CYRIL TUOHY is managing editor of Risk & Insurance®.
As risk managers descend on Orlando, Fla., for the Risk and Insurance Management Society Inc.'s annual convention from April 19 to 23, there will be plenty of talk about how enterprise risk management (ERM) kept companies out of harm's way, or how the lack thereof is to blame for getting other companies in trouble.
A total of 16 sessions are listed under the ERM rubric this year, but perhaps none is expected to be more important than the sessions on how to use ERM to improve a company's credit ratings given the fact that agencies are now taking this strategy into account when assigning ratings.
The Wednesday session will be hosted by Steven J. Dreyer, practice leader, U.S. utilities and infrastructure ratings, for Standard & Poor's; Carol A. Fox, senior director, risk management, Convergys Corp.; and Laura Taylor, managing director, Aon Risk Services.
Also, don't miss the session hosted by Ellen S. Hexter, director of ERM for the Conference Board, and Jeffrey L. Vernor, global risk manager for Russell Investment Group, who will lead a separate ERM discussion on the successes and challenges of implementing an ERM program.
"Developing a solid risk program has many twists and turns, and it's easy to get lost along the way," says Mary Roth, executive director of RIMS. "RIMS 2009 will show you how to navigate the complexities of risk and stay on the path to success."
And in these times of capital constraints, a session titled "Selling to the C-Suite--The Role of ERM in Lowering the Cost of Capital" may well prove valuable for risk managers this year. Moderated by John Hayes, vice president, business resilience, New York Life Insurance, and Michael Yip, a vice president with Marsh, the session will also take place on Wednesday.
For executives looking to dip their toes into ERM for the first time, a session Monday titled "ERM Boot Camp" is for you. It will be hosted by members of RIMS' ERM Development Committee, which includes Fox; Kenneth B. Robinson, vice president, internal controls, Procter & Gamble; and Julie C. Pemberton, manager, enterprise risk management, Chiquita Brands International Inc.
RIMS 2009: THE NEW AUSTERITY?
Corporate spending this year is expected to weigh heavily on the minds and wallets of risk executives and insurance carriers, which typically host to a myriad of parties at the annual gathering.
No one needs reminding that insurance companies are reeling from billions of dollars in fourth-quarter and year-end losses due to higher-than-expected catastrophe claims payouts and big losses in investment income following a decline of nearly 34 percent in the Dow Jones Industrial Average in 2008.
And last fall, at least one large carrier was stung by criticism for hosting lavish parties for top brokers as it accepted billions of dollars in taxpayer funds. Having learned that lesson, carriers will likely want to keep their festivities for risk managers low-key.
Welcome to the new austerity, where too big a bash isn't going to sit well with investors and risk managers, especially if the market really starts to harden across all lines and premiums begin to rise significantly.
But the pressure isn't just coming from the carrier side. The buyer side is also feeling it. Risk managers arrive at this year's RIMS under directives from their chief financial officers and directors to trim their insurance programs as corporate employers grapple with recession.
Risk executives can expect to push hard for lower prices, smaller rate increases and better terms, particularly because switching carriers appears to make some economic sense, according to Greenwich Associates.
A new survey of 669 companies found that nearly 70 percent of U.S. companies that have switched carriers over the past 24 months reduced their premium rates by at least 5 percent, and more than 40 percent of those reporting a switch reduced their rates by 10 percent or more.
April 1, 2009
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