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30th annual RIMS conference.

THE RIMS CONFERENCE IN ANAHEIM, MARCH 29 TO April 3, was more than just an anniversary celebration of three decades of the Society's commitment to the risk management function. It stood as a clarion call for risk managers everywhere to take firmer control of their profession in the face of inexorable changes that lie ahead.

As risk managers enter the last decade before the new millennium, their companies face a glacially paced recovery from severe economic recession and increased global competition with the promise of larger and more complicated risk exposures yet to come. On the home front, the situation is little better as some CEOs, in a rush to downsize staffs, delegate the risk management function of their companies to brokers as a value-added service. In addition, the financial underpinnings of the insurance industry itself, and the regulatory structure that governs it, are being questioned. In a policy statement issued at the conference, it was announced that the Society believes now is the time for federal solvency regulation of insurers writing large commercial policies. "The message is clear. It's not business as usual, nor will it be," warned Bob Esenberg, outgoing RIMS president and risk manager for the City of Virginia Beach, Virginia, in farewell remarks delivered at the annual membership meeting. "Our budgets are under intense scrutiny. Jobs are being combined and eliminated. In some cases, entire risk management departments are being wiped out."

According to Gene Ricci, RIMS executive director, 1992 was a year of introspection in which the Society was by no means immune to the recession. "Learning how to do more with less is not a momentary phenomenon," he said, "it is a fact of life."

However, Mr. Esenberg noted that change bespeaks opportunity, and to that end he exhorted risk managers to "reach corporate decision makers with the message of the importance of risk management, not just as a professional discipline, but also in terms of its impact on the corporate profit and loss statement." Getting that message across will be a critical factor in the longterm success and even the survival of risk management and RIMS itself in the years to come.

In the view of Suzanne Crager, RIMS president and assistant vice president for risk management and insurance for PNC Financial Corp., in Pittsburgh, risk managers must empower themselves to face challenges such as global competition head-on. In an effort to assist members, Ms. Crager said RIMS will establish exchange programs this year that will allow risk managers from the United States and Canada to spend time with their professional counterparts in other countries. For the first time, as part of its focus on the global arena, RIMS has appointed J.A. Yvon Menard of Marathon Realty Co. Ltd., in Toronto as vice president, International. "We've got a lot of work to do and precious little time in which to do it," Ms. Crager said.

In an effort to be on the cutting edge of educational excellence in risk management, Ms. Crager said she would like to see a course developed to help risk managers understand the idiosyncrasies of insurance accounting. "We must also begin to educate young people on the attractiveness of our field as a career path," she said. "I would like to see our 'Careers in Risk Management' brochure in every high school guidance office in the country. If we do our jobs correctly, there will be much more-not less-demand for professional risk managers."

In the months ahead, Ms. Crager also plans to increase RIMS' impact in the legislative and regulatory arena. "This is our most visible activity and it relates directly to the interests of our member companies," she said.

On-Site Record Set

MORE SO THAN in past years, RIMS' lineup of educational seminars and industry group sessions was particularly well attended. Indeed, overall paid attendance at the RIMS conference totaled 3,836 with a record set for on-site registrants at 504. A new record was also set in the exhibit hall with an all-time high of over 550 total booths sold and nearly 310 exhibiting companies represented overall.

Heading the list of guest speakers at the conference was Elizabeth Dole, president of the American Red Cross and former secretary' of labor for George Bush from 1988 to 1990. Ms. Dole told attendees that America is facing a work force crisis. "In 1975, there were only 50,000 computers in the world-currently 50,000 are sold each day," she said. Adding that while one-third of all future jobs will require education beyond the high-school level, it is estimated that one out of five workers, at present, is functionally illiterate. Ms. Dole said that educating this work force depends on a synergy of forces between parents, teachers, employers and government.

Expanding upon the theme of worker productivity and competitiveness, noted management consultant Peter Drucker said during a special session that the "biggest economic challenge we face today is raising the productivity level of knowledge and service workers." Mr. Drucker said that productivity is on the rise in many areas, including the farming and trucking industries. But too many service workers are serving the computer instead of customers, and too many knowledge workers are pushing paper when they should be using their skills."

With a nod to risk managers in the audience, Mr. Drucker advised centralizing all risks into a holistic entity. "Expertise is not found in managing individual exposures," he said, "but in managing the idea of risk as a whole."

Following Mr. Drucker's remarks, a CEO roundtable discussion ensued. Several leading insurance company executives participated including: Gary Countryman, CEO of Liberty Mutual Insurance Group; Caleb Fowler, president of CIGNA Property & Casualty Cos.; Thomas Tizzio, president of American International Group (AIG); and Douglas Letherdale, chairman of The St. Paul Cos.

Moderated by Gerald Belfiglio, RIMS vice president of government and public affairs, the panel tackled such issues as whether Lloyd's will overcome its recent difficulties, if a hard market will soon return and the state of tort reform in the United States. When asked about AIG's environmental cleanup proposal, Mr. Fowler replied, "I think it should be commended. The effectiveness of Superfund is a myth and we have just scratched the surface in dealing with contaminated sites." However, Mr. Letherdale disagreed with the proposal, saying that he would find it difficult to ask clients to contribute the 2 percent of premium put forth in the proposal. "In essence, we would be tax collectors," he said. "Furthermore, 1 believe environmental cleanup is a societal issue."

Batting cleanup as the final guest speaker at the RIMS conference was heavy hitter and former New York Yankee Reggie Jackson. "I'm a fabulous insurance plan and pay a huge premium," Mr. Jackson told attendees. "In fact, if the expense is not over $2,000, I don't bother putting a claim in on it."

Mr. Jackson told attendees that he is no stranger to tragedy, having lost his home to fire on three separate occasions. "No one plans to face a catastrophe," he said. "We think we'll get everything out before the house burns down." Despite losing baseball memorabilia collected from three teams over the course of his career as well as $1.5 million in vintage automobiles, Mr. Jackson considers himself lucky. "I had to deal with things that were lost," he said. "The 26 people who died in my neighborhood during the fire-they were the real tragedy. I might not have my World Series rings, but I still have memories I can walk around with."

CIGNA's "Evening of Entertainment," a perennial event at the RIMS conference, also marked the company's 200th anniversary. On hand to entertain were singer-actress Bernadette Peters and Jay Johnson, a ventriloquist who peppered his act with insurance jokes that did not spare underwriters, brokers or CIGNA's president seated in the front row. Dressed in a sequined gown, Ms. Peters opened her act with a "Pig Latin" version of "In the Money" and continued with songs from several Stephen Sondheim Broadway shows and a medley of Harold Arlen tunes. Silent Auction Nets $13,000 AS IN PAST YEARS, the opening night reception to benefit the Spencer Educational Foundation kicked off the RIMS conference. California totems like surfboards, sun and sand set the tone for revelers who shimmied to classics by the Beach Boys and Chuck Berry.

Despite the sluggish economy, and its undoubted effect on almost everyone's personal bottom line, RIMS members did their charitable best and dug deep into their pockets to bid on a variety of items donated to the Spencer Foundation's Third Annual Silent Auction. A total of $13,000 was raised with such big-ticket items as a 1993 exhibitor's booth and a Grand Cayman vacation up for auction. In addition, George Shattuck Jr., senior vice president of Johnson & Higgins, presented a check for $47,000 on behalf of the Spencer Foundation to its chairman, James Newton Jr.

RIMS presented its highest honor, the Dorothy and Harry Goodell Award, to Richard Heydinger, director of risk management services for Hallmark Cards Inc., in Kansas City, Missouri. Mr. Heydinger, a past president of RIMS Central Ohio Chapter and president of the Society in 19881989, was recognized as a friend, supporter and leader of RIMS throughout his 27-year risk management career.

The Richard W. Bland Memorial Award was presented to RIMS member Lloyd Hackett, risk manager for T. Eaton Co. Ltd., in Toronto, who was characterized by Fred Lamar, chairman of the Bland Award Committee, as "proactive, creative, and one who leads by example." The Bland Award recognizes outstanding performance or effort by a deputy member of RIMS in the area of legislation and regulation.

During lunch on Wednesday, graduates who earned the Associate in Risk Management (ARM) and Canadian Risk Management (CRM) designations were cited and the 1992 Cristy Award was presented to Charles Ford, corporate counsel for Schnitzer Steel Industries in Portland, Oregon. RIMS presents the award each year to the risk manager with the highest cumulative average for the three examinations leading to the ARM designation. On RIMS' behalf, Louis Drapeau, vice president of education in 1991, also recognized the winner of the 1990-1991 ARM Distinguished Graduate Award, given to the individual with the highest cumulative average on the three ARM examinations. The honoree was Robert Marrone, engineering consultant with Aetna Life & Casualty Insurance Co.

On Thursday, the last full day of the conference, as attendees began the inevitable process of evaluating and analyzing their week in Anaheim, Reggie Jackson had a parting piece of advice on what motivated him to excel as an athlete. "I wanted to be able to play hard all the time and to give the impression that 1 was something special," he said. Words of wisdom that readily translate from the ballpark into the field of risk management. - by Tom Johnson
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:includes related articles on Bosses' Day and exhibitors; Risk and Insurance Management Society
Author:Johnson, Tom; Oshins, Alice H.; Kurland, Orin M.
Publication:Risk Management
Date:May 1, 1992
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