By DAN REYNOLDS, senior editor of Risk & Insurance®
As 2010 comes to an end, much of the chaos of 2008 and 2009 fueled by lies and greed is petering out. Generally, risk managers have much to be thankful for, at least in the transactional sense. Rates are low and getting lower. Renewals are being battened down that are leaving many smiling. But one can always do better and it is in that spirit that we present a wish list for risk managers for 2011.
-- Wish No. 1 would be that the profession of risk management continues to grow in status. By that I mean not that its practitioners drive better cars or sign mortgages on bigger houses. Rather, that in the business dialogue, that their colleagues listen to risk managers even more. Part of that wish for better communication is that companies do a better job of creating cultures of transparency in which risk managers are able to ask questions in whatever corner of the company they need to and get straight answers. That means in finance, the true risk of a hedge be fully vetted and discussed. That means that in medicine, every practitioner, no matter how brilliant, well educated and egotistical, be held accountable for their actions and interact with their colleagues in a clear and cogent manner that leaves no room for error. Speaking of clarity and transparency ...
-- Wish No. 2 focuses on the behavior of brokers. Contingent commissions or no contingent commissions, greater transparency industry wide is needed in the area of brokering commissions and fees. Risk managers shouldn't have to be CPA's to figure out their brokers' fee structure and how that fee structure interfaces with the premiums charged by the carriers. There is too much vagueness in how fees and commissions are charged. An industry that would reach more toward uniformity and clarity and distance itself from cunning tricks of the accounting ledger would be more welcome. Think residential Realtors and their universally understood and accepted 6 percent flat commission.
-- Wish No. 3 is that risk managers be bolder. By their nature, risk managers tend to keep it close to the vest. But they cannot advance their profession and by extension make our economy more stable by being passive. That means that they have to make people mad, push and pull them out of their comfort zones, and like a good trial attorney get people to blurt out the smelly dark truth before they know what hit them. Think Tom Cruise's character driving Jack Nicholson's over the edge in A Few Good Men.
(Read Managing Editor Cyril Tuohy's 2011 "Wish-Not" List here.)
December 1, 2010
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