Mark A. Delillo, president of RIMS 1998-99 talks to Lee Coppack.
LC: What do you think are the most supportive activities a risk management organisation such as RIMS can undertake for its members in the current climate?
MD: Risk managers are being expected by their organisations to do more with less. Coupling this with the demands of the expanding risk profiles to be managed, risk managers must have greater resources available to them to be more efficient and effective. RIMS is responding to these needs through enhanced technology, expanded educational offerings and advanced educational delivery systems, to name a few.
LC: What qualities do you think the risk manager of the future will need? To what extent are these attributes which people can bring to the profession when they start and to what extent do they need to be learned by experience?
MD: The single most important attribute for the risk manager of today and the future, in my opinion, is the art of communication, specifically listening. The ability to listen, comprehend and inquire, along with superior written and oral skills, is a must. The technical skills needed will vary greatly by organisation, but at a minimum include a strong financial background or education, firm understanding of the legal environment, knowledge of the regulatory process and basic insurance experience - not necessarily insurance experience from the perspective of purchasing, but of the underlying concepts of insurance as applied to risk. I am a bit biased but I favour a claims background, since claims people have the opportunity to see all sides of the risks from the underwriting intent to the engineering viewpoint, the practicality of losses and the resulting outcomes.
LC: What career advice would you give a young person wondering about risk management?
MD: I believe risk management is a dynamic field that will continue to grow in importance in organisations and create career opportunities for young people. I would encourage those contemplating risk management as a career to seek out opportunities for internships and co-ops for first hand experience and to pursue a risk management curriculum at the undergraduate level. That will put them well ahead of where most of us in the business today began.
LC: At what level in organisations generally is the position of the risk manager? Is it changing and if so how?
MD: The significance of risk management in the corporate hierarchy will vary from organisation to organisation. Much depends on three factors: the risk philosophy of the firm, the risk management experiences of the firm and the proven skills and abilities of the individual. The emergence of the chief risk officer concept and the impact of enterprise-wide risk management have highlighted the relative importance of risk management as a discipline and a business process. The challenge for the individual is to understand his/her organisation's risk philosophy, modify that philosophy if appropriate and feasible, and add value to the organisation in the process. This applies whether the areas for growth and change within the organisation are financial, operational or regulatory in nature. I believe this opportunity for growth exists within any organisation.
LC: To what extent are risk managers still concerned about outsourcing?
MD: The issue of outsourcing the risk management function has been an area of concern expressed by many risk managers and RIMS members. Personally, I believe outsourcing of risk management is shortsighted and a reflection of a lack of understanding by management of the potential value inherent in the discipline. Risk managers, by training and experience, are process experts with an in-depth knowledge of their organisations and expertise in the identification and quantification of risk. No other function within an organisation has that perspective. To rely upon an outsider, even a former employee, will not be as effective and efficient and will not maximise the value-added potential of the discipline to the organisation.
LC: What opportunities/risks do US risk managers associate with the development of intranet and related technology and systems?
MD: As stated earlier, we all face the pressures of doing more with less. The capabilities of intranet applications will improve communications, create awareness and help develop an internal risk culture. Exchanging information internally and with remote locations at electronic speed improves efficiency and will allow the risk manager to expand his/her sphere of influence within the organisation.
LC: What would a US risk manager put on his/her list for Santa Claus?
MD: If asked, many risk managers might say continued stability in the commercial property/casualty insurance marketplace. Personally, I would like to see the industry as a whole move toward improved efficiencies, increased quality in all aspects of our business dealings and a universal recognition of the value of risk management as a business process.
Mark A. Delillo is president of RIMS and vice president, risk management for Celotex Corporation, a Tampa, Florida based manufacturer of building materials. Lee Coppack is co-editor of Global Reinsurance.