Filed Under:Risk Management, Loss Control

The Broker’s Role in Helping Integrate Risk Management & Treasury

Brokers fully understand the important supporting role they play in helping risk managers prepare reports and presentations to senior financial management.

George Haitsch, executive vice president and North American practice leader for Willis Risk Solutions, knows it from firsthand experience: He was a risk manager for 10 years before coming to Willis.

As Haitsch sees it, with his decade-long perspective on the corporate side, brokers need to understand what the risk manager is trying to achieve and how best to support that effort—both in terms of short-term and long-term goals.

“Some risk managers like to introduce brokers as thought leaders or subject-matter experts,” he says. “Others want to handle this on their own but may seek input from their broker in preparing for the high-level conversations.”

Haitsch believes his responsibility in this area is threefold: First, understand what the risk is. Second, be able to communicate the solution. And third, identify the value of that solution in a financial capacity.

“Whenever we provide information or input, we speak from a financial perspective, not an insurance perspective, because that is the kind of information that risk managers are required to provide to their senior financial executives,” he states. “We also deliver all information crisply, because CFOs don’t have a lot of time.”

According to Rick Miller, managing director for Aon, one of the most important roles of brokers is to help manage expectations by keeping clients aware of what is going on in the marketplace—to avoid surprises for them and their bosses.

“For example, we do a lot of benchmarking and analytics and provide these to risk managers to help them explain rate changes to financial executives,” he says. “We also provide information on how that particular client compares with its peers—better or worse, and why.”


As Terry Campbell, managing director of the global-risk-management practice for Arthur J. Gallagher, sees it, brokers should try to become even more involved than just providing information. “We are intimately involved in the process,” he says.

While there are instances in which Gallagher will simply provide information to risk managers so they can present it to financial executives, in most cases, Gallagher executives will make presentations together with the risk managers. “We like to be in front of the financial executives with the risk managers, and we have been fortunate that this has become the norm for us,” he states.

In so doing, the company is very cognizant of time constraints. “Over the last two to three years, we have noticed that risk managers and their financial executives don’t have a lot of time,” explains Campbell. “The insurance industry used to be really good at putting together thick books with a lot of information emphasizing how much they have done.” According to Campbell, this no longer works.

 “These days, we get 15 to 30 minutes with the CFO,” he says. “We have to focus on the salient points: Here is what our costs were. Here is what happened. Here is why it happened. Here is what we should expect in the future.”

Certainly, Gallagher has all of the backup data available if needed. “However, this goes into a separate presentation that is available for the risk manager,” he states.

These days, Campbell believes risk managers are challenged with having to present information in graphs and bar charts when the pricing numbers are not going down but are flat or going up.

“As a result, when we work with risk managers, we have always worked to show not only the baseline but also provide information on the fundamentals that drive the price or cost up or down,” he explains. “So when the market does change, risk managers can show that they have done their jobs when prices and costs increase.”

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