Risk Insider: Eric Copple

For Better Renewals, Follow Pixar’s Lead

By: | August 30, 2018 • 2 min read
Eric B. Copple CIC, CRM is a risk management adviser for Arthur J. Gallagher & Co. Throughout his 20 years of brokerage experience, he has helped clients build effective risk management systems to stay on the road to success. He can be reached at Eric_Copple@ajg.com.

Everybody loves a good story. Your insurance underwriter is no exception. They would love to know what makes your company stand out as the true hero, a rose in a field of thorns, but the underwriting process is slanted toward identifying the villains in your story instead.

So, how do you control the message of your company in the insurance renewal process? How do you assure that you are getting the underwriter to see you as the hero?

You have to create the risk management story.

When learning how to create a good story it might help to turn to the experts at Pixar Entertainment. After all, they have made gobs of money by telling the right story: not only the villains and heroes, but also the cast of characters and scenarios that capture the hearts of viewers both young and old.

Emma Coats is an accomplished storyboard artist who formerly worked at Pixar. Emma once said, “Every good movie that Pixar puts out follows the same story structure,” described as follows:

“Once upon a time, there was __________. Every day, __________. One day, __________. Because of that, __________. Because of that, _________. Until finally,__________.”

I would argue that every company’s risk-management challenges and processes fall in line with this story structure, both the exposures AND the treatments.

We rarely give full credit to the character who admits guilt and promises to do better. We do, however, give credit to those who can prove a track record of positive change in the past.

Businesses often struggle to manage risk because they lack a framework to properly identify, prioritize, and therefore mitigate risk. Over and over again, we have witnessed risk-managers’ attempts to get key stakeholders to identify exposures while also creating ways to clarify the outcome of any potential issue. This fruitless struggle prevents them from being able to create a good story.

We rarely give full credit to the character who admits guilt and promises to do better. We do, however, give credit to those who can prove a track record of positive change in the past.

Use this as an exercise for your own businesses. Take a claim or lawsuit from your experience and plug it into that storyboard. Perhaps it can help you identify a valuable solution.

Take this example:

“Once upon a time there was a profitable company that made widgets. Every day the employees stamped out widgets on their production machines. One day, a storm blew in. As a result, the roof blew off of their building, causing their manufacturing equipment to get wet and damaging valuable electronics. Ultimately, the company was unable to make widgets anymore.”

What can you do to change the ending of that story? How about:

“Once upon a time there was a profitable company that made widgets. Every day the employees stamped out widgets on their production machines. One day, someone asked a question about “duplication” of processes. In response, one of the owners became concerned about what could happen if the machines were damaged. As a result, the company made an agreement with another local machine shop to use their excess machinery in case of an emergency. Ultimately, everyone agreed that this was a good back-up plan, and they went about their merry way with a very successful business.”

More from Risk & Insurance

More from Risk & Insurance

2018 Risk All Stars

Stop Mitigating Risk. Start Conquering It Like These 2018 Risk All Stars

The concept of risk mastery and ownership, as displayed by the 2018 Risk All Stars, includes not simply seeking to control outcomes but taking full responsibility for them.
By: | September 14, 2018 • 3 min read

People talk a lot about how risk managers can get a seat at the table. The discussion implies that the risk manager is an outsider, striving to get the ear or the attention of an insider, the CEO or CFO.

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But there are risk managers who go about things in a different way. And the 2018 Risk All Stars are prime examples of that.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Goodyear’s Craig Melnick had only been with the global tire maker a few months when Hurricane Harvey dumped a record amount of rainfall on Houston.

Brilliant communication between Melnick and his new teammates gave him timely and valuable updates on the condition of manufacturing locations. Melnick remained in Akron, mastering the situation by moving inventory out of the storm’s path and making sure remediation crews were lined up ahead of time to give Goodyear its best leg up once the storm passed and the flood waters receded.

Goodyear’s resiliency in the face of the storm gave it credibility when it went to the insurance markets later that year for renewals. And here is where we hear a key phrase, produced by Kevin Garvey, one of Goodyear’s brokers at Aon.

“The markets always appreciate a risk manager who demonstrates ownership,” Garvey said, in what may be something of an understatement.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Dianne Howard, a 2018 Risk All Star and the director of benefits and risk management for the Palm Beach County School District, achieved ownership of $50 million in property storm exposures for the district.

With FEMA saying it wouldn’t pay again for district storm losses it had already paid for, Howard went to the London markets and was successful in getting coverage. She also hammered out a deal in London that would partially reimburse the district if it suffered a mass shooting and needed to demolish a building, like what happened at Sandy Hook in Connecticut.

2018 Risk All Star Jim Cunningham was well-versed enough to know what traditional risk management theories would say when hospitality workers were suffering too many kitchen cuts. “Put a cut-prevention plan in place,” is the traditional wisdom.

But Cunningham, the vice president of risk management for the gaming company Pinnacle Entertainment, wasn’t satisfied with what looked to him like a Band-Aid approach.

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Instead, he used predictive analytics, depending on his own team to assemble company-specific data, to determine which safety measures should be used company wide. The result? Claims frequency at the company dropped 60 percent in the first year of his program.

Alumine Bellone, a 2018 Risk All Star and the vice president of risk management for Ardent Health Services, faced an overwhelming task: Create a uniform risk management program when her hospital group grew from 14 hospitals in three states to 31 hospitals in seven.

Bellone owned the situation by visiting each facility right before the acquisition and again right after, to make sure each caregiving population was ready to integrate into a standardized risk management system.

After consolidating insurance policies, Bellone achieved $893,000 in synergies.

In each of these cases, and in more on the following pages, we see examples of risk managers who weren’t just knocking on the door; they were owning the room. &

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Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, clarity of vision and passion.

See the complete list of 2018 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at dreynolds@lrp.com.