Photo by Sammie Chaffin on Unsplash
An old friend of mine started in the risk management business 25 years ago and I recently came across an article he wrote about risk management. In the property insurance business, risk management is our number one priority and the foundation of protecting our policyholders, yet its true value often goes unnoticed. Like putting on a seatbelt before driving, our industry’s risk managers minimize the severity of potential consequences. Just like looking both ways before crossing the street reduces the frequency (likelihood) of a claim.
When talking to my pal, he said his career success as a risk manager has been measured by what doesn’t happen. When no accidents occur, no crises unfold, and the claims don’t roll in, his job is done. However, this very success leads to a paradox: a risk averted is invisible. No one gives him a pat on the back for something that never materializes! We should pause and consider what is avoided because of our risk manager’s careful planning.
He reminded me at lunch that risk management is a long-term investment in safety and stability and it was a great conversation about how the absence of a negative event is intangible. In my world of working with the media and other “messengers,” an event not happening doesn’t generate headlines or tangible rewards. But just because we don’t see the results in real time doesn’t mean they aren’t there. Every time an insurance company avoids financial loss, we retain policyholder surplus. It’s that simple. So lesson learned over lunch with one incredible risk management professional! His invisible success proves why risk management is so critical. He isn’t about receiving recognition but he just makes sure frequency and severity of an “incident,” while likelihood and harm is ever-present, never reaches a tipping point. His work may go unnoticed, but its impact is felt in the quiet, unremarkable moments where crisis is avoided, and everything continues to run smoothly. Hats off to all our risk management readers!
As a reminder, for those reading our LMA Newsletter who want to help those impacted by Hurricane Helene, the Florida Disaster Fund is activated. The fund is a component of the Volunteer Florida Foundation, Florida’s official 501(c)(3) charitable organization that supports volunteerism, community service, and disaster recovery. To donate, click here. Our thoughts and prayers remain for those who lost loved ones and for the survivors who face the long task of recovery and rebuilding their lives and communities.
See you on the trail,
Lisa
