If you’ve ever considered how a broker could approach the risks facing one of Australia’s multi-faceted mining operations, you’ve come to the right place.
Those who attend ANZIIF’s latest transformative study course, Client Risk Management for Brokers (CRMB) in the Hunter Valley, will be given the opportunity to nut out that very dilemma in their own way as part of ‘syndicates’.
And if it sounds out of your comfort zone, you won’t be alone. Everyone else will be in the same boat but will be able to draw on the guidance and knowledge of experienced syndicate leaders.
‘Ideally participants will have a few years of broking experience in order to contrast the perspectives they get in the broking activities over the three-day course,’ says risk management veteran Harry Rosenthal, who is on the ANZIIF Organising Committee for CRMB.
Rosenthal, who also sits on the ANZIIF Risk Management Faculty Advisory Board, says the course is structured to give brokers a risk vocabulary outside insurance.
‘The idea is to enable brokers to participate in conversations with risk and insurance professionals using terms that are commonly understood,’ he says.
‘Secondly, we’re aiming to give brokers the skillset to look at risk in a broader context — not just the risk that currently has an insurance solution, but also the risk that has no insurance solution — at least today.’
‘The course won’t limit brokers to the insured risk world, we want them to experience a much wider universe.’
REAL WORLD CHALLENGE
Rosenthal says the case study, which presents the risk profile of a highly complex mining operation, will give participants a sense of a client with needs above and beyond the every-day approach a broker might usually take.
‘The first part of the challenge is to understand the components of the risk process as opposed to an insurance process, and the second part will be having the students find their own way through applying it,’ he explains.
‘In the real world, you get a lot of information and data. Half the (risk management) skill is identifying what information is significant and useful and how it can be used to better meet the needs of the client.
‘There are a lot of risks in the environment of a mining client for example, but not all of them are significant and not all of them are good uses of people’s time. We want (participants) to focus on the risk that matters.’
A WIDER LENS
Rosenthal observes that brokers can sometimes develop a myopic view of risk financing over the course of their careers.
‘We live in such a dynamic and changing environment it’s wise to challenge that experience,’ he asserts.
‘The role of the broker is to match the needs of the client with the availability of products in the market.
‘I think that to understand the needs of the client, you’ve got to understand the environment — the context in which the client is operating.
‘That context is changing at a very rapid rate now. Part of the (CRMB) program is to give the broker an appreciation of how dynamic the risk profiles of their clients are.’
KEEPING UP WITH CHANGE
Recently retired from his role as General Manager of Risk Management Services with Regis and Partners, Rosenthal says in the same way laws are evolving more slowly than the circumstances that bring about litigation, risks are currently emerging at a faster rate than the insurance sector can respond to them.
‘For example, identity theft and cyber risk have been around for a long time, but only now many years later are we beginning to see products that address them,’ he points out.
‘In addition, everyone these days is dealing with a global environment.
‘You might have a broker who only used to deal with people who are in his or her own suburb, now they’re dealing with people across the globe with the same level of ease and efficiency.
‘With that comes remarkable emerging risks that will impact their effectiveness. You have to understand that to remain viable in the game.’
A FORTUNATE CAREER
Rosenthal says the timing of his own career has been ‘most fortunate and somewhat unique’.
‘My background was in archaeology, and with that discipline I worked in the Middle East, Mexico and Europe,’ he shares.
In the late 1970s Rosenthal says he ‘decided to settle down’, received an MBA and started working in local government.
‘That was during the time when liability risk financing costs were growing to an unsustainable level, and many large instrumentalities were examining self-funding models for liability risks and eventually, all risks,’ he says.
‘In my case, my employer, the City of St Petersburg, decided on a self-funding model and I was appointed as the first risk manager.’
Rosenthal says that in most of his subsequent roles, he was the organisation’s first risk manager which gave him great leeway in creating the operational aspects of his various jobs and a free hand to develop cost effective, self-funding models.
LOVE FOR HIGHER EDUCATION
He emigrated from Florida to Australia in 1996, where insurance mutuals were a popular solution to the risk funding challenges and worked in both the government and private sectors.
‘I began teaching risk and insurance at the University of Technology, Sydney (UTS) in 1997, in a casual role, and greatly enjoyed the university environment,’ he recalls.
‘I also received additional degrees from UTS, which gave me a very close look at the tertiary sector.
In 2003, after leaving his private sector work third-party claims administration and crisis management, Rosenthal was appointed the University of New South Wales’ first Director of Risk.
‘I’ve been hooked on higher education ever since,’ he says. ‘I consider finding this sector to be one of the luckiest developments in my career.’
As well as holding this role, Rosenthal was a manager at Unimutual, a discretionary mutual of Australian universities and affiliates and past President of the Australasian University Risk and Insurance Management Society (AURIMS).
He is the former chairman of the OHS Committee at the Australian Nuclear Science and Technology Organisation and a past editor of Australia’s risk management professional newsletter, Risk Management Today.
Rosenthal currently serves on industry committees for ANZIIF and frequently presents and writes about loss control and risk management.
MANY CAREER HIGHLIGHTS
For Rosenthal, career highlights have been many.
‘In general, he says, working in the area of pandemics was extremely fascinating, as it requited a large, collaborative effort.
‘For example, effective pandemic response planning requires the orchestration of diverse university resources and staff, including response centres and venues where many people gather and as the provision of medical expertise.
‘It also required detailed coordination between government, public health and the general community in the planning.
‘I found that degree of multi-stakeholder engagement and participation to be extremely enjoyable as well as challenging. I learned a great deal from the exercise.’
ENGAGING THE PEOPLE AT THE TOP
Rosenthal says the new CRMB course is set up to give brokers skills to engage with CEOs and other executives in the organisation, to speak with confidence and use analytical skills to support their clients’ risk decisions.
At board level, he says, the risk management discussion can be chaotic.
‘Everybody thinks they’re an expert in risk management,’ he says.
‘It’s not like finance, where if the board is having a financial conversation, people who don’t know finance are quiet, or marketing, where people who don’t know marketing are quiet.
‘With risk everyone is in the game and everyone has a perception or concept of risk.
‘So, the challenge is to create an environment where those conversation can happen with mutual understanding mutual terms and standards.’
A STEER IN THE RIGHT DIRECTION
While Rosenthal says most boards think they understand the organisation’s level of risk, they need help to understand which risks really matter.
Faced with the problem presented by the case study, the CRMB group will break off into ‘syndicates’ expected to approach the solution from their individual perspectives without too much cross-pollination.
‘Each syndicate will be overseen by a facilitator who will helps steer participants in the right direction.
‘The syndicate advisors will offer hints, but at the end of the day, participants have to create the analytical context and come up with the proposed recommendations.’
Rosenthal says brokers retain customers who feel that they truly understand their needs, including the ‘waters in which they swim and the environment in which they operate’.
‘I believe a broker that demonstrates a wider lens with which they understand and empathise with a client there is a greater the possibility of retaining that client over long periods of time,’ he says.
‘The more knowledge you have and the better you can utilise a common nomenclature, processes of analysis and ways of expressing risk, the more you can add value at different levels.’
HUMAN FACTOR IS THE CUTTING EDGE
He adds that these days, we’re dealing with insurtech, where insurance companies are using artificial intelligence and customers are engaging with them online.
‘CRMB will offer the opposite. This is humans engaging humans with empathy, understanding and compassion. I think that’s going to be beneficial for the broking sector.’
Rosenthal says here is a lot of risk information in the CRMB course.
‘The challenge will be to find out which risk matters and how to express that to the senior management of an organisation.
‘If brokers leave the course with that ability and confidence, I think we will have truly given them a professional skill that will benefit them throughout their career.’