A partnership approach

Risk Management and Risk Financing are support functions. But it’s not only to reduce risks it is much more to help to create opportunities. Providing the right information at the right time, means also to foresee what might come next and create scenarios. At university I came across the ‘Shell scenario technique’. I remember how fascinated I was about their success. But best theories come only to life if different functions work together in true partnership.

When starting at CEVA our management outlined the company strategy and main challenges. As a private equity owned company, a sale or an IPO was an option. Reducing number of claims & accidents and set up Sustainability/ESG. Focus the insurance structure on risk reduction and match requirements for a listed company.

We started with a brief inventory:

1. Identified challenges and risks

2. Organizational structure and resources

3. Focus on measures with mid to long term highest impact

We had great experts in the organization but all with very limited resources. What are each individual strengths and how can we help each other to reduce the workload? At the same time how can we achieve successfully the ambitious given goals? Under the umbrella of ‘Group Risk Management’ we combined: risk identification (including ERM), various risk reduction/mitigation areas (HSE, security, BCP, sustainability and later also quality assurance) and risk financing (insurance) as well the claims team.

Such a broad structure is not common, but it was a powerful solution taken the company’s challenges and structure in consideration. My big thank you to the management for the trust in this.

The result was a more coordinated approach which served both internal and external stakeholders “as one stop shop” and helped to drive down the cost of risk. It reduced complexity and improved transparency.

The connection and analysis of data helped to focus, anticipate and monitor. Information came from internal claims department, different risk and audit processes (i.e., from quality, HSE or security) and external sources.

We extended ‘partnership’ to external sources. Insurers have an interest that companies control their risks and claims. Insurers, brokers and claim handlers own a vast of data and prevention material. Together with those partners we created a comprehensive and tailormade risk financing and prevention program. Thanks, the combined ‘brain’ we introduced many innovative solutions.

Focus on risk reduction, prevention, protection and mitigation activities are powerful instruments to eliminate as many risks as possible which could harm people, affect assets, balance sheet and P&L. Therefore, we tried to set up with partners projects. To name only a few: A ‘global underwriting program’ benefit insurers, HR/C&B and HSE prevention; ‘Cyber Loss scenario and non-damage BI’ with IT Security, Cyber insurers and brokers; ‘MHE/Forklift pedestrian safety’ with Workers Compensation insurers, HSE prevention and operations; ‘Drive camera system & analytics’ with auto liability insurer and fleet management.

Daniel Halter. My own experience. All information is already public. This article has been published on June 14, 2022, on LinkedIn.