The role of an enterprise risk manager is to be able to see the big picture of risk rather than transactional and make timely decisions.
This is according to Mitch Aucoin (pictured), Vice President of Insurance, Marriott International.
“In the old days, risk managers just bought insurance and didn’t have to worry about other financial aspects of the organization,” Aucoin said. Insurance business“Over the last 10-15 years, the advent of enterprise risk management has required organizational leaders to understand both operational and financial risks.
“More importantly, risk managers need to be at the table with financial leaders to consult with management in a timely manner so that management can make important decisions that affect the organization. is that there is
Humble beginnings in insurance
As Vice President of Insurance, Aucoin is responsible for managing Marriott’s global insurance programs, including strategy, negotiation and procurement. Since joining Marriott in 2001, he has coordinated and managed insurance programs for complex global projects.
His start as a personal insurance underwriter is still a long way off. Aucoin, along with Hanover Insurance, created coverage for homeowners and automobiles in Louisiana, which proved to be a difficult area in the years after Hurricane Andrew. However, he believes the training and mentoring from leaders in both the insurance and oil and gas industries gave him a strong foundation in risk management.
“It was while working as an underwriter that I was able to understand how the insurance industry works,” says Aucoin. “I am Marriott and he has been in progressive roles for 22 years. It was his background in personal insurance underwriting that gave him a stepping stone to a career in risk management.”
Aucoin now enjoys the opportunity to learn about the unique risks and cultures of different countries, which makes his work exciting and rewarding. Marriott International’s global system comprises approximately 8,300 properties (1.5 million rooms) in 138 countries and territories, including 500 luxury hotels and resorts.
The hospitality giant said it will add 394 properties in 2022, a 21% year-on-year increase in contract signings. The pace of Marriott International’s development accelerates as the global travel industry recovers from the pandemic. The company said in a release.
“Every day is a new adventure and a new challenge,” he said. “Our team is challenged every day to find new solutions, whether it’s finding insurance or managing risks in different countries because each country is unique. Yes, and the risks are the same.”
“Risk management first, insurance second”
According to Aucoin, especially after events like 9/11, Hurricane Katrina and the COVID-19 pandemic, risk managers have more visibility into the corporate landscape than in years past.
“The scope of risk has changed in many organizations, regardless of industry, and risk managers have had to pivot and change accordingly,” he said.
“This means that I and my team need to be more agile and adapt to changing risk profiles. Risks that were important perhaps 12 or 15 years ago are now being addressed. It’s different than risk.”
For example, reputation risk arises when: Active shooter incident Or cyber-attacks have become more prominent in the commercial real estate space in recent years.In the wake of COVID-19, many companies are adopting a variety of revenue-generating activities that introduce new types of exposure. finally, Climate change and increased extreme weather It’s negatively impacting property insurance, further reducing capacity.
The lack of access to certain types of insurance makes the risk manager’s job more difficult. To strengthen the organization, Aucoin’s approach is to first address exposure through contractual risk management and then through insurance.
“As insurance capacity becomes increasingly scarce and costs rise, risk managers are making trade-off decisions and, in some cases, businesses will need to increase their property and cyber insurance holdings. ‘ he said.
“Insurance may not be available in certain countries, so my organization’s first line of defense is contractual risk management. Insurance is therefore a tool for transferring risk when it becomes available. If you do need to take out insurance, the question is, do you need higher retention or less coverage? These are secondary risks that, as a risk manager, I have to worry about, and maybe a few years ago I didn’t have to.”
Asked about the most significant challenges facing risk managers, Aucoin pointed to the pace at which businesses and their exposures are changing.
“When a company moves at such a fast pace, it’s difficult to analyze issues with minimal information and consult management in a timely manner,” he said. “Risk managers need to understand the company’s risk appetite and proactively consult management with the best available information.
“I always say that a successful risk manager must not only have good analytical and communication skills, but also be willing to take risks. If you make decisions based on what you have done and are unwilling to consult in a timely manner, you are not adding value to your organization.”
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