Risk Insider: Jon Hall

Risk Management and Millennials

By: | February 27, 2018 • 4 min read
Jonathan W. Hall is chief operating officer at FM Global. He oversees FM Global’s insurance operations and insurance staff functions, as well as the FM Global Resilience Index, a data driven resource that ranks the business resilience of 130 countries and regions. He can be reached at [email protected]

Are you afraid to hire millennials? Do you fear if you do, after all the time and investment your company puts into them, they will just get up and leave your organization in two or three years’ time?

Nothing could be farther from the truth, and that kind of thinking can leave your organization at a competitive disadvantage. As the last of the millennial generation begins to enter the workforce, and the first of that group approach their 40s, it is clearer than ever risk management offers millennials everything they are looking for in a career to make them want to stay for the long-term — growth, challenges and cutting-edge technology.

That’s important because in the United States, 10,000 people will turn 65 every day between now and 2030, according to the U.S. census bureau. While many of those folks will still be working after age 65, it’s no secret that the brain drain on the risk management and insurance industries will be in the hundreds of thousands of people over the next several years.

The Millennial Generation is where we will find the human talent to fill those gaps and position risk management for growth in the future.

In fact, the steps we should be taking to attract millennials are the very same things that set any good business apart from its competition — investing in people, our most valuable asset. It’s been my experience that loyalty is a two-way street; when companies invest in people, people invest in companies.

According to a survey of 1,100 U.S.-based millennials working for FM Global and four other large companies, the most significant factors in employer selection criteria for millennials are career growth, salary, benefits, job security, work-life balance, skill development and interesting work. Importantly, 60 percent of people in the study said they preferred to stay with their current employer, while only 25 percent thought changing employers was the best way to advance their careers. That’s great news!

Today, risk management is not about simply identifying ways to transfer risk; it is about creating a holistic approach to business resilience and maintaining a competitive advantage. But in order to educate millennials about all of the opportunities in risk management, we have to tell our stories.

So what can we do to attract and retain millennials (and others for that matter)?

At FM Global, we heavily invest in enterprise learning programs designed to provide our employees with the skills and knowledge they need now and in the future to continually grow their careers.

For example, we have recently revamped our risk management engineering training program to leverage our newly built 40,000 square foot FM Global Learning Center outside of Boston, Mass. Here students (whether they are employees or risk management clients) receive instruction in specially designed “active learning” classrooms using the latest technology that foster creativity and critical thinking. Each classroom is equipped with surface computing (huge touch screens with built-in intelligence) and interactive whiteboards. There also are smartboards, mounted LCD projectors and video cameras.

In these collaborative classrooms, students work in groups using technology that helps them discover new skills. Facilitators interact with students and encourage critical thinking by discovering new methods and concepts that can be applied to their jobs. This type of learning keeps them excited and engaged.

This program has streamlined our engineering training program from 18 months to just 12 months!

There has been much written that millennials, as a generation, are quick to move from job to job and have no loyalty. The research says differently. In fact, overall, millennials who are happier with their jobs are more likely to be satisfied with their careers and lives and in turn will work harder and stay with their current employer.

The key is they need to be challenged and have the opportunity to do different things. In my own career, I’ve had multiple jobs — starting as an account underwriter, working my way up to senior vice president of underwriting and reinsurance before being named an executive vice president and then chief operating officer.

The great thing is, I have had the opportunity to change jobs all while working for the same company for more than 30 years. When there are opportunities for an employee to grow in their career, and companies are willing to promote from within, your employees will stay with you.

Finally, risk management is an exciting field with multiple opportunities for challenging work and career growth. Today, risk management is not about simply identifying ways to transfer risk; it is about creating a holistic approach to business resilience and maintaining a competitive advantage.

But in order to educate millennials about all of the opportunities in risk management, we have to tell our stories.

At FM Global, we don’t just go to college campuses to recruit student talent — although that is an important part. Telling our stories means senior executives sitting down with employees at all levels — whether Generation X, millennials or the soon-to-enter-the-workforce Generation Z — and engaging in active conversations. It means listening to your people and understanding their wants and needs and actively working to ensure your company reflects the people who work for it.

The secret to success is simple: Invest in your most important asset — your people.

More from Risk & Insurance

More from Risk & Insurance

Risk Report: Marine

Crewless Ships Raise Questions

Is a remote operator legally a master? New technology confounds old terms.
By: | March 5, 2018 • 6 min read

For many developers, the accelerating development of remote-controlled and autonomous ships represents what could be the dawn of a new era. For underwriters and brokers, however, such vessels could represent the end of thousands of years of maritime law and risk management.

Rod Johnson, director of marine risk management, RSA Global Risk

While crewless vessels have yet to breach commercial service, there are active testing programs. Most brokers and underwriters expect small-scale commercial operations to be feasible in a few years, but that outlook only considers technical feasibility. How such operations will be insured remains unclear.

“I have been giving this a great deal of thought, this sits on my desk every day,” said Rod Johnson, director of marine risk management, RSA Global Risk, a major UK underwriter. Johnson sits on the loss-prevention committee of the International Union of Maritime Insurers.

“The agreed uncertainty that underpins marine insurance is falling away, but we are pretending that it isn’t. The contractual framework is being made less relevant all the time.”

Defining Autonomous Vessels

Two types of crewless vessels are being contemplated. First up is a drone with no one on board but actively controlled by a human at a remote command post on land or even on another vessel.

While some debate whether the controllers of drone aircrafts are pilots or operators, the very real question yet to be addressed is if a vessel controller is legally a “master” under maritime law.


The other type of crewless vessel would be completely autonomous, with the onboard systems making decisions about navigation, weather and operations.

Advocates tout the benefits of larger cargo capacity without crew spaces, including radically different hull designs without decks people can walk on. Doubters note a crew can fix things at sea while a ship cannot.

Rolls-Royce is one of the major proponents and designers. The company tested a remote-controlled tug in Copenhagen in June 2017.

“We think the initial early adopters will be vessels operating on fixed routes within coastal waters under the jurisdiction of flag states,” the company said.

“We expect to see the first autonomous vessel in commercial operation by the end of the decade. Further out, around 2025, we expect autonomous vessels to operate further from shore — perhaps coastal cargo ships. For ocean-going vessels to be autonomous, it will require a change in international regulations, so this will take longer.”

Once autonomous ships are a reality, “the entire current legal framework for maritime law and insurance is done,” said Johnson. “The master has not been replaced; he is just gone. Commodity ships (bulk carriers) would be most amenable to that technology. I’m not overly bothered by fully automated ships, but I am extremely bothered by heavily automated ones.”

He cited two risks specifically: hacking and fire.

“We expect to see the first autonomous vessel in commercial operation by the end of the decade. Further out, around 2025, we expect autonomous vessels to operate further from shore — perhaps coastal cargo ships. For ocean-going vessels to be autonomous, it will require a change in international regulations, so this will take longer.” — Rolls-Royce Holdings study

Andrew Kinsey, senior marine risk consultant, Allianz Global Corporate & Specialty, asked an even more existential question: “From an insurance standpoint, are we even still talking about a vessel as it is under law? Starting with the legal framework, the duty of a flag state is ‘manning of ships.’ What about the duty to render assistance? There cannot be insurance coverage of an illegal contract.”

Several sources noted that the technological development of crewless ships, while impressive, seems to be a solution in search of a problem. There is no known need in the market; no shippers, operators, owners or mariners advocate that crewless ships will solve their problems.

Kinsey takes umbrage at the suggestion that promotional material on crewless vessels cherry picks his company’s data, which found 75 percent to 90 percent of marine losses are caused by human error.


“Removing the humans from the vessels does not eliminate the human error. It just moves the human error from the helm to the coder. The reports on development by the companies with a vested interest [in crewless vessels] tend to read a lot like advertisements. The pressure for this is not coming from the end users.”

To be sure, Kinsey is a proponent of automation and technology when applied prudently, believing automation can make strides in areas of the supply chains. Much of the talk about automation is trying to bury the serious shortage of qualified crews. It also overshadows the very real potential for blockchain technology to overhaul the backend of marine insurance.

As a marine surveyor, Kinsey said he can go down to the wharf, inspect cranes, vessels and securements, and supervise loading and unloading — but he can’t inspect computer code or cyber security.

New Times, New Risks

In all fairness, insurance language has changed since the 17th century, especially as technology races ahead in the 21st.

“If you read any hull form, it’s practically Shakespearean,” said Stephen J. Harris, senior vice president of marine protection UK, Marsh. “The language is no longer fit for purpose. Our concern specifically to this topic is that the antiquated language talks about crew being on board. If they are not on board, do they still legally count as crew?”

Harris further questioned, “Under hull insurance, and provided that the ship owner has acted diligently, cover is extended to negligence of the master or crew. Does that still apply if the captain is not on board but sitting at a desk in an office?”

Andrew Kinsey, senior marine risk consultant, Allianz Global Corporate & Specialty

Several sources noted that a few international organizations, notably the Comite Maritime International and the International Maritime Organization, “have been very active in asking the legal profession around the world about their thoughts. The interpretations vary greatly. The legal complications of crewless vessels are actually more complicated than the technology.”

For example, if the operational, insurance and regulatory entities in two countries agree on the voyage of a crewless vessel across the ocean, a mishap or storm could drive the vessel into port or on shore of a third country that does not recognize those agreements.

“What worries insurers is legal uncertainty,” said Harris.

“If an operator did everything fine but a system went down, then most likely the designer would be responsible. But even if a designer explicitly accepted responsibility, what matters would be the flag state’s law in international waters and the local state’s law in territorial waters.


“We see the way ahead for this technology as local and short-sea operations. The law has to catch up with the technology, and it is showing no signs of doing so.”

Thomas M. Boudreau, head of specialty insurance, The Hartford, suggested that remote ferry operations could be the most appropriate use: “They travel fixed routes, all within one country’s waters.”

There could also be environmental and operational benefits from using battery power rather than conventional fuels.

“In terms of underwriting, the burden would shift to the manufacturer and designer of the operating systems,” Boudreau added.

It may just be, he suggested, that crewless ships are merely replacing old risks with new ones. Crews can deal with small repairs, fires or leaks at sea, but small conditions such as those can go unchecked and endanger the whole ship and cargo.

“The cyber risk is also concerning. The vessel may be safe from physical piracy, but what about hacking?” &

Gregory DL Morris is an independent business journalist based in New York with 25 years’ experience in industry, energy, finance and transportation. He can be reached at [email protected]