14 3C 2014 Can Strategic Risk Management Work for You

Proudly presents… Can Strategic Risk Management Work for You? Tuesday, September 16 Copyright Risk and Insurance Management Society, Inc., 2014 Our speakers Carol Fox Director of Strategic and Enterprise Risk Practice RIMS, the Risk Management Society™ cfox@rims.org | www.rims.org Prior to joining RIMS in 2010, Carol held a number of progressively responsible risk management positions in the customer care, communications, manufacturing, defense, and insurance industries A Miami University graduate, she serves on its Center for Business Excellence advisory board and is vice chair of the U.S Technical Advisory Group for ISO 31000 standards In 2009, she received RIMS’ prestigious Harry & Dorothy Goodell Award In 2011, Treasury & Risk acknowledged her as one of its 100 Most Influential People in Finance Carolyn Snow Director of Risk Management Humana Inc Carolyn joined Humana fourteen years ago, progressively managing clinical and operational risks, as well as its corporate insurance program Her prior experience includes VP of Marketing at Aon Risk Services and in Underwriting and Marketing management positions with Fireman’s Fund and Cigna P&C Currently RIMS president, she served in a number of board roles, while volunteering as Risk Manager in Residence at Appalachian State, Ball State University, Temple University and University of Central Arkansas Carolyn is a member of the Advisory Board for the Business Insurance Risk Management Summit, was named to BI’s Women to Watch list in 2009, and is a member of Eastern Kentucky University Risk and Insurance Advisory Council Copyright Risk and Insurance Management Society, Inc., 2014 Agenda Overview Welcome and Introductions What is Strategic Risk Management? How Does Strategic Risk Management Work at Humana? Why Should You Care About Strategic Risk Management? Exploring Risk Appetite and Risk Tolerance Emerging and Dynamic Risks in a Swan Environment What You Need to Know Closing Remarks Disclaimer: The examples used herein and exercise factors are based on publicly available information for educational purposes only RIMS and the facilitator disclaim any specialized knowledge or specific information about the noted organization, other than what is presented Copyright Risk and Insurance Management Society, Inc., 2014 Introductions Education Social service Technology Business service Financial institutions Retail Health care Insurance Transportation Government Mining Other Many missions – same goal: SUCCESS RIMS’ Mission: To advance risk management for your organization’s success Copyright Risk and Insurance Management Society, Inc., 2014 What we have here is a failure to communicate … WHAT IS STRATEGIC RISK MANAGEMENT? Copyright Risk and Insurance Management Society, Inc., 2014 What Does Risk Mean to You? Risk = the potential that a chosen action or activity (including the choice of inaction) will lead to a loss (an undesirable outcome) Wikipedia Risk = an uncertain future outcome that can either improve or worsen our position RIMS Copyright Risk and Insurance Management Society, Inc., 2014 What Does Risk Management Mean to You? Source: RIMS Workshop: Risk Management Techniques: Gaining the Risk Advantage Copyright Risk and Insurance Management Society, Inc., 2014 Strategic risk management (“SRM”) is a business discipline that drives deliberation and action regarding uncertainties and untapped opportunities that affect an organization’s strategy and strategy execution Source: RIMS Strategic Risk Management Implementation Guide All rights reserved Copyright Risk and Insurance Management Society, Inc., 2014 Not just another framework – another way to think Strategic risks Risks arising from the strategic plan Source: RIMS Strategic Risk Management Implementation Guide All rights reserved Copyright Risk and Insurance Management Society, Inc., 2014 Strategic Risk Management in Action… HOW DOES STRATEGIC RISK MANAGEMENT WORK AT HUMANA? Copyright Risk and Insurance Management Society, Inc., 2014 10 Do You Want to Build a Strategic Risk Management Capability? WHAT YOU NEED TO KNOW Copyright Risk and Insurance Management Society, Inc., 2014 37 Do the Pre-work on Your Organization • What creates value in your organization? • How is value captured? • How is strategy set, communicated and executed? • What is the actual attitude towards risk management? • Does the organization’s culture support a strategic risk management approach? Copyright Risk and Insurance Management Society, Inc., 2014 38 WHAT IS YOUR BUSINESS MODEL? Network and Operations Market and Customers (Behind the Scenes) (Perception) PARTNER NETWORK CUSTOMER RELATIONS NETWORK Producers, Suppliers, Distributors Interactions, Customer Service, PR, Marketing RESOURCES ACTIVITIES Equipment, etc Operations, Strategy, etc VALUE PROPOSITION CHANNELS CUSTOMERS Internet, Retailers, etc Buyers, Advertisers, etc Why Customers Buy COSTS REVENUE (Exec., HR, R&D, Finance, Purchasing, Risk Management, etc.) (Sales, Royalties, Donations, Contributions, Income, etc.) CAPTURING VALUE Revenue Less Costs Delivering Value Creating Value Copyright Risk and Insurance Management Society, Inc., 2014 39 The RIMS SRM Framework SRM can help accelerate organizational performance in support of strategic goals and objectives Copyright Risk and Insurance Management Society, Inc., 2014 40 Do the Pre-work on Drivers • What value will SRM add that existing processes not provide? • Who are the key players required to succeed? • Do they already support this approach? Will they support it later? Copyright Risk and Insurance Management Society, Inc., 2014 41 Unlocking Enterprise Value with SRM Source: RIMS Strategic Risk Management Implementation Guide All rights reserved Copyright Risk and Insurance Management Society, Inc., 2014 42 Unlocking Enterprise Value with SRM Source: RIMS Strategic Risk Management Implementation Guide All rights reserved Copyright Risk and Insurance Management Society, Inc., 2014 43 Source: RIMS Strategic Risk Management Implementation Guide All rights reserved Copyright Risk and Insurance Management Society, Inc., 2014 44 Source: RIMS Strategic Risk Management Implementation Guide All rights reserved Copyright Risk and Insurance Management Society, Inc., 2014 45 Source: RIMS Strategic Risk Management Implementation Guide All rights reserved Copyright Risk and Insurance Management Society, Inc., 2014 46 Bringing It All Together • Once you have identified the why, who, what and how much of your SRM program, you will need to spend some time and effort to integrate that process into the organizational culture and its practices • Exploit existing risk and management systems as much as possible – be an “add-in” rather than “add-on” • Communicate, communicate, communicate! Copyright Risk and Insurance Management Society, Inc., 2014 47 Risk Control Network Source: RIMS Workshop: ERM Accelerating Theory Into Practice Copyright Risk and Insurance Management Society, Inc., 2014 48 Revisiting RIMS Strategic Risk Management Framework Source: RIMS Strategic Risk Management Implementation Guide All rights reserved Copyright Risk and Insurance Management Society, Inc., 2014 49 RIMS Can Help Make Strategic Risk Management Work for YouThank You Closing Remarks Final Questions Key Takeaways Please visit RIMS Strategic and Enterprise Risk Center www.rims.org Copyright Risk and Insurance Management Society, Inc., 2014 50 Enjoy the rest of the 2014 RIMS Canada Conference! Copyright Risk and Insurance Management Society, Inc., 2014 ... Risk Risk Risk How Impactful? Risk Risk Risk Risk Risk How Well Managed? Copyright Risk Humana Inc., 201 4Management Society, Inc., 2 014 Copyright and Insurance 20 Strategic Lessons for Risk Professionals... RIMS Strategic Risk Management Implementation Guide All rights reserved Copyright Risk and Insurance Management Society, Inc., 2 014 49 RIMS Can Help Make Strategic Risk Management Work for YouThank... Society, Inc., 2 014 Agenda Overview Welcome and Introductions What is Strategic Risk Management? How Does Strategic Risk Management Work at Humana? Why Should You Care About Strategic Risk Management?