John R. Phelps, president of the Risk and Insurance Management Society Inc., said the biggest transition he's seen in 33 years of working in the industry is risk managers now seeing risk as "a source of potential value" instead of thinking of risk as "the enemy."
That "is a huge change in the risk management discipline and one which is still evolving today," said Phelps, who is director of Business Risk Solutions for Blue Cross and Blue Shield of Florida, Inc.
Phelps said traditional insurance management duties like purchasing and loss control are still vitally important, but that new opportunities exist for risk managers "who want to think more strategically about risk."
The most dangerous emerging risk today, he said, is geopolitical risk. That includes nuclear-armed rogue nations, unrest in the Middle East and the fragility of the global economy. "It's really an explosive situation," he said. "It's possible that all three of those could happen at the same time, and that would be the scariest emerging risk for any company."
Global changes have put pressure on companies to get risk management absolutely right the first time.
"From an internal company standpoint, the greatest risk of all is for companies to not have the right strategy," he said. "Right now, the likelihood of companies having the wrong strategy is high because of the extraordinary change in the business environment. Those with the wrong strategy will be punished quickly and severely. You can't get it 'roughly right' anymore. Those days are gone."
Phelps has also worked at Travelers, and Blue Cross Blue Shield in the Rochester, N.Y., region.
--By Cyril Tuohy
February 19, 2013
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