Katie Siegel

Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at [email protected]

Risk Management

The Profession

Avis Budget Group’s director of risk management, Barbara Vitale, lauds the industry for bringing more women into the fold.
By: | April 28, 2016 • 5 min read
Topics: The Profession

R&I: What was your first job?

I was working as a paralegal for a N.J. insurance company. They provided free insurance classes conducted by the Insurance Institute of America. I wanted to learn about the business, so I received my certificate in general insurance. That 052016_profession_biocame in handy reviewing the insurance provisions of contracts. Eventually I received my ARM. An opportunity came up at a large gas utility, and I expanded my duties as a paralegal working for the VP of risk management. When he retired, I was offered the position of risk manager.

R&I: How has your experience as a paralegal influenced your risk management career?

[It] has been invaluable to my success as a risk manager. I did everything from litigation, contracts, mergers and acquisitions, to preparing SEC filings. I became well versed in the operations and business risks of a public company from a legal perspective.

R&I: What is the risk management community doing right?

We’re focused on understanding how rapidly the world is changing. Risk managers and carriers are making an effort to understand all the risks commensurate with being global companies. Another major change is that women have become a bigger part of risk management over the past 20 years. In fact, my department is all women.

R&I: What could the risk management community be doing a better job of?

We need to get more people involved in risk management. It’s so much more than just buying insurance. You can be impactful for your company in so many ways as they come to trust and value you.

Another major change is that women have become a bigger part of risk management over the past 20 years.

R&I: What was the best location and year for the RIMS conference and why?

I really loved New Orleans. We’re in the business of dealing with risk and disaster and catastrophe, and the year we were there, it was right after Hurricane Katrina. It was a testimony to risk managers that we wanted to be there. Disaster recovery and continuity are what we’re about.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

Having more women in the field is one. Another is the way the industry has become so multifaceted as well as responsive to emerging risks like cyber. Risk managers are much more involved with their companies’ operations, and it’s become more challenging as we keep abreast of rapidly changing issues.

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R&I: What emerging commercial risk most concerns you?

We’re all holding our breath on cyber risk. It’s still so unknowable, and anything can happen that you’re not prepared for, even with the coverage that’s out there. This is an area where we’ll have to wait and see how the risk evolves and how products develop. Apple just learned that the FBI could hack into its phones and I bet they never saw that coming!

R&I: What insurance carrier do you have the highest opinion of?

CNA. I can’t say enough good things about them. We have many unique needs, and they’ve stepped up to partner with us on meeting all of them.

R&I: How much business do you do direct versus going through a broker?

We place all our coverage though our amazing partners, Aon and Lockton.

We’re all holding our breath on cyber risk. It’s still so unknowable, and anything can happen that you’re not prepared for, even with the coverage that’s out there.

R&I: Are you optimistic about the U.S. economy or pessimistic, and why?

Very optimistic. We have a lower unemployment rate than we’ve had in many years and more job creation. And let’s not forget about the gas prices!

R&I: Who is your mentor and why?

My mom was my mentor. My dad died young and she was left raising four kids at the age of 40. She was a businesswoman in the 1960s and taught me the value of standing on my own two feet as a woman. Most importantly, she was the kindest woman I ever met.

R&I: What have you accomplished that you are proudest of?

I’m very proud of my excellent team. I’ve spent a lot of time mentoring them and “boring” them with my business philosophy, but I tell them that if I were to get hit by a bus on any given day, they could jump in and do my job on that first, sad day.

R&I: What is your favorite book or movie?

“Madame Bovary.” I met my husband at Rutgers in a French literature class, and we were reading that book at the time, so it’s my favorite.

R&I: What is the most unusual/interesting place you have ever visited?

It’s a toss-up between Israel and Egypt; the pyramids were so exciting but so was Bethlehem and Masada.

R&I: What is the riskiest activity you ever engaged in?

Talking back to the Sisters of Charity; like O’Reilly, I was a bold, fresh article!

R&I: If the world has a modern hero, who is it and why?

I really admire Pope Francis. He’s trying to be an enlightened pope who embraces all people and religions, and he brings some needed change to Catholicism.

R&I: What about this work do you find the most fulfilling or rewarding?

Every day is a new challenge and it never gets boring.

R&I: What do your friends and family think you do?

They think I meet with brokers and carriers and buy insurance and handle big insurance claims and that’s it. If they only knew!




Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at [email protected]
Share this article:

Risk Management

The Profession

Avis Budget Group’s director of risk management, Barbara Vitale, lauds the industry for bringing more women into the fold.
By: | April 28, 2016 • 5 min read

R&I: What was your first job?

I was working as a paralegal for a N.J. insurance company. They provided free insurance classes conducted by the Insurance Institute of America. I wanted to learn about the business, so I received my certificate in general insurance. That 052016_profession_biocame in handy reviewing the insurance provisions of contracts. Eventually I received my ARM. An opportunity came up at a large gas utility, and I expanded my duties as a paralegal working for the VP of risk management. When he retired, I was offered the position of risk manager.

R&I: How has your experience as a paralegal influenced your risk management career?

[It] has been invaluable to my success as a risk manager. I did everything from litigation, contracts, mergers and acquisitions, to preparing SEC filings. I became well versed in the operations and business risks of a public company from a legal perspective.

R&I: What is the risk management community doing right?

We’re focused on understanding how rapidly the world is changing. Risk managers and carriers are making an effort to understand all the risks commensurate with being global companies. Another major change is that women have become a bigger part of risk management over the past 20 years. In fact, my department is all women.

R&I: What could the risk management community be doing a better job of?

We need to get more people involved in risk management. It’s so much more than just buying insurance. You can be impactful for your company in so many ways as they come to trust and value you.

Another major change is that women have become a bigger part of risk management over the past 20 years.

R&I: What was the best location and year for the RIMS conference and why?

I really loved New Orleans. We’re in the business of dealing with risk and disaster and catastrophe, and the year we were there, it was right after Hurricane Katrina. It was a testimony to risk managers that we wanted to be there. Disaster recovery and continuity are what we’re about.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

Having more women in the field is one. Another is the way the industry has become so multifaceted as well as responsive to emerging risks like cyber. Risk managers are much more involved with their companies’ operations, and it’s become more challenging as we keep abreast of rapidly changing issues.

Advertisement




R&I: What emerging commercial risk most concerns you?

We’re all holding our breath on cyber risk. It’s still so unknowable, and anything can happen that you’re not prepared for, even with the coverage that’s out there. This is an area where we’ll have to wait and see how the risk evolves and how products develop. Apple just learned that the FBI could hack into its phones and I bet they never saw that coming!

R&I: What insurance carrier do you have the highest opinion of?

CNA. I can’t say enough good things about them. We have many unique needs, and they’ve stepped up to partner with us on meeting all of them.

R&I: How much business do you do direct versus going through a broker?

We place all our coverage though our amazing partners, Aon and Lockton.

We’re all holding our breath on cyber risk. It’s still so unknowable, and anything can happen that you’re not prepared for, even with the coverage that’s out there.

R&I: Are you optimistic about the U.S. economy or pessimistic, and why?

Very optimistic. We have a lower unemployment rate than we’ve had in many years and more job creation. And let’s not forget about the gas prices!

R&I: Who is your mentor and why?

My mom was my mentor. My dad died young and she was left raising four kids at the age of 40. She was a businesswoman in the 1960s and taught me the value of standing on my own two feet as a woman. Most importantly, she was the kindest woman I ever met.

R&I: What have you accomplished that you are proudest of?

I’m very proud of my excellent team. I’ve spent a lot of time mentoring them and “boring” them with my business philosophy, but I tell them that if I were to get hit by a bus on any given day, they could jump in and do my job on that first, sad day.

R&I: What is your favorite book or movie?

“Madame Bovary.” I met my husband at Rutgers in a French literature class, and we were reading that book at the time, so it’s my favorite.

R&I: What is the most unusual/interesting place you have ever visited?

It’s a toss-up between Israel and Egypt; the pyramids were so exciting but so was Bethlehem and Masada.

R&I: What is the riskiest activity you ever engaged in?

Talking back to the Sisters of Charity; like O’Reilly, I was a bold, fresh article!

R&I: If the world has a modern hero, who is it and why?

I really admire Pope Francis. He’s trying to be an enlightened pope who embraces all people and religions, and he brings some needed change to Catholicism.

R&I: What about this work do you find the most fulfilling or rewarding?

Every day is a new challenge and it never gets boring.

R&I: What do your friends and family think you do?

They think I meet with brokers and carriers and buy insurance and handle big insurance claims and that’s it. If they only knew!




Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at [email protected]
Share this article:

RIMS 2016

Manage Expectations, Manage Reputation

Molding the expectations of customers and shareholders through ERM is critical to reputation protection.
By: | April 13, 2016 • 4 min read
Topics: Reputation | RIMS
RIMS reputation

The art of managing reputation risk really comes down to shaping the expectations of shareholders, customers, vendors, creditors and investors.

“Not an easy thing to do,” said Nir Kossovsky, chief executive officer, Steel City Re, speaking at the annual RIMS conference in San Diego on April 12.

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“Managing expectations involves behavioral economics – shaping what people expect from you and then meeting those expectations.”

He said expectations typically revolve around six key areas: safety, ethics, quality, security, sustainability and innovation. Failing to meet any of those expectations creates vulnerability for a company, opening up an opportunity for shareholders or special interest activists to come after the board of directors as the culpable party.

Increasingly, directors and officers are the true casualties of reputation damage.

Dissatisfied customers or partners know that “the court of public opinion is much more effective than the court of law,” Kossovsky said, so they will bring allegations against the board and force a public response.

“Managing expectations involves behavioral economics – shaping what people expect from you and then meeting those expectations.” – Nir Kossovsky, chief executive officer, Steel City Re

The best way to mitigate reputation risk, then, is to proactively communicate the board’s awareness of a company’s exposures, and acknowledge its duties to deliver on expectations related to the six key areas.

“Communication is critical,” said Todd Marumoto, director of risk management, Mattel, Inc. “There needs to be some sense of a plan for how the board will respond to a reputation event.”

Without a quick response, the silence is filled by the white noise of unsubstantiated opinion, Kossovsky said. That weakens the board’s credibility.

“Facts are available without much of a down payment. Allegations brought against the board don’t necessarily have to be true and can’t always be validated.”

Conflicting expectations make reputation risk management even harder.

Customers expect, for example, near impossible standards of quality and customer service, while shareholders expect strong profit and growth, and creditors expect swift payment.

While many believe that marketing and press coverage can be the tool for the messaging needed to mold expectations through public perception, the most effective way to mitigate reputation risk is through enterprise risk management that strives for excellence, the speakers said.

In other words, expectations should be set by a company’s performance.

Kossovsky offered the example of BP, which claimed to be “beyond petroleum.”

Despite impressive initiatives to use cleaner energy, BP was still, in fact, heavily reliant on petroleum. The Deepwater Horizon spill of 2010 sparked so much anger because people expected BP to be above such environmentally dangerous accidents.

ExxonMobil, on the other hand, acknowledged to its shareholders that a spill was always a real threat, but demonstrated the steps it was taking to minimize the risk. Shareholders thus had more realistic expectations of the company and are harder to disappoint.

Presenting to the C-Suite

Risk managers can bring the importance of reputation risk to the C-suites’ attention by demonstrating its financial impact.

“Expenses could come from having to replace a vendor, from a government penalty, litigation and class action lawsuits, or having to implement a new management process,” Marumoto said.

Overall, costs associated with remediating a reputational event can be two to seven times higher than costs related to the operational failure that caused the reputation damage in the first place.

“With reputation risk, it’s not always about right or wrong, but about getting the right outcome to satisfy shareholders and customers.” — Todd Marumoto, director of risk management, Mattel, Inc.

“It affects every line item of the P&L,” Kossovsky said.

The impact on D&O effectiveness will also certainly grab senior management’s attention.

“A typical board member makes about $250,000 per year to sit on the board for a term usually of about three years, and he’s usually sitting on three different boards,” Kossovsky said.

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“He’s looking at a personal loss of over $2 million” if a reputational hit leads to him being asked to step down from those boards.

According to Marumoto, risk managers can influence outcomes of a reputational event by working internally with investor relations and marketing to ensure the company is sending a consistent message, and to develop a coordinated response plan.

“Ultimately, you have to be responsible for all things that pass in front of you,” he said. “Partner with vendors you trust, be transparent in your efforts to mitigate risks, and develop relationships with government agencies.

“With reputation risk, it’s not always about right or wrong, but about getting the right outcome to satisfy shareholders and customers.”

Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at [email protected]
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