissanceRe and PartnerRe.
Oasis announced in January that its framework would bring down the cost of modeling, and provide transparency and greater flexibility for users via a program that is open to anyone with an interest in creating new catastrophe risk models.
Hopes are high. Still, the reality is that thus far, Oasis has no models available for U.S. hurricane and quake, though program developers hope to have such models available by the end of the year, said Dickie Whitaker, Oasis project director.
Initially, Oasis will offer models of floods in Great Britain and Australia, earthquake in North Africa and the Middle East, and brush fire in Brazil, Whitaker told Risk & Insurance®.
Scott Clark, risk and benefits officer for the Miami-Dade County Public School system, said he wants to see Oasis offer a global open platform that would allow those most knowledgeable about the school system’s risks to go into a modeling system and enter information that will produce the best outcomes — as opposed to the rather limited current system.
“I would like to be able to drill down into second- and third-tier modifiers to best affect the modeling outcomes including roof strapping, roof construction, etc.” — Scott Clark, risk and benefits officer for the Miami-Dade County Public School system
“I would like to be able to drill down into second- and third-tier modifiers to best affect the modeling outcomes including roof strapping, roof construction, etc.,” said Clark.
Currently, critics said, traditional models have been too focused on the aggregation of risk that insurers tend to calculate — rather than individual exposures and properties.
The modelers are also criticized for changing models from year to year in ways that do not reflect actual changes in loss exposure.
“There is a tremendous variation between RMS 11 and RMS 13,” said John Burkholder, director of risk management for Broward County, Fla.
For example, when Marsh compared the two models, it found that medium-term rates (which represent storm activity potential based on climate conditions over the next five years) were reduced 28 percent in RMS version 13 for CAT 3 to CAT 5 events, while the nationwide average was reduced 16 percent.
“How could you have that much variation in risk exposure over just a two-year period?” asked Burkholder. “It’s difficult to reconcile those models with the actual individual risks.”
Claire Souch, senior vice president of business solutions at RMS in London, said that the main drivers of change between RMS 11 and RMS 13 came from new insights into hurricane activity: the number of hurricanes per year, where hurricanes are formed and where they make landfall.
“The scientific view of hurricane activity has changed since 2011, in part because of the considerable research RMS and other organizations have carried out to determine what drives hurricane landfall frequency,” she said.
“Ocean temperatures in the Atlantic have been increasing,” she said.
“Yet, over the last few years we’ve seen very low levels of hurricanes making landfall, something that the change between the 2011 and 2013 model versions reflected,” said Souch.
Clark of Miami-Dade County schools echoed the concerns of many risk managers.
He recalled the impact of the controversial RMS version 11, which initially more than doubled the school district’s probable maximum losses (PML) to $1.9 billion, making it difficult for Clark to assemble the insurance limits he needed — until he got another modeling firm to reassess the risk.
The way it’s worked traditionally using RMS, AIR or EQECAT modeling, there is a huge blind spot for risk managers and others wanting to know how the models project losses, he said.
Karen Clark of catastrophe risk modeling firm Karen Clark & Co. in Boston, said she understands risk managers’ concerns.
Traditional models may lack quantifiable data and can change quickly and dramatically, she said. When risk specialists are dealing with countrywide exposures, geographical changes may be less critical.
“The traditional models are not robust for individual locations and concentrated exposures.” — Karen Clark,co-founder and CEO, Karen Clark & Co.
Traditional models were never designed with risk managers in mind but with insurers in mind, she said.
“The traditional models are not robust for individual locations and concentrated exposures,” she said.
Models and Granularity
Often, risk managers and their brokers need to bring their underwriters’ attention to outliers that don’t fit with the usual assumptions.
That is one of the problems with traditional models, said Burkholder of Broward County.
“We’ve got a bulkhead at Port Everglades which models as a building,” Burkholder said.
However, it is not nearly as vulnerable.
“It is constructed solely of concrete and steel, so the model should, for loss modeling purposes, recognize its actual characteristics in the results to more accurately reflect the correct exposure,” he said.
In an effort to address some of the problems — particularly with making their systems more transparent to users, all three of the major CAT modeling vendors have released new products: Touchstone from AIR Worldwide, Risk Quantification & Engineering (RQE) from EQECAT and RMS(one) from RMS.
Souch of RMS said that RMS(one) provides “an exposure and risk management platform that enables any company to store and analyze all of the information they have about their risk, acting as a system of record for all of the risk items in the business, with the ability to run RMS and other models.”
She said RMS(one) is exposure and model agnostic so it allows companies to use catastrophe models to simulate what the impact of a hurricane or other disaster might be for all the exposures they have.
In addition, RMS’ models on RMS(one) are open and enable users to understand the impact of different scenarios, she said, such as if three hurricanes made landfall in one year instead of a single hurricane.
AIR Worldwide’s Touchstone is “an open platform, allowing clients to import third-party hazard layers or run multiple alternative models on a single platform for a more complete view of risk,” according to the company.
The major CAT modeling vendors have attempted to address some of the criticisms related to transparency.
Once more, the emphasis is on transparency and user interface.
“For example, say you believe losses from CAT 3 hurricanes should be 10 percent higher than AIR’s standard model says they are,” said Rob Newbold, senior vice president with AIR Worldwide.
A user can go into Touchstone and modify losses to better reflect their loss experience, or their own underwriting policies.
“However, there will always be the AIR default view, alongside any modified views,” said Newbold.
Several firms are now providing data and models through Touchstone. These include Ambiental, ERN, EuroTempest, IHS Inc., KatRisk, Met Office, PERILS, and SSBN.
EQECAT has its own take on the “open model” approach.
Rodney Griffin, senior vice president of client solutions and product management for CoreLogic EQECAT, said that RQE’s simulation platform “runs 181 natural catastrophe probabilistic models for 90 countries across the globe.
The RQE platform is inherently open in that additional models or components such as the hazards or vulnerabilities can be added to the platform.
“CoreLogic EQECAT is committed to being transparent and this is reflected in the granularity of reports down to individual site levels and the very extensive documentation which includes analyses of the key drivers of risk,” Griffin said.
On the compliance side, with respect to Solvency II in Europe and ORSA in the United States, he said the company “provides tailored documentation to transparently support these requirements.”
Oasis, meanwhile, promises to offer perspectives from multiple modeling firms, including Karen Clark & Co. Clark noted that her company’s platform, RiskInsight, allows risk managers to build their own models.
At the same time, she said, companies can also take advantage of Oasis to see what other models say.
Other Oasis modelers include JBA Risk Management, Spa Risk LLC, and Long Beach, Calif.-based ImageCat, which plans to focus specifically on earthquake risk via SesmiCat.
“The compelling case for the Oasis is that risk managers will be able to have access to the best of breed models tailored for specific hazards and specific regions through a single portal and at a reasonable cost,” said Charles Huyck, executive vice president at SesmiCat creator ImageCat, Inc.
“SeismiCat, for example, can potentially provide risk managers access to a host of sophisticated earthquake modeling capabilities previously utilized only by the structural engineering community in the United States,” he said.
So how exactly does a risk manager tap Oasis?
A risk manager can join as an associate member, which is free, said Whitaker. Full members are financial institutions or underwriters, all of whom pay a membership fee, he said.
Risk managers can download the software and search for a model of the geographical region and peril in question, and then negotiate their fee with the provider, he said.
Karen Clark said that the costs to access Oasis or RiskInsight will undoubtedly be a lot less than for the traditional modelers.
“Quite simply, you’re going to get more models on it,” Clark said when asked why industry members might want to tap Oasis versus an individual modeler like her firm.
“Via Oasis, you’ll be able to look at many different models’ views. That’s the [whole] idea,” Clark said.
Do It Safely or Don’t Do It
When industrial property insurer FM Global blows things up or sets them on fire to learn how to mitigate client losses, someone needs to be looking out for the company’s scientists, loss prevention engineers and technicians.
That someone is Janine Pitocco, FM Global environmental, health and safety manager at the company’s research campus in West Glocester, R.I.
During the past 10 years, under Pitocco’s watch, the number of OSHA-reportable injuries at the carrier’s testing site has been reduced by 70 percent.
That’s been achieved through her emphasis on safety and training programs that emphasize early reporting of unsafe conditions and potentially dangerous acts, said her supervisor, Lou Gritzo, a vice president and research manager with FM Global.
Gritzo said that helping people to work safely — and not cut corners when no one’s around to see it — is simply part of Pitocco’s DNA.
“She makes it part of her colleagues’ as well,” he said.
Pitocco’s job requires expertise and precision.
It also calls for social skills that Pitocco exhibits on a daily basis, said Richard Chmura, the FM Global research campus manager in West Glocester.
Not every environmental, health and safety manager is able to work side by side with lab floor personnel without getting in the way of the operations people, Chmura said.
“It’s imperative to gain the acceptance and cooperation of the operations staff and Janine has the unique ability to do that,” he said.
“We have to ensure,” said Pitocco, “that all of our staff know and believe their personal safety is our highest priority regardless of what challenges are presented.”
“If it can’t be done safely, it won’t be done,” she said.
Pitocco was recently instrumental in creating a safe environment for testing the flammability and toxicity of stored lithium-ion (li-ion) batteries.
Use and storage of the lightweight, rechargeable batteries is ubiquitous. They are used in cell phones, laptop computers, power tools, and other hand-held devices.
FM Global conducted the testing in collaboration with the National Fire Protection Association.
To aid safer research into the risks, Pitocco put together a safety program that protected scientists, engineers and test personnel.
As a result of the testing, FM Global scientists and engineers can now impart the following information to clients and to the business world at large.
• Gases produced as a by-product of a li-ion battery fire required scientists working near the test fire — as well as fire suppression personnel — to wear breathing respirators.
• Those same by-products of combustion also warrant that fire suppression personnel wear chemical resistant suits, boots and gloves during post-fire cleanup.
• Li-ion batteries present several unique fire hazards when involved in a fire, due to an ignitable electrolyte liquid contained within such products.
• When bulk-stored in corrugated board cartons, early fire extinguishment and cooling of the li-ion batteries — using sprinkler systems, in particular — is imperative to properly protect a facility.
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