Column: Risk Management

Opinion | The Risks of New Technologies Are Ignored for the Sake of ‘Progress’

By: | September 14, 2018 • 2 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

Imagine a world where, in one year, a war claimed 16 million lives and another 500 million were infected by a flu pandemic, killing 50 million.

Imagine a time where only six percent of Americans graduated from high school. Imagine eight percent of homes having a telephone and a three-minute call from Denver to New York costing $11.

Imagine a trip from London to New York taking five days, and one from Australia to London taking three and a half months.

Imagine no more. That was 1918.  A mere 100 years ago. How things have changed and at breakneck speed.

Ethical Transformation 

Consider that in 1956, 5 MB of RAM cost $120,000 and you needed a truck to move it. Today, one TB of memory is only $99 and can easily be lost in your pocket. That is a 10-trillion-fold price performance improvement.

Lifespans have doubled. Food is 20 times cheaper. Energy is 50 times cheaper. Global income has tripled. Connection to the internet is 1-million-fold faster and cheaper.

Such technological transformation is a good thing.

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And transformation is set on an even faster track going forward. Currently half the planet is connected to the internet. In five years, it is expected the whole planet will be connected, with unparalleled internet connection speeds.

This means that four billion more minds will have access to vast amounts of information, enabling everyone on the planet to solve problems like we’ve never seen before. It’s dizzying just thinking about it.

But maybe it’s the risk manager in me. The fun sponge. I trust technology. But sadly, I do not trust all humans.

Eight billion minds transforming our planet, all with good intentions … right?

Consider CRISPR, a powerful new gene-editing technology. This tool can manipulate genes and delete undesirable traits with high precision. It has the potential to eliminate diseases, enhance the nutrition and endurance of food and to help us fully understand the human genome and what each gene does.

This is revolutionary, but somehow I feel we may need to pause and take a breath. Do a little risk assessment.

I once saw an MIT experiment where a kitten was born glowing in the dark. I’ve also read of the successful cloning of primates in China. I have been shown a future where gene editing could produce “designer babies” with superhuman skills and abilities.

Here is where I struggle. Just because we can do these things, should we? I shudder at the thought of the unintended risks and consequences that could transpire from such gene editing in nature. This technological transformation train zooms ahead with no governing ground rules and no ethical frameworks to constrain and guide us as a society.

Let’s take a collective breath. &

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 [email protected]