selling your risk management program

Recording of this session via any media type is strictly prohibited.

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Selling Your Risk Management Program


Max Koonce, Senior Director, Risk Management, Wal-Mart Stores, Inc.

K. Max Koonce is the senior director of risk management for Wal-Mart Stores, Inc. responsible for their claims administration process in the general liability and workers’ compensation arena. Mr. Koonce received a B.B.A. degree in economics from Harding University and a J.D. degree from the University of Arkansas at Little Rock. Mr. Koonce is a member of the Arkansas and American Bar Associations, board member of the West Virginia Self Insured Association, board member of the Northwest Arkansas Medical Centers, member of the National Association of Social Insurance, and current president of the National Council of Self-Insured Employers.

Bob Peterson, Executive Vice President, Chief Marketing Officer, Sedgwick

Bob Peterson is executive vice president, chief marketing officer for Sedgwick responsible for account development, relationship management, product development, strategy, and overall marketing and business communications. Bob graduated from DePaul University with a BA in business communication and holds the Associate in Risk Management (ARM) and the Associate in Loss Control Management (ALCM) insurance designations.


What to expect

After attending this session you should be able to:

Articulate the value of a risk management/safety program

Enlist the support of all levels of your organization

Identify and report on areas of measurement


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Ground work


Align with company’s macro goals

What areas are important to your company?

• Growth• Leverage• Returns• Productivity• Retention• Stability

• Quality• Increased margins• Brand reputation• Expansion• Innovation• Compliance


Develop a solution-based plan

• Link risk information to strategic decision making• Embed a risk-aware culture at all levels• Embed risk management practices and responsibilities

within strategy and operations• Implement risk mitigation activities


Maintain a close relationship with all parties to increase success.

Know your audience

C-Suite

Operations

Employees


Selling to the C-suite

- Risk management as an investment- Financial pay-off- Direct/indirect costs – more than just

insurance buying- Direct – workers’ compensation costs/OSHA fines- Indirect – loss of productivity, training and retaining,

recruiting

- Support company’s macro goals

C-Suite


Selling to operations

Operations

- Request their help- Raise awareness- Increased productivity- Improved workplace conditions


Selling to the employee

Employee

- Drive behavior- Encourage safety discussions- Promote empowerment- Develop safety leadership skills


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Walmart case study


Align with company’s macro goals

BUYfor Less

OPERATEfor Less

SELLfor Less

GROWfor Less

Growth

Leverage

Returns

Growth in sales, number of customers, new stores and in new markets

Growing sales faster than operating expenses

Provide a stable level of returns to shareholders


Walmart’s metrics-based, strategic risk management initiatives support our corporate priorities

Solution-based plan

• Safety initiatives• Provider selection• Return to work• Claims scoring• Claims routing• Rx strategy – Prium• Legislative focus – WCRI, etc.• Texas non-subscription

• Casualty allocation system• Litigation prediction• Vendor TPA optimization• Products liability• Funds flow integrity• RM compliance and optimization• Fraud detection

Growth Leverage Returns


...but may be those that also enable growth, reduce volatility

– or likely, all three

The best measures of success might not be based on lowest cost….

Strategic Company Priorities

Growth

Leverage

Returns

Cost-BasedMetrics


Other industry examples

Company A

Company B

Company C

Metrics driven, return on investment focused

Quality, efficiency, lean/black belt approach

Centrally governed versus antonymous


Other interested parties


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Measure, report and communicate


Implementing analytical solutions

Develop Strategies

Create Tools

• Build strategies around key leverage points

• Learn the business processes & drivers• Identify and size potential opportunities

• Create tools/models to facilitate these strategies

• Refine processes, discard strategies that don’t work, continue testing

• Design a test or experiment with a control group

Refine / Implement

Test / Measure

Find


Internally developed metrics

Tools of the trade

Industry benchmarks

Total risk profiling/mapping (financial sector)

Value at risk (financial sector)

Risk management/business intelligence software


Messaging and strategy

Messaging - positive versus negative interpretation

Intended/unintended consequences Outside influences


Max Koonce, Senior Director, Risk Management, Wal-Mart Stores, Inc.

P.O. Box 1288 Bentonville, AR 72716-1288Email: [email protected]

Bob Peterson, Executive Vice President, Chief Marketing Officer, Sedgwick

1100 Ridgeway LoopMemphis, TN 38120Email: [email protected]

Questions, final comments and contact information

selling your risk management program

Documents

media type

risk management program

risk management arm

relationship management

areas of measurement

riskaware culture

csuiterisk management

board member