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Risk Insider: Marilyn Rivers

Workplace Safety Requires Consensus

By: | October 16, 2014 • 2 min read
Marilyn Rivers is director of risk and safety for the City of Saratoga Springs, a historic tourist destination in upstate New York. She chairs the PRIMA Institute for the Public Risk Management Association and was named Public Risk Manager of the Year by PRIMA in 2007. She can be reached at marilyn.rivers@saratoga-springs.org.

Each of us brings a personal perception of reality to our definitions of how safe our workplaces are.

Here’s the challenge we all face in making workplaces safe across the country. Place a group of folks in a room and ask them to put together a plan and protocols to make it safe. Ask them to reach consensus on locking down their workplace.

For those of us who have tried to walk our contemporaries through the process, it can be mind-numbing, especially when working in the public sector.

According to the latest Bureau of Labor Statistics, workers in local government have a higher incidence rate of nonfatal occupational injuries and illnesses (6.1 cases per 100 workers) than any other type of industry sector.

Public workspaces are designed for the community, the employees who provide the services and the folks who come to be served.

The balance between “by the people and for the people” can be treacherous.

These folks come in all shapes and sizes and temperaments. Their issues might be as mundane as a dog license and as complex as a child custody court case. The mix of service on any given day varies according to the weather, the deadline, the season and the crime.

Limiting access to public spaces requires a balance between the safety of the employee and the need for the public to feel there are no barriers to the services they seek.

Safety planning requires common sense and a sense of purpose. Both the public and the employee need to be satisfied that any approach to workplace safety is well-intentioned and does not restrict access to our unalienable right to good government.

Safety — one little word that carries a big message. Placing a barrier between the public and its government often creates suspicion and a cry of limitation or obstruction. Folks want to come face to face with the people whose taxes pay their government salaries.

The balance between “by the people and for the people” can be treacherous.

How safe is your workplace? Look around and measure the complacency of your co-workers.

Listen to the chatter — cameras that record your environment and monitor your safekeeping are construed as Big Brother watching. Gates, window service and counters that prohibit access are obstruction devices. Opponents of metal detectors and bag screenings argue they violate personal freedom and are unnecessarily invasive.

Employees within public spaces, however, will certainly testify that workplace safety measures are needed based upon statistical data, downright scary situations, questionable behavior and outright concern.

The process for establishing safety protocols is a journey best taken with an open mind and a sense of community.

Employees in all types of workplaces have to agree to participate in the protocols established for the good of the whole. If consensus cannot be reached, the results may be fatal.

Be tenacious and push for cooperation in agreeing that safety can be achieved without the perception of violation of privacy.

At the end of the day, each of us as risk managers have one goal — to get our employees home safe and sound to families awaiting their returns.

Read all of Marilyn Rivers’ Risk Insider contributions.

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Risk Insider: Zachary Gifford

13 Rules for Risk Management Success

By: | October 15, 2014 • 2 min read
Zachary Gifford is the Associate Director of Systemwide Risk Management, The California State University. He received a 2014 Risk All Star Award from Risk & Insurance®. He can be reached at zgifford@calstate.edu.

Over my 24-plus years in the insurance, general liability claims and risk management professions, I have learned that the following practices or attributes are critical for success.

With this opportunity, I would like to share with the  readers of Risk & Insurance® the practices and attributes that lead to success when working in a high energy, heavy work-volume environment in our respective organizations.

“Risk management is about people, not money. Money is why we have risk managers; however people are why we strive for excellence. One needs to be cognizant of the uninsurable costs of risk.”

The modern conventional wisdom is that folks need to “do more with less”. Let’s face it, our organizations are either beholden to stockholders, owners or the tax paying citizens of our great country. More than ever the pressures for producing high quality, high volume and cost-effective work product is expected.

The following are some proverbial words-of-wisdom from someone who is the boots on the ground….

  • Be the “get to yes” folks and not the “little dark rain cloud”. Risk management is in the position to assist stakeholders in making informed and sound decisions. Rarely should risk management provide an absolute “no” and if so, then the successful risk manager assists in providing alternative methods to assist in reaching the goal in question. In other words, provide the organization’s stake-holders information enough for them to make an informed decision.
  • Check your ego at the door when you enter the office. It is not about “you”, it is about “us” and “them”.
  • Risk management is about people, not money. Money is why we have risk managers; however people are why we strive for excellence. One needs to be cognizant of the uninsurable costs of risk.
  • Having a positive mental attitude is critical.
  • What would Woodrow Wilson Do? Woodrow Wilson said essentially; “In times of crises a thousand hasty counsels is worth one cool judgment. The goal is to provide light and not heat.”
  • Change is going to happen, embrace it.
  • Be forthright, honest, respectful of others and diplomatic.
  • Use your internal and external resources. Governmental entities do not have to worry about trade secrets or competition and generally public entity risk professionals like to share in their successes and “lessons learned.”
  • Do not reinvent the wheel. In all likelihood someone with institutional knowledge has “been there and done that.”
  • Communicate with stakeholders. They do not like surprises and do not wait to be asked to provide a report or information. Let stakeholders know of your successes and simultaneously help identify where organization success can be maximized or where failure can be mitigated.
  • Be timely and ready to address issues as they occur without losing focus of the horizon.
  • Communicate and collaborate with organizational personnel in developing and supporting a culture of risk management and safety.
  • Battleships turn slowly and sink fast…do not rest on your laurels.

Though the cynic may conclude much of the above is cliché’, it has been my experience that incorporating the above points into how one conducts their risk management endeavors benefits the organization, fosters a positive work environment and provides the foundation for building and/or maintaining a quality risk management enterprise.

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Sponsored: Liberty International Underwriters

A Renaissance In U.S. Energy

Resurgence in the U.S. energy industry comes with unexpected risks and calls for a new approach.
By: | October 15, 2014 • 5 min read

SponsoredContent_LIU
America’s energy resurgence is one of the biggest economic game-changers in modern global history. Current technologies are extracting more oil and gas from shale, oil sands and beneath the ocean floor.

Domestic manufacturers once clamoring for more affordable fuels now have them. Breaking from its past role as a hungry energy importer, the U.S. is moving toward potentially becoming a major energy exporter.

“As the surge in domestic energy production becomes a game-changer, it’s time to change the game when it comes to both midstream and downstream energy risk management and risk transfer,” said Rob Rokicki, a New York-based senior vice president with Liberty International Underwriters (LIU) with 25 years of experience underwriting energy property risks around the globe.

Given the domino effect, whereby critical issues impact each other, today’s businesses and insurers can no longer look at challenges in isolation one issue at a time. A holistic, collaborative and integrated approach to minimizing risk and improving outcomes is called for instead.

Aging Infrastructure, Aging Personnel

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Robert Rokicki, Senior Vice President, Liberty International Underwriters

The irony of the domestic energy surge is that just as the industry is poised to capitalize on the bonanza, its infrastructure is in serious need of improvement. Ten years ago, the domestic refining industry was declining, with much of the industry moving overseas. That decline was exacerbated by the Great Recession, meaning even less investment went into the domestic energy infrastructure, which is now facing a sudden upsurge in the volume of gas and oil it’s being called on to handle and process.

“We are in a renaissance for energy’s midstream and downstream business leading us to a critical point that no one predicted,” Rokicki said. “Plants that were once stranded assets have become diamonds based on their location. Plus, there was not a lot of new talent coming into the industry during that fallow period.”

In fact, according to a 2014 Manpower Inc. study, an aging workforce along with a lack of new talent and skills coming in is one of the largest threats facing the energy sector today. Other estimates show that during the next decade, approximately 50 percent of those working in the energy industry will be retiring. “So risk managers can now add concerns about an aging workforce to concerns about the aging infrastructure,” he said.

Increasing Frequency of Severity

SponsoredContent_LIUCurrent financial factors have also contributed to a marked increase in frequency of severity losses in both the midstream and downstream energy sector. The costs associated with upgrades, debottlenecking and replacement of equipment, have increased significantly,” Rokicki said. For example, a small loss 10 years ago in the $1 million to $5 million ranges, is now increasing rapidly and could readily develop into a $20 million to $30 million loss.

Man-made disasters, such as fires and explosions that are linked to aging infrastructure and the decrease in experienced staff due to the aging workforce, play a big part. The location of energy midstream and downstream facilities has added to the underwriting risk.

“When you look at energy plants, they tend to be located around rivers, near ports, or near a harbor. These assets are susceptible to flood and storm surge exposure from a natural catastrophe standpoint. We are seeing greater concentrations of assets located in areas that are highly exposed to natural catastrophe perils,” Rokicki explained.

“A hurricane thirty years ago would affect fewer installations then a storm does today. This increases aggregation and the magnitude for potential loss.”

Buyer Beware

On its own, the domestic energy bonanza presents complex risk management challenges.

However, gradual changes to insurance coverage for both midstream and downstream energy have complicated the situation further. Broadening coverage over the decades by downstream energy carriers has led to greater uncertainty in adjusting claims.

A combination of the downturn in domestic energy production, the recession and soft insurance market cycles meant greatly increased competition from carriers and resulted in the writing of untested policy language.

SponsoredContent_LIU

In effect, the industry went from an environment of tested policy language and structure to vague and ambiguous policy language.

Keep in mind that no one carrier has the capacity to underwrite a $3 billion oil refinery. Each insurance program has many carriers that subscribe and share the risk, with each carrier potentially participating on differential terms.

“Achieving clarity in the policy language is getting very complicated and potentially detrimental,” Rokicki said.

Back to Basics

SponsoredContent_LIUHas the time come for a reset?

Rokicki proposes getting back to basics with both midstream and downstream energy risk management and risk transfer.

He recommends that the insured, the broker, and the carrier’s underwriter, engineer and claims executive sit down and make sure they are all on the same page about coverage terms and conditions.

It’s something the industry used to do and got away from, but needs to get back to.

“Having a claims person involved with policy wording before a loss is of the utmost importance,” Rokicki said, “because that claims executive can best explain to the insured what they can expect from policy coverage prior to any loss, eliminating the frustration of interpreting today’s policy wording.”

As well, having an engineer and underwriter working on the team with dual accountability and responsibility can be invaluable, often leading to innovative coverage solutions for clients as a result of close collaboration.

According to Rokicki, the best time to have this collaborative discussion is at the mid-point in a policy year. For a property policy that runs from July 1 through June 30, for example, the meeting should happen in December or January. If underwriters try to discuss policy-wording concerns during the renewal period on their own, the process tends to get overshadowed by the negotiations centered around premiums.

After a loss occurs is not the best time to find out everyone was thinking differently about the coverage,” he said.

Changes in both the energy and insurance markets require a new approach to minimizing risk. A more holistic, less siloed approach is called for in today’s climate. Carriers need to conduct more complex analysis across multiple measures and have in-depth conversations with brokers and insureds to create a better understanding and collectively develop the best solutions. LIU’s integrated business approach utilizing underwriters, engineers and claims executives provides a solid platform for realizing success in this new and ever-changing energy environment.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty International Underwriters. The editorial staff of Risk & Insurance had no role in its preparation.


LIU is part of the Global Specialty Division of Liberty Mutual Insurance.
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