RIMS global president on the risk manager-broker relationship

RIMS global president on the risk manager-broker relationship | Corporate Risk & Insurance

RIMS global president on the risk manager-broker relationship

Global president of the Risk & Insurance Management Society (RIMS), Nowell Seaman is uniquely qualified to comment on the risk manager/broker relationship. With 25 years as a risk manager to his name, the director of risk management at Potash Corporation of Saskatchewan was a broker himself for many years. Now overseeing the insurance needs for the world’s largest potash producer, he works alongside a team of brokers across a variety of different insurance lines. As he explains, his past life as a broker makes these interactions easier, as he understands the challenges that both roles entail.

“Certainly a great deal of risk managers come from the insurance or brokerage fields – it is a very good foundation for working in risk management for a corporation because brokers see a broad spectrum of risk,” he says.

Those risks have multiplied since Seaman made the switch from broker to risk manager some 25 years ago, with a much different dynamic now existing between the two sides. For him, the role of the broker is much more than simply discussing different insurance rates.

“When I started, the focus was on transaction,” he says. “Over the years it has evolved from protecting against the downside and looking for the financial means to pay for loss, into taking a wider view and looking at a broader range of risks.”

It is that approach – proactive rather than reactive – that Seaman believes separates the best brokers from the rest. The job requires wearing many hats, and an ability to educate your clients is another important facet of servicing a risk manager.

“There are still brokers that are very traditional and focus on the transaction, but I think those that want to serve the risk management community have really evolved in the services they provide – helping risk managers better understand risk,” he says. “It is brokers asking what services and expertise they can bring to the table.”

Managing risk for a huge entity like Potash Corp, Seamen utilizes an array of different insurance products. The brokers provide those products, and together the two sides craft an insurance strategy that leaves nothing to chance. It’s a mutually beneficial arrangement, and one Seaman is grateful for.

“I value the specialty expertise they bring – environmental, executive and management protection, cyber, but we have also seen a real advancement in the sophistication of property and loss prevention,” he says. “We really value those resources – being able to bring them to the table as and when they are needed. They really are part of the team.”

Potash Corp employs more than 5,000 people, so it’s not surprising that the company uses multiple brokers for its insurance needs. This increases the importance of proper planning and coordination, with one position in particular crucial in keeping the train on the tracks.

“We look at the account executive at the brokerage as the quarterback for those services,” explains Seaman. “When we engage a broker, we certainly want to look at the strengths of the account executive and how good they are at coordinating. We also look at the specialists they can bring to the team.”

In our Risk Managers on Brokers study, respondents varied in their answers when it came to frequency of contact with their brokerage. While some opted for daily communication, others thought weekly, monthly or even annually was perfectly fine. Seaman believes the risk manager and broker should converse regularly to ensure no important details slip through the cracks.

“I think it is healthy on a regular basis to engage in conversation about the needs of the account and what your expectations are,” he says. “I also think it’s important for a risk manager to listen to what the broker’s needs are, and that’s something that is not always done. It is also finding out if there are bottlenecks and frustrations, and what can the risk manager do to be a better client, so the broker can do the best job possible.”

Seaman is something of a traditionalist when it comes to maintaining contact with his brokers. Technology has made communication easier than ever, but in his opinion, the best method is still meeting in person. As our study shows, he is not alone in that opinion.

“In the insurance industry they talk about wanting to make the transaction more efficient and online,” he says. “I think with risk management that’s not really desirable. Certainly, a lot of the transfer of documents is electronic now. Over the last few decades the relationship with the broker has become less sales focused and more value-focused. I think you need that face-to-face contact.”

As someone who places a lot of stock in the risk manager/broker partnership, Seaman has been fortunate in that he has yet to see this relationship turn sour. He is happy with the service he is getting, but that’s not to say he doesn’t keep a close eye on the marketplace.

“Thankfully I have never had cause to make a mid-stream change with my broker,” he says. “But I think it’s healthy to have a regular review of your brokerage services. It is in most companies’ procurement policy to have some sort of a cycle where you can review and check the value of the service you are getting.”