I’ve coached winning teams and I’ve coached losing teams, and I’m not saying anything new by proclaiming that winning is infinitely better. But it takes a different kind of management skill to coach in good times than it does when you are just trying to stay in the game. On this new playing field with economic forecasts of vast opportunity ahead, the last thing you want to think about is risk management.
However, opportunity and risk always go hand in hand, and now is not the time to forget about minimizing the possibility of losses. Any expansion plans or strategies for increasing productivity have to include risk management.
In 2003, we ran an award-winning editorial series – The Cost of Risk. It came at a time when skyrocketing insurance premiums forced some carriers to reduce their fleet size or even go out of business. Carriers scrambled to find an acceptable approach, but to be profitable meant taking some serious risks.
The first article examined the potential risk of combining higher deductibles with less coverage and explored the pros and cons of different strategies. Other articles in the series detailed nontraditional insurance plans like group captives, hiring the right people and ensuring they stay on the straight and narrow, what to do in case of a catastrophic accident and an overview of the legal issues involved in documentation policies.
Reader response to these articles was overwhelming. In fact, according to a reader survey that evaluated the six-part series, respondents not only gave excellent ratings to the individual articles but also highly recommended the series to others.
Because of strong reader interest in continuing the series, we are bringing The Cost of Risk back as a monthly article within the Finances department.
Why Finances? Because that what drives risk management. The tools of risk management span the whole business – solid financial management, aggressive safety programs, sound operational procedures, careful monitoring of the tort system and even savvy use of equipment and technology.
All of these subjects will be explored in The Cost of Risk in the coming months. But ultimately, it’s about taking advantage of new opportunities and potential profits – while at the same time running defense with risk management.
At game’s end, the winners always are those who call the gutsiest plays – backed up with the best information available.