Industry Pulse

Risky Business

Travelers examined how executives perceive risk. Many think the world is getting less risky.
By: | December 14, 2017 • 4 min read

In the last year alone, violence broke out in hundreds of cities across the world, from Las Vegas to Myanmar, Sutherland Springs to Mogadishu. Hurricanes and wildfires tore through neighborhoods in August, September and October, leaving residential and corporate destruction in their wake.

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Yet survey results show that many American business owners and executives don’t believe that the world is getting more risky.

“We saw that both consumers and businesses are feeling more optimistic about their risk outlook,” said Pat Gee, a senior vice president with Travelers.

“This may mean that there is decreasing concern about economic uncertainty due to a gradually-improving economy over the past several years.”

Every year, Travelers surveys business owners and executives on their overall perception of risk in the world. This year, 37 percent of respondents said the world is getting riskier, down from last year’s 41 percent.

In 2014, when Travelers first began the annual survey, 48 percent believed the world was getting riskier.

But while perceptions of an increasingly risky world declined each year, business owners and execs still have concerns for the future.

Pat Gee, senior vice president, Travelers

Medical cost inflation tops that list, with 61 percent of respondents answering they worry some or a great deal that it affects their business.

This, said Gee, isn’t a surprising result; it is consistent with what business owners and executives have said since Travelers first conducted the survey.

Cyber threats followed next at 56 percent, then legal liability, retaining a talented workforce and complying with government laws.

When it comes to talent, business leaders in midsized and larger companies are most concerned with finding qualified workers and keeping them in a competitive labor market. The risk of having an aging workforce coupled with an influx of new and younger workers led many to cite this as the riskiest emerging trend, more likely to be a future business risk than an opportunity.

Thirty-eight percent of respondents said that the changing future workforce posed a great risk to their business in the next five years.

Others named emerging trends including e-business, social media and increased connectivity. Business owners believe increased use of digital platforms and the ability to connect with anyone at any time will contribute the most opportunity in the next five years.

But increased use of digital platforms opens businesses to cyber threats, too.

“Cyber risks continue to be a worry for businesses overall. Yet according to our Risk Index, only 22 percent of businesses have a cyber-breach response plan,” said Gee.

“Cyber criminals are getting smarter and more creative about how to steal information from companies,” he added.

“Business leaders need to consider not only what they can do to avoid these incidents, but also the available safety nets for the company should a cyber event occur.”

Thirty-eight percent of respondents said that the changing future workforce posed a great risk to their business in the next five years.

The best practice, Gee added, would be to require regular password updates for employees. These passwords should be complex in nature.

“Employees with unsophisticated passwords leave their computers and accounts — and therefore, the company — vulnerable to attack.”

Other risks measured by Travelers include distracted driving, workplace harassment, emerging technologies, extreme weather and employee safety. The study also broke down business owners’ and executives’ perceived risks by industry, from health care to banking, real estate to manufacturing.

Cyber remained a reoccurring top risk in all industries.

Consumer Concerns

In addition to surveying executives, Travelers asked consumers about their perception of world risks.

Much like businesses, some consumers feel that the world is getting less risky. Fifty-two percent of consumer respondents said the world is getting riskier, compared to last year’s 56 percent.

But consumers, too, had their own list of concerns.

Finances ranked highest. Sixty-four percent of respondents said not having enough money to pay expenses, live without debt or be able to retire was their biggest concern.

Cyber threats, identity theft, personal safety concerns and travel risks also were among the top five named by consumers.

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Of note, the survey found a disparity in how millennials and non-millennials view the practice of distracted driving.

Forty percent of millennials worry about getting into an automobile accident due to their own cell phone distractions, while 27 percent of non-millennials worry about their own cell phone use while driving.

“No matter the perception, the epidemic of distracted driving affects us all,” said Gee.

“We’re encouraging all businesses to consider implementing a distracted driving policy, but especially businesses with employees that drive as part of their job duties.”

Travelers launched an educational initiative called “Every Second Matters” to combat distracted driving.

“To be effective, business leaders should make it clear to employees that safety comes first, and they should not make or answer any work-related communications while driving,”    added Gee.

The survey report, “2017 Travelers Risk Index,” is available to view online. The full report dives deeper into the concerns raised by both consumers and business executives.  &

Autumn Heisler is a staff writer at Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

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R&I Profile

Achieving Balance

XL Catlin’s Denise Balan stays calm and focused when faced with crisis.
By: | January 10, 2018 • 6 min read

In the high-stress scenario of kidnap or ransom, the first image that comes to mind isn’t necessarily a yoga mat — at least, not for most.

But Denise Balan, senior VP and head of U.S. kidnap & ransom, XL Catlin, who practices yoga every day, would swear by it.

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“I looked at these opposing aspects of my life,” she said. “Yoga is about focus, balance, clarity of intent. In a moment of stress, how do you respond? The more clarity and calmness you maintain, the better positioned you are to provide assistance in moments of crisis.

“Nobody wants to be speaking to a frenetic person when either dealing with a dangerous situation or planning for prevention of a situation,” she added.

“There’s a poem by [Rudyard] Kipling on that,” added Balan’s colleague Ben Tucker. “What it boils down to is: If you can remain calm, you can manage through a crisis a lot better.”

Tucker, who works side by side with Balan as head of U.S. terrorism and political violence, XL Catlin, has seen how yoga influences his colleague.

“The way Denise interacts with stakeholders in this process — she is very professional and calm in the approach she takes.”

Yin and Yang

Sometimes seemingly opposite or contrary forces may actually be complementary and interconnected. In Balan’s life, yoga and K&R have become her yin and yang.

She entered the insurance world after earning a juris doctor degree and practicing law for a few years. The switch came, she said, when Balan realized she wasn’t enjoying her time as a commercial litigator.

Denise Balan, senior VP and head of U.S. kidnap & ransom, XL Catlin

In her new role, she was able to use her legal background to manage litigation at AIG, where her transition from law to insurance took place. She started her insurance career in the environmental sector.

In a chance meeting in 2007, Balan met with crisis management underwriters who told her about kidnap and ransom products.

She was hooked.

Because of her background in yoga, Balan liked the crisis management side of the job. Being able to bring the calmness and clearness of intent she practiced during yoga into assisting clients in planning for crisis management piqued her interest.

She then joined XL Catlin in July 2013, where she built the K&R team.

As she became more immersed in her field, Balan began to notice something: The principles she learned in yoga were the same principles ex-military and ex-law enforcement practiced when called to a K&R-related crisis.

She said, “They have a warrior mentality — focus, purpose, strength and logic — and I would say yoga is quite similar in discipline.”

“K&R responders have a warrior mentality — focus, purpose, strength and logic — and I would say yoga is quite similar in discipline.” — Denise Balan, senior VP and head of U.S. kidnap & ransom, XL Catlin

Many understand yoga to be, in itself, one type of meditation, but yoga actually encompasses a group of physical, mental and spiritual practices. Each is a discipline. Some forms of yoga focus on movement and breathing, others focus on posture and technique. Some yoga is meant to relax the mind and create a sense of calmness; other yoga types make participants sweat.

After having her second child and working full-time, Balan wanted to find something physical and relaxing for herself; a friend suggested yoga. During her first lesson, Balan said she was enamored with it.

“I felt like I’d done it all my life.”

She dove into the philosophy of yoga, adopting the practice into her daily routine. Every morning, whether Balan is in her Long Island home or on a business trip, she pulls out her yoga mat to practice.

“I always travel with my mat,” she said. “Daily practice is the simplest form of connection to routine to maintain my balance — physically and mentally.”

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She said the strangest place she has ever practiced was in Lisbon. She was on a very narrow balcony with a bird feeder swarming with sparrows overhead.

After years of studying and practicing, Balan is considered a yogi — someone who is highly proficient in yoga. She attends annual retreats with her yoga group, where she is able to rejuvenate, ready to tackle any K&R event when she returns.

In 2016, Balan visited Tuscany, Italy, where she learned the practice of yoga nidra, a very deep form of meditation. It’s described as the “going-to-sleep stage” — a type of yoga that brings participants to a state of consciousness between waking and sleeping.

“It awakens a different part of your brain,” Balan commented. “Orally describing it doesn’t quite do it justice. One has to practice Nidra to fully understand the effect it has on your being.”

Keeping a level head during a crisis is key in their line of business, Tucker said. He can attest to the benefit of having a yogi on board.

“I’ve seen her run table-top exercises where there is this group of people in a room and they run an exercise, a simulation of a kidnap incident. Denise is very committed to what we’re doing,” said Tucker.

“She brings that energy. She doesn’t get flustered by much.”

Building a K&R Program

When Balan joined XL Catlin, she was tasked with creating the K&R team.

Balan during a retreat in Sicily, Italy, 2017

She spent time researching and analyzing what clients would want in their K&R coverage. What stuck out most to Balan was the fact that, in these situations, the decision to purchase kidnap and ransom cover is rarely made because of desire for reimbursement of money.

“I asked why people buy this type of coverage. The answer was for the security responders,” she said.

“These are the people who sit with the family. They’re similar to psychologists or priests,” Balan further explained. “Corporations can afford to pay ransom. They buy [K&R] because it gives them access to these trained and dedicated professionals who not only provide negotiation advice, but actually sit with a victim’s family, engaging deep levels of emotional investment.”

“I’ve learned to appreciate all moments in life — one at a time. The ability to think clearly and calmly guides my work, my practice and my personal life.” — Denise Balan, senior VP and head of U.S. kidnap & ransom, XL Catlin

Balan described these responders as people having total clarity of purpose, setting their intentions to resolve a crisis — a practice at the very heart of yoga. She knew XL Catlin’s new kidnap program would put stock in their responders.

“I’ve worked closely with the responders to better understand what they can do for our clientele. These are the people who run into danger — warrior hearts married to dedication to our clients’ best interests.”

But K&R is more than fast-paced crisis and quick thinking; Balan also spent a good deal of time writing the K&R form and getting the company’s resources in order. This was a huge task to tackle when creating the program from the ground up.

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“A lot of my day-to-day is speaking with brokers and finding ways to enhance our product,” she said.

After a few months, she was able to hire the company’s first K&R underwriter. From there, the program has grown. It’s left her feeling professionally rewarded.

“People don’t often get that opportunity to build something up from scratch,” she said. “It’s been an amazing experience — rewarding and fun.”

“She brings groups of people together,” said Tucker. “She’s created a positive environment.”

Balan’s yogi nature extends beyond the office walls, too. Her pride and joy, she said, are her kids. And while it may seem like two large parts of her life are opposite in nature, Balan’s achieved balance through her passions.

“[Yoga] has given me the ability to see beyond only one aspect of any situation” she said. “I’ve learned to appreciate all moments in life — one at a time. The ability to think clearly and calmly guides my work, my practice and my personal life.” &

Autumn Heisler is a staff writer at Risk & Insurance. She can be reached at [email protected]