New Risks Take Off, PRIMA Winner Says
When Mary Stewart first began her career as a risk manager, attendees at a Public Risk Management Association Conference could fill one room. "We would get together and learn from each other, because there wasnt a text book," she said.
Information for risk managers was hard to come by, she said. The Associate in Risk Management designation was in its infancy and there were only a handful of universities around the country that offered risk management courses, Ms. Stewart recalled.
The result was that risk managers had to rely on one another for information, she said. "We passed products back and forth. It was like, Do you use something for drivers' training? Would you give it to me?"
Things are different now. PRIMA has grown into a 2,200-member organization whose members exchange information internationally by e-mail.
In 12 years Ms. Stewart has built a high-profile career as risk manager for the Metropolitan Washington Airports Authority, which includes Washington Dulles International and Ronald Reagan Washington National Airports.
She has also been named recipient of PRIMAs 2001 Public Risk Manager of the Year Award, chosen by a panel of risk managers and other insurance industry experts.
"This is the first time somebody from a public-entity authority has received the award," said Dan Pliszka, PRIMA's president. "If there was any one reason, it was for some of her innovative uses of owner-controlled insurance programs."
"Another thing that stands out is an international travel accident program for her board members who travel abroad," he added. "The amount of money she has saved her entity in implementing the OCIPs has been phenomenal. She has implemented some multi-million dollar programs that have also saved multi-millions of dollars in the renovation of Washington Reagan airport and now Dulles."
Previously Ms. Stewart worked as risk manager for the nearby city of Alexandria, Va., then left to work for the county in Richmond, Va.
"I was dying to come back to Washington," she said. "And along comes this opportunity, where theairports were splitting from the federal government. It was wonderful."
Being in the Washington, D.C. area gave her the opportunity to start a wrap-up program from scratch, which "I had been trying to start at the county," she said. "But we just didnt have the level of construction that was going to happen here. So this was a dream program."
When she first started her job at the Authority, "it was just me," she said. "I didnt even have a secretary." Now she has a "lean and mean" staff of five on the operational, or non-construction side. Two are involved in safety, one is a claims manager, one is a technician, and one employee works with certificates and claims payments, she said.
On the construction side are a full-time safety manager and a project insurance administrator, Ms. Stewart said.
The recently completed $1.89 billion renovation at Reagan National was a "cakewalk" compared to her current project, a program called "Dulles II," she said.
Slated over the next seven years, Dulles II is a $3.8 billion project that will transform Washington Dulles International from a 60,000 passenger facility to an anticipated 150,000 passenger-per-day operation, she said.
"In order to accommodate that weve got to improve everything," she said, including infrastructures. Even utility buildings have to be upgraded to accommodate the expansion, she said.
The project includes building a new concourse, and then tearing down the old one. Eventually two more concourses will be built, she said. Also being added are another runway, two new parking garages with pedestrian tunnels leading to the terminal, new roads, and surface work.
"You name it. Its huge," she said.
The good news is that "were unique, we have plenty of land," Ms. Stewart said–just over 11,000 acres.
"Dulles probably has the best ability on the entire East Coast to accommodate expansion," Ms. Stewart said. Another aspect of the project is an underground "people-mover" train system–requiring about eight miles of tunneling beneath active taxiways and runways, she said.
The expansion will make Dulles one of the largest employers for contractors in the Northern Virginia, Washington, D.C.-Metropolitan area, she said.
The Authority employs about 1,500 full-time workers, including police, fire, airport operations, ground maintenance and a variety of other services such as concession, procurement and contracting, she said.
"We contract out so much, and so do the airlines and various tenants, that at Dulles were now figuring that there are about 20,000 people working at the airport," she said.
On the operational side "we are insurance-heavy," Ms. Stewart said. "We buy insurance for just about everything. We go from buying the things you would think of, like airport liability and workers comp, to all-weather insurance, so that we make sure our snow removal is covered in case we go through a very heavy season of snow. There are about 14 different policies."
Coverage on the construction side includes a brand new program, which replaces a 12-year wrap-up program. "The Authority will be self-insured for the first $1 million on the liability side, and buying higher limits both domestically and through London," she said. Excess liability is insured through a company out of Bermuda.
Starting up a captive insurance company was briefly considered but the Authoritys board of directors decided against the idea.
"We are very much like the Smithsonian," she said. "Of our 13-member board, four are appointed by the governor of Virginia, three by the governor of Maryland, three by the mayor of the District of Columbia, and three by the President of the United States," she said. "So when you get that mix of political interests and you say you want to start a captive, they say in what state would you do it? It creates all kinds of problems."
How does she prepare for the ever-widening multitude of risks? "Thats another interesting twist," she said. "The risks are changing just as fast as our community is changing."
A RIMS conference workshop on the topic of "brand risk" recently caught her eye, she said. Even though the Authority is not a "brand" such as Pepsi or Levi, Ms. Stewart said she began to understand how her organization could be affected.
Until recently "we didnt have e-mail risk or Internet risk," she said. "Now we have to be concerned about Web sites, and from that standpoint, what we post on the Web site."
Recently [a popular cable channel] called. "They said you know, you are showing old videos on your television sets at the airport. I said, I am? Is that bad? Im wondering if its my risk and if I should be scrutinizing what this other channel puts out there."
The risk isnt "just about a worker getting hurt or a patron coming into my facility, and making them whole again, there are so many facets now," she said.
One thing the Authority has done to prepare is business continuity planning. Previously "we would buy insurance and figure out what we would have to do contractually for a natural disaster," she said. "Now we take our newly started business continuity planning and build on it. We make it generate information and potential problems to all facets within the airport."
One of the biggest helps was preparing for Y2K, she said. "I think everybody spent a great deal of time and energy figuring out how a computer would crash and how it would affect our systems–basic risk management stuff, I was eating this up."
Fortunately, she said, Y2K was uneventful, "but what generated from that was a total awareness that I could have never had if it hadnt been for Y2K."
Now, she said, managers are beginning to realize that there are other ways they can be impacted.
"Weve been fortunate in this area not to have brownouts and blackouts," she said. "But energy failure is another issue. We rely on so many types of systems–not only us but the airlines, and the tenants and concessions, and that could be a major disaster.
"Overall, the industrys risks are changing very fast, which forces risk managers to seek new information and continually evaluate the way we do business," Ms. Stewart concluded. "I thank organizations like PRIMA for providing the opportunity to network with my peers."
Reproduced from National Underwriter Edition, June 22, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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