Managing U.S. Nuclear Fuel Risks
In the highly complex field of nuclear energy, Timothy Fischer makes his work as chief risk officer at BWX Technologies appear simple.
For years, BWXT’s board sought an enterprise risk management program, but efforts always fizzled. Then the Lynchburg, Va.-based nuclear business was spun off from Babcock & Wilcox (B&W) in June 2015, and the new executive team seized the moment to finally get their plan.
Fischer, former director of insurance at B&W, helped separate the insurance portfolio during the spin-off (which won him Risk All Star recognition last year) and was tapped for the job.
Swiftly crafting a comprehensive ERM program puts Fischer back on the 2016 Risk All Stars list.
The former U.S. Navy officer knew if he was going to succeed, he needed a standout team to help draft the plan. Then he’d need to educate the entire company about its intricate details.
He first recruited the CEO to chair the group and help select about 15 senior leaders across the organization to develop a risk registry.
“Following the spin-off, Tim commissioned a new BWXT executive risk committee and assigned ‘risk ownership’ throughout the organization resulting in accountable leaders standing shoulder-to-shoulder throughout our operations and functional areas with a renewed focus on risk management,” said James Canafax, chief compliance officer at BWXT.
“Our business is super unique. We have one customer, one product surrounding that, so it’s a different business than a lot of other companies out there.” — Timothy Fischer, chief risk officer, BWX Technologies
Fischer made sure everyone focused on the same issues. He developed rating guides in order to minimize subjectivity during risk assessments.
“Importantly, Tim led a re-education of those resources, driving a common language and uniform risk-ranking methodologies to ensure BWXT shares a consistent understanding across the enterprise with respect to inherent risks, emerging risks, risk appetite and risk tolerances.”
BWXT, which handles highly enriched nuclear material, was already extremely good at risk management, Fisher said. That poses a challenge, however, if employees get complacent when risks are so well mitigated, he said. The severity of an accident is so monumental that controls must be in place to mitigate risk to an almost negligible likelihood.
“Our business is super unique,” Fischer said. “We have one customer, one product surrounding that, so it’s a different business than a lot of other companies out there.”
Fischer delivers a comprehensive yet simple annual risk report and quarterly memos to keep risk top of mind for everyone.
“I got a comment from one colleague who runs an internal audit group. He complimented me on how simple the output looks knowing full well there’s tons and tons of detail work behind it,” said Fischer, who worked with Marsh prior to joining B&W.
“As a former U.S. naval officer who has not only served our country but has done so on a submarine powered by BWXT-manufactured equipment, combined with the nuclear insurance experience … Tim brings a unique and disciplined skill set that makes him well-suited to lead BWXT’s risk management practices,” Canafax said. &
R&I: What was your first job?
Working as a signalman for Consolidated Rail Corp. I did that for about a year and a half before I got my first risk management job as a claims agent for ConRail. That was a self-insured company, so they administered their own claims.
R&I: How did you come to work in risk management?
ConRail got acquired by two different railroads and was split up, so I had the opportunity to either go with one of the railroads or look outside for another position, and I wanted to do more than just work with claims. I wanted to be exposed to the corporate risk management side of things. So I found a job as a risk manager for Suburban Propane in Whippany, N.J.
R&I: What is the risk management community doing right?
We’re working closely with brokers and underwriters and communicating internally to bring the insurance expertise to companies that need it.
R&I: What could the risk management community be doing a better job of?
Risk managers should be aware of non-traditional risks and focusing on ERM, versus just the traditional insurance procurement function. That’s where the future of our profession is going.
R&I:: What was the best location and year for the RIMS conference and why?
This is a little self-serving, but I thought Vancouver in 2011 was great because I had never been there but always wanted to go.
R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?
Risk managers have to be more fluent and competent in the financial world. Just procuring insurance isn’t enough anymore. You have to have a basic level of financial knowledge to communicate with not only internal treasury and CFOs, but also with underwriters and insurers.
R&I: What emerging commercial risk most concerns you?
Social engineering. The onslaught of fraudsters is relentless. Companies have to be vigilant. But the coverage surrounding that sort of risk is also emerging, so risk managers will have to pay close attention to that and keep up with that evolving coverage.
R&I: What insurance carrier do you have the highest opinion of?
We had a major loss recently and there was a handful of insurers who paid on that claim which I thought were exceedingly professional: ACE (now Chubb), Ironshore and XL (now XL Catlin).
R&I: How much business do you do direct versus going through a broker?
We use a broker for everything.
R&I: Is the contingent commission controversy overblown?
It probably was a little bit overblown, but I think it’s good that things are more transparent now.
R&I: Are you optimistic about the U.S. economy or pessimistic and why?
I’m probably a little more pessimistic than optimistic. I just don’t see signs of strength out there. There are still companies with tons of cash outside the U.S. which can’t really bring it back in a way that makes sense. U.S. oil production is way down since the price of oil is so low. Of course, the lower gas prices help the average consumer and lowers overhead costs for businesses, so it’s a little bit of a mixed bag.
R&I: Who is your mentor and why?
My mentor in this business is Joe Racansky. He was the director of risk management and my boss at CyTec Industries, and I learned as much from him as anybody in my career.
R&I: What have you accomplished that you are proudest of?
Successfully resolving claims stemming from the Lac-Megantic train derailment in 2013.
R&I: How many e-mails do you get in a day?
I’d say about 100.
R&I: How many do you answer?
All the important ones.
R&I:: What’s the best restaurant you’ve ever eaten at?
Prime 112 in South Beach, Miami. It was the freshest tuna I’ve ever had, and it was with the team from Aon, so it was great food and great company.
R&I: What is your favorite drink?
Gin and tonic.
R&I: What is your favorite book or movie?
My favorite movie is “Bull Durham.” It’s a baseball movie.
R&I: Who’s your favorite baseball team?
The Cincinnati Reds.
R&I: What is the most unusual/interesting place you have ever visited?
Key West, Fla., is pretty interesting. My wife and I have been there a few times and you always see something different.
R&I: If the world has a modern hero, who is it and why?
I was moved by the Chris Kyle story. I thought his life and story were inspiring.
R&I: What do your friends and family think you do?
I think they think I just buy insurance, when it’s really more comprehensive than that. They don’t know about meeting with underwriters and contract review and working on M&A deals.
Your Workers’ Safety May Be at Risk, But Can You See the Threat?
Deadly violence at work is covered extensively by the media. We all know the stories.
Last year, ex-reporter Bryce Williams shot and killed two former colleagues while they conducted a live interview at a mall in Virginia. In February of this year, Cedric Larry Ford opened fire, killing three and injuring 12 at a Kansas lawn mower manufacturing company where he worked. Also in 2015, 14 people died and 22 were wounded by Syed Farook, a San Bernardino, California county health worker, and his wife, who had terroristic motives.
Active shooter scenarios, however, are just the tip of the iceberg when it comes to violence at work.
“Workplace violence is much broader and more pervasive than that. There are smaller acts of violence happening every day that directly impact organizations and their employees,” said Bertrand Spunberg, Executive Risks Practice Leader, Hiscox USA. “We just don’t hear about them.”
According to statistics compiled by the FBI, the chance that any business will experience an active shooter scenario is about 1 in 457,000, and the chance of death or injury by an active shooter at work is about 1 in 1.6 million.
The fact that deadly attacks — which are relatively rare — get the most media attention may lead employers to underestimate the risk and dismiss the issue of workplace violence as media hype. But any act that threatens the physical or psychological safety of an employee or that causes damage to business property or operations is serious and should not be taken lightly.
“One of the core responsibilities that any organization must fulfill is keeping employees safe, and honoring that duty is becoming more challenging than ever,” Spunberg said.
“Workplace violence is much broader and more pervasive than that. There are smaller acts of violence happening every day that directly impact organizations and their employees. We just don’t hear about them.”
— Bertrand Spunberg, Executive Risks Practice Leader, Hiscox USA
Desk Rage and Bullying: The Many Forms of Workplace Violence
Bullying, intimidation, and verbal abuse all have the potential to escalate into confrontations and a physical assault or damage to personal property. These violent acts don’t necessarily have to be perpetrated by a fellow employee; they could come from a friend, family member or even a complete stranger who wants to target a business or any of its workers.
Take for example the man who killed three workers at a Colorado Spring Planned Parenthood in April. He had no affiliation with the organization or any of its employees, but targeted the clinic out of his own sense of religious duty.
Companies are not required to report incidents of violence and many employees shy away from reporting warning signs or suspicious behavior because they don’t want to worsen a situation by inviting retaliation. It’s easy, after all, to attribute the occasional surly attitude to typical work-related stress, or an office argument to simple personality differences that are bound to emerge occasionally.
Sometimes, however, these are symptoms of “desk rage.”
According to a study by the Yale School of Management, nearly one quarter of the population feels at least somewhat angry at work most of the time; a condition they termed “chronic anger syndrome.” That anger can result from clashes with fellow coworkers, from the stress of heavy workloads, or it can overflow from family or financial problems at home.
Failure to recognize this anger as a harbinger of violence is one key reason organizations fail to prevent its escalation into full-blown attacks. Bryce Williams, for example, had a well-documented track record of volatile and aggressive behavior and had already been terminated for making coworkers uncomfortable. As he was escorted from the news station from which he was terminated, he reportedly threatened the station with retaliation.
Solving Inertia, Spurring Action
Many organizations lack the comprehensive training to teach employees and supervisors to recognize these warning signs and act on them.
“The most critical gap in any kind of workplace violence preparedness program is supervisory inertia, when people in positions of authority fail to act because they are scared of being wrong, don’t want to invade someone’s privacy, or fear for their own safety,” Spunberg said.
Failing to act can have serious consequences. Loss of life, injury, psychological harm, property damage, loss of productivity and business interruption can all result from acts of violence. The financial consequences can be significant. In the case of the San Bernardino shootings, for example, at least two claims were made against the county that employed the shooter seeking $58 million and $200 million.
Although all business owners have a workplace violence exposure, 70 percent of organizations have no plans in place to avoid or mitigate workplace violence incidents and no insurance coverage, according to the National Institute for Occupational Safety & Health.
“Most companies are vastly underprepared,” Spunberg said. “They don’t know what to do about it.”
Small- to medium-sized organizations in particular lack the resources to develop risk mitigation plans.
“They typically lack a risk management department or a security department,” Spunberg said. “They don’t have the internal structure that dictates who supervisors should report a problem to.”
With its workplace violence insurance solution, Hiscox aims to educate companies about the risk and provide a solution to help bridge the gap.
“The goal of this insurance product is not so much to make the organization whole again after an incident — which is the usual function of insurance — but to prevent the incident in the first place,” Spunberg said.
Hiscox’s partnership with Control Risks – a global leader in security risk management – provides clients with a 24/7 resource. The consultants can provide advice, come on-site to do their own assessment, and assist in defusing a situation before it escalates. Spunberg said that any carrier providing a workplace violence policy should be able to help mitigate the risk, not just provide coverage in response to the resultant damage.
“We urge our clients to call them at any time to report anything that seems out of ordinary, no matter how small. If they don’t know how to handle a situation, expertise is only a phone call away,” Spunberg said.
The Hiscox Workplace Violence coverage pays for the services of Control Risks and includes some indemnity for bodily injury as well as some supplemental coverage for business interruption, medical assistance and counseling. Subvention funds are also available to assist organizations in the proactive management of their workplace violence prevention program.
“Coverage matters, but more importantly we need employees and supervisors to act,” Spunberg said. “The consequences of doing nothing are too severe.”
To learn more about Hiscox’s coverage for small-to-medium sized businesses, visit http://www.hiscoxbroker.com/.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Hiscox USA. The editorial staff of Risk & Insurance had no role in its preparation.