Jerry Kysela has approximately 25 years of experience as a risk management department director and relationship manager. He currently serves as resident managing director of Aon’s North-Central Ohio region, which includes offices in Cleveland, Akron, Youngstown and Columbus. Kysela oversees the region’s client services, business development and overall operations.
Q. How can a company analyze the risk it faces?
It is even more critical given today’s economy that senior officers and directors fully understand and perform due diligence around a company’s risk, including operational, financial and other business risks — not simply insurable risks. This would include a process that chronicles the major risks and exposures, risk mapping and weighting, including assigning of probabilities, quantifying and strategies to mitigate each. The issue of reputational risk is critically important in today’s environment and should be included in an enterprisewide approach.
Q. How can a company create a risk management plan?
Creating a risk management department and defining what risk management means to the organization, including perhaps what it does not include, would be a good starting point. Writing a risk management plan document to provide some fundamental parameters on how the department will operate, including tasks and responsibilities, would be important to the process.
Q. What are some ways to save money on risk management?
There are generally many opportunities to reduce cost within a company’s risk management program. The starting point is insurance brokerage representation. Hire a broker who has both significant leverage and relationships with the key insurance markets. Given their premium volume with the various insurance carriers, they will drive the best results. This is a fundamental leverage approach. The one who buys the most buys at the lowest price and is able to negotiate the best terms and, importantly, will be able to negotiate the best outcome on claims. One insurance agent or broker is not like the rest. It is not a commodity, and clients can receive much greater value by partnering with a broker who not only has premium leverage but also has specialized expertise by insurance products and by industry practices groups. This will insure that your broker understands the issues in your business.
