Risk Management

The Profession

Avis Budget Group’s director of risk management, Barbara Vitale, lauds the industry for bringing more women into the fold.
By: | May 4, 2016 • 5 min read

052016_profession_bio
R&I: What was your first job?

I was working as a paralegal for a N.J. insurance company. They provided free insurance classes conducted by the Insurance Institute of America. I wanted to learn about the business, so I received my certificate in general insurance. That came in handy reviewing the insurance provisions of contracts. Eventually I received my ARM. An opportunity came up at a large gas utility, and I expanded my duties as a paralegal working for the VP of risk management. When he retired, I was offered the position of risk manager.

R&I: How has your experience as a paralegal influenced your risk management career?

[It] has been invaluable to my success as a risk manager. I did everything from litigation, contracts, mergers and acquisitions, to preparing SEC filings. I became well versed in the operations and business risks of a public company from a legal perspective.

R&I: What is the risk management community doing right?

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We’re focused on understanding how rapidly the world is changing. Risk managers and carriers are making an effort to understand all the risks commensurate with being global companies. Another major change is that women have become a bigger part of risk management over the past 20 years. In fact, my department is all women.

R&I: What could the risk management community be doing a better job of?

We need to get more people involved in risk management. It’s so much more than just buying insurance. You can be impactful for your company in so many ways as they come to trust and value you.

Another major change is that women have become a bigger part of risk management over the past 20 years.

R&I: What was the best location and year for the RIMS conference and why?

I really loved New Orleans. We’re in the business of dealing with risk and disaster and catastrophe, and the year we were there, it was right after Hurricane Katrina. It was a testimony to risk managers that we wanted to be there. Disaster recovery and continuity are what we’re about.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

Having more women in the field is one. Another is the way the industry has become so multifaceted as well as responsive to emerging risks like cyber. Risk managers are much more involved with their companies’ operations, and it’s become more challenging as we keep abreast of rapidly changing issues.

R&I: What emerging commercial risk most concerns you?

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We’re all holding our breath on cyber risk. It’s still so unknowable, and anything can happen that you’re not prepared for, even with the coverage that’s out there. This is an area where we’ll have to wait and see how the risk evolves and how products develop. Apple just learned that the FBI could hack into its phones and I bet they never saw that coming!

R&I: What insurance carrier do you have the highest opinion of?

CNA. I can’t say enough good things about them. We have many unique needs, and they’ve stepped up to partner with us on meeting all of them.

R&I: How much business do you do direct versus going through a broker?

We place all our coverage though our amazing partners, Aon and Lockton.

We’re all holding our breath on cyber risk. It’s still so unknowable, and anything can happen that you’re not prepared for, even with the coverage that’s out there.

R&I: Are you optimistic about the U.S. economy or pessimistic, and why?

Very optimistic. We have a lower unemployment rate than we’ve had in many years and more job creation. And let’s not forget about the gas prices!

R&I: Who is your mentor and why?

My mom was my mentor. My dad died young and she was left raising four kids at the age of 40. She was a businesswoman in the 1960s and taught me the value of standing on my own two feet as a woman. Most importantly, she was the kindest woman I ever met.

R&I: What have you accomplished that you are proudest of?

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I’m very proud of my excellent team. I’ve spent a lot of time mentoring them and “boring” them with my business philosophy, but I tell them that if I were to get hit by a bus on any given day, they could jump in and do my job on that first, sad day.

R&I: What is your favorite book or movie?

“Madame Bovary.” I met my husband at Rutgers in a French literature class, and we were reading that book at the time, so it’s my favorite.

R&I: What is the most unusual/interesting place you have ever visited?

It’s a toss-up between Israel and Egypt; the pyramids were so exciting but so was Bethlehem and Masada.

R&I: What is the riskiest activity you ever engaged in?

Talking back to the Sisters of Charity; like O’Reilly, I was a bold, fresh article!

R&I: If the world has a modern hero, who is it and why?

I really admire Pope Francis. He’s trying to be an enlightened pope who embraces all people and religions, and he brings some needed change to Catholicism.

R&I: What about this work do you find the most fulfilling or rewarding?

Every day is a new challenge and it never gets boring.

R&I: What do your friends and family think you do?

They think I meet with brokers and carriers and buy insurance and handle big insurance claims and that’s it. If they only knew!




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Property

Insurers Take to the Skies

This year’s hurricane season sees the use of drones and other aerial intelligence gathering systems as insurers seek to estimate claims costs.
By: | November 1, 2017 • 6 min read

For Southern communities, current recovery efforts in the wake of Hurricane Harvey will recall the painful devastation of 2005, when Katrina and Wilma struck. But those who look skyward will notice one conspicuous difference this time around: drones.

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Much has changed since Katrina and Wilma, both economically and technologically. The insurance industry evolved as well. Drones and other visual intelligence systems (VIS) are set to play an increasing role in loss assessment, claims handling and underwriting.

Farmers Insurance, which announced in August it launched a fleet of drones to enhance weather-related property damage claim assessment, confirmed it deployed its fleet in the aftermath of Harvey.

“The pent-up demand for drones, particularly from a claims-processing standpoint, has been accumulating for almost two years now,” said George Mathew, CEO of Kespry, Farmers’ drone and aerial intelligence platform provider partner.

“The current wind and hail damage season that we are entering is when many of the insurance carriers are switching from proof of concept work to full production rollout.”

 According to Mathew, Farmers’ fleet focused on wind damage in and around Corpus Christi, Texas, at the time of this writing. “Additional work is already underway in the greater Houston area and will expand in the coming weeks and months,” he added.

No doubt other carriers have fleets in the air. AIG, for example, occupied the forefront of VIS since winning its drone operation license in 2015. It deployed drones to inspections sites in the U.S. and abroad, including stadiums, hotels, office buildings, private homes, construction sites and energy plants.

Claims Response

At present, insurers are primarily using VIS for CAT loss assessment. After a catastrophe, access is often prohibited or impossible. Drones allow access for assessing damage over potentially vast areas in a more cost-effective and time-sensitive manner than sending human inspectors with clipboards and cameras.

“Drones improve risk analysis by providing a more efficient alternative to capturing aerial photos from a sky-view. They allow insurers to rapidly assess the scope of damages and provide access that may not otherwise be available,” explained Chris Luck, national practice leader of Advocacy at JLT Specialty USA.

“The pent-up demand for drones, particularly from a claims-processing standpoint, has been accumulating for almost two years now.” — George Mathew, CEO, Kespry

“In our experience, competitive advantage is gained mostly by claims departments and third-party administrators. Having the capability to provide exact measurements and details from photos taken by drones allows insurers to expedite the claim processing time,” he added.

Indeed, as tech becomes more disruptive, insurers will increasingly seek to take advantage of VIS technologies to help them provide faster, more accurate and more efficient insurance solutions.

Duncan Ellis, U.S. property practice leader, Marsh

One way Farmers is differentiating its drone program is by employing its own FAA-licensed drone operators, who are also Farmers-trained claim representatives.

Keith Daly, E.V.P. and chief claims officer for Farmers Insurance, said when launching the program that this sets Farmers apart from most carriers, who typically engage third-party drone pilots to conduct evaluations.

“In the end, it’s all about the experience for the policyholder who has their claim adjudicated in the most expeditious manner possible,” said Mathew.

“The technology should simply work and just melt away into the background. That’s why we don’t just focus on building an industrial-grade drone, but a complete aerial intelligence platform for — in this case — claims management.”

Insurance Applications

Duncan Ellis, U.S. property practice leader at Marsh, believes that, while currently employed primarily to assess catastrophic damage, VIS will increasingly be employed to inspect standard property damage claims.

However, he admitted that at this stage they are better at identifying binary factors such as the area affected by a peril rather than complex assessments, since VIS cannot look inside structures nor assess their structural integrity.

“If a chemical plant suffers an explosion, it might be difficult to say whether the plant is fully or partially out of operation, for example, which would affect a business interruption claim dramatically.

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“But for simpler assessments, such as identifying how many houses or industrial units have been destroyed by a tornado, or how many rental cars in a lot have suffered hail damage from a storm, a VIS drone could do this easily, and the insurer can calculate its estimated losses from there,” he said.

In addition,VIS possess powerful applications for pre-loss risk assessment and underwriting. The high-end drones used by insurers can capture not just visual images, but mapping heat, moisture or 3D topography, among other variables.

This has clear applications in the assessment and completion of claims, but also in potentially mitigating risk before an event happens, and pricing insurance accordingly.

“VIS and drones will play an increasing underwriting support role as they can help underwriters get a better idea of the risk — a picture tells a thousand words and is so much better than a report,” said Ellis.

VIS images allow underwriters to see risks in real time, and to visually spot risk factors that could get overlooked using traditional checks or even mature visual technologies like satellites. For example, VIS could map thermal hotspots that could signal danger or poor maintenance at a chemical plant.

Chris Luck, national practice leader of Advocacy, JLT Specialty USA

“Risk and underwriting are very natural adjacencies, especially when high risk/high value policies are being underwritten,” said Mathew.

“We are in a transformational moment in insurance where claims processing, risk management and underwriting can be reimagined with entirely new sources of data. The drone just happens to be one of most compelling of those sources.”

Ellis added that drones also could be employed to monitor supplies in the marine, agriculture or oil sectors, for example, to ensure shipments, inventories and supply chains are running uninterrupted.

“However, we’re still mainly seeing insurers using VIS drones for loss assessment and estimates, and it’s not even clear how extensively they are using drones for that purpose at this point,” he noted.

“Insurers are experimenting with this technology, but given that some of the laws around drone use are still developing and restrictions are often placed on using drones [after] a CAT event, the extent to which VIS is being used is not made overly public.”

Drone inspections could raise liability risks of their own, particularly if undertaken in busy spaces in which they could cause human injury.

Privacy issues also are a potential stumbling block, so insurers are dipping their toes into the water carefully.

Risk Improvement

There is no doubt, however, that VIS use will increase among insurers.

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“Although our clients do not have tremendous experience utilizing drones, this technology is beneficial in many ways, from providing security monitoring of their perimeter to loss control inspections of areas that would otherwise require more costly inspections using heavy equipment or climbers,” said Luck.

In other words, drones could help insurance buyers spot weaknesses, mitigate risk and ultimately win more favorable coverage from their insurers.

“Some risks will see pricing and coverage improvements because the information and data provided by drones will put underwriters at ease and reduce uncertainty,” said Ellis.

The flip-side, he noted, is that there will be fewer places to hide for companies with poor risk management that may have been benefiting from underwriters not being able to access the full picture.

Either way, drones will increasingly help insurers differentiate good risks from bad. In time, they may also help insurance buyers differentiate between carriers, too. &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected]