Tradeshow Floor: Insurance Gnomes Unite!

Bob Horkovich has been coming to RIMS for almost 20 years, since 1989 to be precise, and he has never seen it like this. Horkovich, the New York-based attorney who heads the insurance recovery group for Anderson Kill & Olick, PC, said he senses from talking to risk managers that they are getting a whiff of an opportunity that they have never had before.

The opportunity is coming in the guise of the adjustments that have occurred in the financial sector over the past seven months as the mortgage-backed securities and some of the other investments bundles crafted by Wall Street’s whiz kids have turned into financial hand grenades: hand grenades with Super Glue on them.

Call them mentally leaden, call them arrogant, but the residents of some of this country’s C-suites are finally looking at their corporate phone directories and realizing that they have someone who has been on their payroll all along who can actually help them avoid getting their hands blown off, financially speaking of course: it’s called a risk manager.

“All these financial geniuses out of Wharton and the Harvard Business School, how did they get themselves into all this trouble? Wasn’t there somebody who could have warned them not to do this and then ‘Bingo, oh gee, this is risk. We’ve got somebody in our company who is responsible for risk,’” said Horkovich, his eyes bugging.

Horkovich said that callousness to reality and to being able to find it within one’s three-piece-suited self to seek the advice of someone who you’re actually paying to help you avoid losses is breaking up this year more than it ever has previously. And risk managers, a dour, overworked, troubled lot if their countenances as they roam around the San Diego Convention Center are any indication, are feeling a tinge of something unusual in their chests, and it’s not the after-effects of Tuesday’s Aon-sponsored wine and cheese party: It’s called hope.

“I have been doing RIMS since 1989 but this is the first time I really get a sense from the risk managers that there is a real potential here for them here to play a significant role within a corporation,” said Horkovich.

Previously, according to Horkovich, risk managers were shuffled off to dingy corners and treated as “insurance gnomes”. That is, one whose sole purpose in life is to buy more coverage cheaper than they did the year before.

“I’ve seen over the years the risk managers unfortunately put in the position where companies are chiefly concerned with paying less premium for more coverage and not even really that concerned about getting claims paid. No risk manager that I’ve ever known ever got promoted because a claim was paid or a claim was denied,” said Horkovich, as, visibly conference weary, he balanced a tall cup of the ever-present Starbucks on his knee on the showroom floor on Wednesday noonish.

Speaking of the exhibition floor, Horkovich said he noticed something else at RIMS this year that was different. He said more and more, the risk managers that attend the conference and the booths that populate the exhibition space are concerned with risk-avoidance techniques and processes and not so much the purchase of insurance.

“Just walking around I’ve seen a lot fewer major booths for insurance companies.”