Evolution in risk management: the role of the troubleshooters

The role of the insurer has undergone a transformation in the past years from a largely office-based industry to a more outward-looking, proactive one that aims to make life easier for risk managers.

In the forefront of this development is a small army of specifically trained experts who immerse themselves into wide variety of industries, from petrochemicals and power to steel and semi-conductors. At the behest of clients, these troubleshooters visit factories, warehouses, retailers, research institutes and other businesses to determine where risk exists and, crucially, how it can be reduced or eliminated.

Much of this on-the-ground research is in the insurers’ interests. The more the troubleshooters understand about a client’s exposures and its business’s conscientiousness in managing them, the less likely a claim will be made. Thus, it is common for AIG to work with a client for several months before providing insurance coverage.

Simple measures

Over the years, risk engineers inevitably accumulate a wealth of practical knowledge that has trickled down through specific sectors and industries. Between them, AIG’s engineers conduct 15,000 or more surveys per year. Their view is that every client is unique and should be treated as such.

“Understanding the client’s exposure is critical,” explains Barry Paull, head of EMEA account engineering, global property.

However, some commonalities exist between all businesses and the troubleshooters routinely benchmark companies against their peers. Thus, if they lag in certain areas, they can see where they can make amends.

Much in the vanguard of the practicalities of risk management, these people sit on technical committees and belong to organisations that draw up safety and other codes that are crucial to the successful operation of industry. They are often star turns at seminars and conferences. Ultimately, however, the main lessons about business continuity are learnt on the factory floor.

One of those lessons is that many – and perhaps most – incidents that can close a company even temporarily are preventable through a few relatively simple measures.