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Enterprise risk management practices should reflect the unique culture of each organization, provide a framework for their decision-making process and allow for measurement of results while continuously evolving to meet business challenges.
This philosophy sounds daunting, but when you work together with insurers, executive leadership and key staff, tremendous results can be achieved.
Best practices should be rooted in ISO 31000 Risk Management standards to help a company move towards an Enterprise Risk Management system that allows for efficient risk management with limited resources. Developing an Executive Risk Management Committee (ERMC) to refine the mission and vision of their risk management function is an essential first step. The development of mission and vision should focus on key risks faced by each department and determined through a broad discussion of risks as they impact internal and external stakeholders. A facilitated risk assessment discussion should be aimed at building a risk register and risk map which will serve as communication tools to the executive leadership and other external stakeholders.
After the Risk Planning phase, companies then focus on historical results and trends to develop manageable goals for implementing and monitoring the risk management system performance. One of the key measurements is Total Cost of Risk (TCoR). TCoR is not just a measurement of premium and retained losses, but should reflect all costs directly related to risk (risk management staff, safety staff, consultants, etc). TCoR can be reported in a dashboard-like context to external stakeholders as part of the annual budgeting process.
If you have questions about risk management planning, risk mapping or developing a risk management foundation for your organization, contact any of us at Propel Insurance.
Alternative programs, innovative solutions, detailed advice, collaborative process…not always the phrases associated with public entity insurance and risk management for major construction projects. Yet these are the tools Shon uses every day at Propel to help make his clients more successful. As a 25-year veteran of the insurance and risk management industry, Shon has benefited from his experience addressing risk from many different angles.
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