There's more to insurance risk management than hazard identification and control. It's often also about evaluation, expert negotiation and seeing the bigger picture...
Our guest for this podcast episode is RiskSTOP Group's Head of Risk Engineering and Surveys, David Reynolds, who talks about balancing the needs of insurer, broker and policyholder when it comes to risk improvement and control measures. Uncover the fascinating and occasionally frustrating life of an insurance risk surveyor by listening in today...
If you would prefer to read rather than listen to this episode, you can find the transcript below.
Join in our discussion around risk management and the bigger picture on Linkedin here.
Discover more about RiskSTOP.
TRANSCRIPT
Johnny Thomson 00:02
We know that risk management is about controlling hazards, but in reality, there's a lot more to it than that. Hello everyone and welcome to the RiskACUMEN Podcast, which offers thoughtful insight around risk management. Now when we think about managing risks, it tends to conjure up a simple process around identifying hazards and then controlling them. However, risk identification and control is only part of the overall picture. There's also evaluation and prioritisation of risks to consider, and understanding the probability and impact of events. Today, I'm joined by Dave Reynolds, Head of Risk Engineering and Surveys at RiskSTOP Group, who is going to share with us an interesting example to show how risk management is as much about negotiation as it is about control. Hi Dave, thanks for joining me today.
David Reynolds 00:59
Hi Johnny, how are you?
Johnny Thomson 01:00
Very good. Very good mate, and you?
David Reynolds 01:03
Yeah, very well thank you. Very well.
Johnny Thomson 01:05
Brilliant. Now at this point, I usually ask my guests to give me a bit of career background and so on, but Dave's been working in the field of risk management for over 30 years now and we've only got around 20 minutes for this episode. So Dave, I'll ask you to be concise here and give me more of a... what you do now and why you do it, rather than everything you've done over the course of your career in risk management, if that's alright?
David Reynolds 01:30
Okay. So my main responsibilities are everything surveys at RiskSTOP. I manage our team of consultants, I get involved in training, technical referrals, whether that be for our our own people, or for our external clients, brokers, insurers etc. And I suppose the the best part of the job, I still go out and do surveys and that's the bit that gets me out of bed in the morning and gives me the buzz.
Johnny Thomson 02:01
That's where you get to meet the people in good all the interesting places basically, isn't it?
David Reynolds 02:05
Oh absolutely. You know, and that's the beauty is being able to go out and to help people.
Johnny Thomson 02:12
And it's quite, it's quite varied, isn't it in terms of the risks that you would go out and visit. Give me just a taste, you know, one extreme to the other if you like, of some of the weird and wonderful places that you've been in your time Dave?
David Reynolds 02:27
Well, from a security point of view, I visited the largest precious metals refinery in the world in Belgium, to look at their security. Been out to, obviously prior to what's going on in Russia now, but I was in Moscow looking at a high end jewellers. From a property point of view anything from abbatoirs.
Johnny Thomson 02:52
Lovely!
David Reynolds 02:54
Oh they're always fun. You know, iconic buildings such as Tower Bridge. The whole range of industrial risks, airports...
Johnny Thomson 03:08
Yes and I can understand why you enjoy it too much, because I mean in essence you're getting access that would be denied to most of us, wouldn't it, in the real world?
David Reynolds 03:17
Oh, absolutely. You know, the bit that says 'public keep out' are probably the areas that are of more of interest to me. Because obviously if you take a hotel, for example, you wouldn't expect front of house to be untidy and unruly. And because obviously you're trying to attract people into it, but it's what goes on behind the scenes that's probably more of interest.
Johnny Thomson 03:42
Okay Dave so I mentioned at the beginning that risk management is more than just hazard identification and control. In reality, it's about balancing priorities, and also being able to evaluate the bigger picture of course, and you've got a case haven't you, which illustrates this that you surveyed quite recently I understand.
David Reynolds 04:03
Yes, I mean, it was a food risk, sort of food manufacturing risk.
Johnny Thomson 04:09
Yeah. I appreciate you can't give away a lot of the information here because there's confidentiality and so on.
David Reynolds 04:15
Yes, so I'll keep it I'll keep it quite broad... where insurers had been trying to get the client to either instal sprinklers or to remove expanded polystyrene panels. I think we're all aware of the panel issue. It's not just blocks of flats, but the food industry has a similar problem. So I was asked by insurers to go down to have a look to talk to them about the potential to remove the panels or to put in the sprinklers. So I went to site, chatted with the finance director and one of the things you know he pointed out sort of quite quickly, it's it wasn't just about the cost of doing what they were being asked or potentially being asked to do, which sort of ran into millions, as opposed to hundreds of thousands of pounds. It was also the potential that they would have to shut down production, which would impact on their ability to service their two main clients. And as he said to me, you know, if we can't service them potentially we lose the business. And at the end of it, we don't have the business to come back to.
Johnny Thomson 05:33
Yeah, and I know, you can't mention the name of the the two big clients, but we would all recognise them, let's put it that way.
David Reynolds 05:40
Absolutely. Yeah, absolutely. So what we, as I said, agreed to do was to sort of have a look around and come up with some ideas. So we did just that. And what we looked at was sort of started to work out whether we could actually control fire starting rather than fire having to be put out. And you know, what, whilst there's still a cost involved in what we were looking at, it was obviously a far less of a cost than having to either install the sprinklers or take out the panels. And you know, very quickly, the site contact became enthused with what we were talking about, what I was talking about. You know, ideally they would remove the panels and ideally they would put in sprinklers, but just on this occasion it just wasn't something that was going to happen, or something that that was easily achieved.
Johnny Thomson 06:34
And I think what I really like about this example Dave, is it shows that risk management can never be about absolute control, necessarily. You know here it's very clear, the company could have gone to the nth degree to control the hazard, but also it probably would have gone out of business. And there's not, there's not much point in that.
David Reynolds 06:53
No, absolutely. You know, don't get me wrong, there are rules and guidance documents that we use, we refer to, but nothing can be completely black and white. People have to appreciate that there is grey involved, and it's taking those rules, those guidance documents and adapting them to suit circumstances.
Johnny Thomson 07:15
Yeah. So it's about being pragmatic and being realistic, in essence?
David Reynolds 07:20
Yeah, and also explaining the reason for doing something. So rather than just going in and saying, you know, you've got to do A, B, and C. Why? Well, because insurers will want that. It's explaining the benefits of what you're trying to achieve. And quite often you can get them more involved in the solution as you discuss the ideas. So in actual fact, if you can swing the idea back to the client, back to the policyholder whereas they start to almost sort of think it's their idea, then it's so much easier to get a positive outcome.
Johnny Thomson 08:00
Yeah, it sounds like you almost have to be an expert negotiator at times, especially when you're trying to balance the needs of the insurer, who of course is taking on the risk, and then the needs of the business as well. And also the needs of their representative, the insurance broker, all at the same time?
David Reynolds 08:17
Oh, absolutely. Absolutely.
Johnny Thomson 08:19
You must have some difficult conversations, Dave?
David Reynolds 08:24
There are some times where it doesn't matter what you say, or how you broach something, you do get times when people just don't see the benefit or won't do things. And at that point, you've just got to agree to disagree. You can't end up in an argument or conflict. You sort of handle the situation as you sort of see fit.
Johnny Thomson 08:48
But I guess as well as your technical risk management capabilities, you also need all kinds of soft skills around communication. evaluation, and so on to do your job well really?
David Reynolds 08:59
Yeah, it's a strange job, you know. I often say to people, you have to be somewhat of an extrovert and also somewhat of an introvert. The extrovert, you go to site and you've got to build a relationship very, very quickly. You got to get people on your side. And then the introvert is when you go home and you're sat in your office, you know we all tend to be home workers doing the job we do. You've got to spend that time, you know, obviously, by yourself, making decisions, writing reports, with very little interaction with the outside world.
Johnny Thomson 09:33
And I think probably the introvert is a more classic sort of stereotypical viewpoint, and that must make it tricky at times, because I think risk managers, consultants can be seen as you know, that person with a clipboard who just wants to impose something costly and time consuming and that must be an incredible barrier to you when you have that first, initial contact and meeting with the business that you're really just trying to support and help to mitigate and manage the risks that they face.
David Reynolds 10:05
Yeah, one of my opening gambits is 'I'm not here to catch you out'. This is about talking through the risks associated with the site, looking for ways to control, having a wander around and actually seeing things that people become blinkered to.
Johnny Thomson 10:22
So it must almost be quite frustrating when the value, the real value of what people like you offer isn't always perceived or understood. You must have to have quite thick skin at times?
David Reynolds 10:38
Well if you think about it, you can never tell when we've got something right, you can only tell when we've got something wrong. Because you'll never know that you've stopped a fire or stopped a burglary or stopped or prevented somebody from having an accident. But you will know when you've got it wrong and somebody has had an accident, or there has been a fire.
Johnny Thomson 11:04
And and like you said, if you can't, if you can't prove necessarily that what you're what you're doing will make a difference, which we all know it does of course, it's understandable that people might just think you're there getting them to spend money and take time out for things that that aren't really required.
David Reynolds 11:26
I suppose the good thing at the moment is the jobs slightly easier as we're going through a hard insurance market. And I think, you know now where people are finding it difficult to get insurance in some instances at a, what they consider to be a reasonable rate, risk management becomes an easier conversation.People are looking for ways to improve risk, in order to provide some sort of evidence to drive rate down.
Johnny Thomson 11:58
And it's that position isn't it really, I think that could make a big difference here, as you're alluding to there. You know, if it's positioned as there's somebody coming out to help and to guide you here, you know, to make improvements around your risk, that are going to be going to be helpful to you and your organisation. Rather than saying, you know, somebody's going to come out here and tell you what to do, and you're gonna have to do it. It sounds a lot more palatable, doesn't it?
David Reynolds 12:28
No, but you know, sort of the underlying thing is that there are times when you are telling people that they do have to do it, but you do it in a way that doesn't sound... trying to think of the word... overly authoritarian.
Johnny Thomson 12:48
Yes.
David Reynolds 12:49
You know, you explain why you are trying to get them to do something, rather than saying, you know, thou must do that!
Johnny Thomson 12:59
Yeah. And I think you're right, I think that is the most important aspect here that people feel there is some rationale, there is some reasoning behind what is being, what has being proposed, or what is being required?
David Reynolds 13:10
Oh, absolutely. I mean to be fair, I think most, most people that you see, whether it's a person or a group of people tend to be appreciative and understand what you're trying to do and what you're trying to achieve and are willing to work with you. As I said, every now and then you do get somebody that's almost head stuck in the ground and just isn't gonna budge.
Johnny Thomson 13:35
Yeah, yeah, we're all different. We're all different, of course, but yeah it would be ideal if everyone could understand that what you do, and what the insurance industry actually does, as well, of course, you know is it's all about protecting people and their assets and adding value that way. And I think sometimes that falls by the wayside a little bit and people lose sight of, of really what insurance and risk management and things like that are actually all about.
David Reynolds 14:03
No absolutely. Again, another line that I quite often use on site is, you know at the end of the day if I get it right for you and I stop you having a fire or a loss of any sort, ultimately I get it right for the insurers as well. So actually, you know, sort swinging it back round to sort of say, yeah I am here on behalf of the insurers, but also I'm massively here on your behalf as well.
Johnny Thomson 14:28
Yeah definitely. And you're there for the survival of their business, you're also there for the people that are employed there, and so on as well with all of that at the same time?
David Reynolds 14:40
Well we know that there's a high percentage of businesses that never come back from a major loss. That means that there are people out of work, there are families at point that don't have food on the table potentially.
Johnny Thomson 14:56
Yeah, brilliant. Well listen Dave, thanks for coming on, and giving us a bit of insight into the life and the frustrations of an insurance risk engineer and surveyor. Do come back on as well and give us some of your vast technical insight as well some time, if that's okay Dave?
David Reynolds 15:17
Absolutely. No, it's been a nice to catch up.
Johnny Thomson 15:21
Yeah. Brilliant. Well, thanks again Dave, really, really good as you say, to catch up.
David Reynolds 15:26
Good stuff, thank you.
Johnny Thomson 15:27
And that's all for this episode of the RiskACUMEN podcast. If you have any questions or comments around the topic we've been discussing today or any of our other risk related content, please head to our LinkedIn page. You can find a link at riskacumen.co.uk Thanks again Dave. and thanks everybody out there for listening in and until next time, good bye for now.
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