Sage Advice For Risk Managers

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By Caroline McDonald

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Lance Ewing, incoming president of the New York-based Risk andInsurance Management Society Inc., has some advice for riskmanagers: “Remember that this too shall pass,” he said.

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Referring to the current hard insurance market, he said thatrisk managers need to get the message to their bosses and the chiefexecutives of their companies that “the marketplace won't continuein this vein forever. There will be some softening in certainlines. But certain lines will remain very hard.”

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Mr. Ewing recommended that risk managers who don't have afinancial degree or a background in finance enroll in a communitycollege for some finance courses. “Because we used to be driven bycustomer service, then by quality of the product. Now we're beingdriven by financesthe effect on the shareholder, the effect on WallStreet, and what the analysts will say,” he said.

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He continued that having an understanding from a financialbackground, or “at least being able to speak the financial lingo ofreturns on investments and looking at equity, credit statistics andcash flow is important.”

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“If you are just still buying insurance things may pass you byrather quickly.”

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Risk managers also need to see their relationships with theirbrokers, underwriters and carriers as a team approach.

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“It can't be an us-versus-them situation,” he said. “It's arelationship. And in a hard insurance market, it's good to havethose relationships. It's much more palatable to take bad medicinefrom a friend than it is to take it and lump it.”


Reproduced from National Underwriter Edition, April 7, 2003.Copyright 2003 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.


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