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Managing your risk by Michael Kelly

NCACC Risk Management Director Michael Kelly writes a regular column on risk management for CountyLines. With more than 41 years of risk management/ insurance experience, he holds the CPCU - Chartered Property & Casualty Underwriter, ARM-P - Associate in Risk Management for Public Entities, CRM - Certified Risk Manager, ARe - Associate in Reinsurance and CIC - Certified Insurance Counselor Professional Designations. He can be reached at michael.kelly@ncacc.org or (919) 719-1124.  For archives of this column click here.

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Nov 26

Earning and learning the tools you need

Posted on November 26, 2013 at 3:57 PM by Chris Baucom

Depending on your entity’s size, the staff member charged with the duty of risk management often has this responsibility with little or no formal risk management training. This trial by fire can be a stressful and potentially expensive process as various new and or reoccurring exposures crop up during normal county operations. This month’s column will highlight some of the avenues available for learning about risk management.

There are two recognized formal educational programs available to gain a solid foundation for risk management, aside from graduating from a University with a degree in Insurance/Risk Management. The first is the Certified Risk Manager (CRM) professional designation provided through the National Alliance for Insurance Education and Research. This is a designation that is earned by completing a series of five courses centering on risk identification, risk analysis, risk control, financing the cost of risk and administration of your risk management program once it is established.

Each course lasts 2 ½ days and incorporates direct application examples through case studies, enabling the participants to leave with source materials designed to help them apply the learned principals to their entity. Each of the five courses concludes with an optional 2-hour essay examination, which is required for those interested in achieving the designation. Maintaining the CRM professional designation requires annual updates of 20 CE hours through the National Alliance by auditing these same courses, or other approved ancillary courses similar in design. Details for CRM are located here: www.scic.com/courses/CRM

The second most recognized risk management educational route is through The American Institute for Chartered Property Casualty Underwriters. This is the Associate in Risk Management for Public Entities (ARM-P) professional designation. It requires completing four courses that encompass the same basic principles as the CRM with an additional, separate course designed to delineate the exposures singular to non-profit, public class entities.

While there are instances where these courses may be available through actual classes, most of the participants learn the material and prepare for the examinations through self-study and individual research. Like CRM, to achieve the designation, each course requires you to pass a two-hour examination. The ARM-P designation fully immerses the participant in a deeper level of risk management theory and truly tends to fill in some of the cracks the CRM course might not delve into as deeply. Details for the ARM-P are located here: www.theinstitutes.org/guide/designations/associate-risk-management-arm

For a beginning risk manager, my opinion is the CRM route will give more working examples and provide more useable templates to set up your array of risk management tools quickly. In addition, by attending actual seminars, participants can ask questions, which insures a better understanding of the required principals before moving on. If the ARM-P program is being accomplished through self-study, this option is lost.

Once the CRM is earned, if it is followed by the ARM-P, the level of understanding the practice of risk management is greatly enhanced. Together these two learning routes develop a solid foundation for understanding the process/method of risk management. This knowledge, coupled with supplying a tool box of template spreadsheet reports used for analysis work, gives the participant an excellent start.

Thirdly, an excellent method to learn risk management is through exposure and interaction with your peers. This is best done through membership in your local North Carolina chapter of PRIMA (Public Risk Management Association). Their Mission Statement outlines their primary goals:

To advance the knowledge and practice of public risk management in North Carolina by (1) being the primary resource for public risk management educational programs for risk and safety related professionals employed with public entities, (2) serving as a resource for activities and educational opportunities for students in a risk management profession at public institutions and (3) promoting and advancing the profession of public risk management by continuing to establish and enhance the relationships between NC PRIMA and its stakeholders.

While PRIMA is in fact a national association, the NCPRIMA is a local chapter, and by being engaged at the local level, it will allow a closer relationship and access to your risk management peers. As such, local chapter membership should generate more pertinent information specific to North Carolina. More details can be found here: www.ncprima.org/

Lastly, the insurance carrier that is providing your coverage should have available risk control services and be in a position to provide services to address the risk management principal of risk control. Preventative risk control measures such as defensive driving courses, premise exposures assessment, mock OSHA inspections and safety/operational policy development are often available for the asking or a per hour additional charge.

In addition to the risk control services we offer, members of the NCACC Risk Pools also have access to membership educational sessions held each fall; beginning last year with Property & Casualty Program Specialist Charlie Eaton hosting the opening topic: Insurance 101. This year’s program theme was Team Risk Assessment Scenarios – facilitating case example team discussions on reoccurring issues such as understanding certificate of insurance requirements, volunteer exposures, hold-harmless clause requirements, contractor/construction project exposures, and law enforcement/emergency service staff moonlighting.

In addition a training session for the use of the IVOS loss reporting system was led by Charlie D’Angelo from Sedgwick CMS, followed by Risk Control Department Manager Bob Carruth’s discussion of using Excel Pivot Tables of exported data from the IVOS system to slice data, allowing pin-point analysis of your loss drivers. There is typically an almost exponential increase in knowledge when active discussions take place, led by a professional.

Everyone would agree, having knowledge gives you increased power – and in this specific case, power to be a more effective risk manager.