Three Key Tips to Optimizing a Contractor’s Risk Management Function
Every single day we encounter uncertainty that stems from risk.
We constantly come across countless activities that have the potential for
undesirable consequences. There are varying level of risks. One area where risk
is consistently high is in the construction industry – mainly on project sites.
Several factors can jeopardize a multi-million-dollar construction project, so the
risk on a project must be well-managed. Not only can risk management help avoid
unwanted outcomes, but it also has the potential to streamline operations,
improve safety, and boost project confidence as well as profit.
Risk
Managers are a key component of the construction industry as they assess,
control, and monitor the possible hazards of a project. In a recent interview
with Peter Kapler, Senior Vice-President and National Director of Performance
Security at AON, he states that “Risk Managers can play a vital role as an
information and knowledge hub.” By doing so, they can beneficially serve the
overall enterprise at a construction company. During our sit-down with Peter,
he shared three tips on how contractors can optimize their risk management
function:
1. Breaking Down Silos
2. Leveraging Data
3. Empowering Your Risk Management Team
Breaking Down Silos
A
Contractor’s Risk Management team sits in a unique position as they have the
ability to make connections between Operations, C-Suite, and external insurance
carriers. Risk Managers serve as a knowledge hub because they have access to several
sources of information – their internal risk data, and guidance from industry
sources such as RIMs and IRMI, and benchmarked data and Risk Engineering
insights from their Carriers. By
utilizing Carrier input, Risk Managers can provide insights into managing risk
better; however, this is only possible if the silos within an organization are
broken down and better connectivity established between Risk Management, Operations,
and the C Suite.
Leveraging Data
Another
way Contractors can help optimize their Risk Management function is by
leveraging data. What does this mean? To harness data into something
meaningful. According to Peter Kapler, there are several pools of data available
within a construction company’s ecosystem; if this data is not appropriately
pooled and linked together, there is a missed opportunity for the discovery of
the true cost of risk. Data can help Risk Managers make intelligent decisions
on how to price risk - it is important that the data is evaluated and used
efficiently and effectively. Integrating this data across Operations, Finance,
and Risk Management can improve the overall enterprise of the construction
project; however, this cannot be effective if the data is appropriately linked
together.
Empowering Your Risk Management Team
The third
tip Peter shared with us on optimizing a contractor’s risk management function
is to empower the risk management team. If Risk Managers develop internal
relationships and build alliances within Operations, they will have an easier
time delivering important risk information. When a solid relationship with the
operational team exists, Risk Managers can also influence the C-Suite by
providing comprehensive data that significantly affects the contractor’s
profitability and well-being.
In conclusion, is important that silos within an organization are broken down, so a vested Risk Management team can effectively communicate important data and information to operations, C-Suite, and external Insurers. By breaking down silos, leveraging data, and empowering the risk management team, a construction company will see an improvement in their enterprise. An entire organization can benefit from the wealth of knowledge risk managers possess about both the marketplace and its organization. If you would like to learn more about what Peter Kapler has to say, listen to our podcast, 3 Key Tips to Optimizing a Contractor’s Risk Management Function.
Links:
Connect with Peter on LinkedIn
Follow AON on LinkedIn
Visit AON on the web here
Email Peter at peter.kapler@aon.ca
Connect with Peter Duggan
Connect with Mike Diercksen
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