RM 377 Research Project

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RM 377 Research Project

• Property/Liability Risk Management and Planning

IMPORTANT Game play instructions in
slideshow Final scoring of group projects and
presentations Pat Bonus and attendance points
at risk 3 ( 2 bonus points)
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Format of research presentations

• Day 1 - prepare discuss format, pick up handouts
  in class
• Review the instructions
• Prepare placards - assign roles based on the
  segment(s) researched by that student
• Perform trial run with two groups
• Day 2 thru 4 - team presentations
• Judges select 5 questions
• Advisors (jury)
• document results from your deliberations
• gather signatures of those present
• Presenters conclusions, summary
• Pat Wrap-up

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Your challenge

• Why should the risk manager place the company
  insurance and loss control program with your
  company?
• Answer the questions provided by the judge
• Consider the characteristics of the company
• - Are they a match for the programs you
  write and the markets you target?
• - What concerns do you have about the risks
  this company presents to your underwriters and
  your assets?

4
Insurance Markets - Implications post Katrina

• Who are they (what companies in their "group") -
  also, any mergers, acquisitions, or initiatives
  in past year
• Where are they domiciled - and what countries,
  states do they write in and off-shore activity
  global markets and issues - new market
  initiatives
• What do they write - what lines of business, what
  markets, specialty or traditional, reinsurance or
  primary (or both) withdrawn from any markets,
  any initiatives / new markets - current events
  and changes in rating
• Use of Technology - major in-sourcing or
  outsourcing deals in past 5 years, modeling
  (e.g., catastrophe risk) compliance/regulatory
  tech usage (operational risk mgmt.) IT
  governance issues scope and purpose
• Use of Reinsurance, derivatives, other financial
  devices
• Use of Home Website - e,g., Loss
  Control/Mitigation information, claims
  management, quote/buy, enhance agent interface,
  property valuation functionality, client
  services, other
• Major challenges - legal, regulatory, significant
  events, other (e.g., lawsuits)
• Observations and forecast (how do they manage
  risk? over the past three years, what are the
  trends - if public info available?)

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Research groups

• Montpelier Re Holdings Ltd. - Group 11
• Horace Mann Educators Corp - Group 6
• The Chubb Corporation - Group 9
• RLI Corporation - Group 1
• Fireman's Fund (Allianz) - Group 7
• The Hartford Fire - Group 5
• Mercury General Corporation Group 3
• The Progressive Corporation Group 4
• Safeco Corporation Groups 8 and 10
• St Paul Travelers Group 2

Order of presentation April 28 prep groups
3, 6 May 1 groups 1, 2, and 11 May 3 groups
7, 8 and 10 May 5 groups 9, 5, 4
6
The CEO
7
The CFO
8
The CIO
9
The PR and Legal Departments, the shareholders,
and the owners
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The judges

• Select 4 questions plus Tell me something
  about your company.
• ask these of any of the panelists
• Strategic resource management
• 1. How did your company fare, with the recent
  natural disasters?
• What can you tell me about your reserve
  adjustments and reinsurance
• recoverables discuss your strategies, seen as
  material issues for investors?
• Capital management, exposure management, growth
  management
• 3. How does your company make use of modeling?
• 4. What outsourcing projects have been
  accomplished? Any failures?
• Technology
• 5. How would you describe the information and
  services/functionality of
• your website presence for your customers ?
• 6. How would you describe the information and
  services/functionality of
• your website presence for your shareholders
  ?
• Knowledge of their markets and customers needs
  
• 7. What would you say are the two most
  important things to your customers?
• What new products or services would best serve
  your customers needs?
• Do you provide loss control/risk management
  information and advisory services? How?
• Industry positioning

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Scoring (by category, per group)
Group _______
Excellent (9 - 10)
Unacceptable (1 2)
Adequate (5 6)
Needs Improvement (3 4)
Good (7-8)
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Results
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The prospects risk manager tells you

• AMD has manufacturing facilities in the United
  States, Europe, Japan and Asia, and sales offices
  in major cities around the globe. Founded in 1969
  and based in Sunnyvale, California, AMD had
  revenues of approximately 3.5 billion in 2003. A
  truly global company, AMD derives more than half
  of its revenues from international markets.
  Shares of the company trade on the New York Stock
  Exchange under the symbol AMD.
• The risk management officer works in Austin for
  Bob Rivet - Executive Vice President and Chief
  Financial Officer

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During the interview you discover about the
Prospective client / shareholder

• Challenges of AMD
• Highly competitive industry
• There is cutthroat competition in the
  microprocessor market
• Lawsuit against competitor Intel for predatory
  pricing in non-US markets
• Initiative with Sun, HP and IBM to better manage
  power and temperature in data centers
  http//thegreengrid.org/
• Combative local environmental group
• Spread of risk, general info, financials (10-k)
• Geographically California, Texas are major bases
  
• Manufacturing world-wide (Fab 64 in Germany)
• Supply chain dependencies world-wide
• Compliant with EU directive on chemicals
• (RoHS Directive) - Restriction of the use of
  certain Hazardous Substances (esp. info on lead
  Pb and Electronics)
• Interests
• Competitive risk management program, advising
• Long-term capabilities of broker and companies
• Legal tangles and environmental initiatives in
  Austin, TX (consolidated campus)
• see online movie at http//lonestar.amd.com/global
  /video/AMDaustinSM.mov
• See SOS cartoon at http//www.sosalliancemedia.org
  /AMDcartoon.htm

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