Delivering a real appreciation of risk

Like many Asia-based risk professionals, Johann de Waal (pictured) is more than a little preoccupied with the task of finding the right people for his business team, which he calls “a lean, mean and very efficient machine”.

“It’s often a challenge to find staff that have the right kind of skill sets for the unique way in which we approach risk,” de Waal says.

“Our pipeline to recruit someone can quite often take up to a year to find the right kind of candidate with the right kind of personality, background and qualifications. And this is regardless of the kind of money we’re talking about.”

Singapore-based de Waal says that this issue is of particular importance to his team, which is “much smaller than you might think”.

“We are probably less than a couple of handful of staff. Maybe it’s because of the way that we work with what we call our business partners, which are really the DPDHL [Deutsche Post DHL] business units,” he explains.

“They take things up to a certain point then we work closely with them, the legal team who we work with on a daily basis, and a team of underwriters based in London.

“In Asia, the claims that we see are less complicated, the frequency is fewer and there are fewer different types than the US, for example, so that is why at the moment we can operate with a relatively small team.”

The man responsible for managing the DPDHL business units of insurance and risk management in Asia says that his risk team’s remit is limited to “insurance, claims around property, damage or loss to clients’ goods, and insurance arrangements for liability that might flow from that”.

“It is around employee benefits, workers’ compensation, vehicles and other assets, but it doesn’t expand to the full umbrella of everything that you would see in the classical equity risk management portfolio,” de Waal explains.

Staff retention

Staff retention is also a particularly pressing issue in the APAC region, de Waal says.

“There’s quite a lot of competition and people hop around between companies; we are all frequently approached by headhunters,” he explains.

“So you have to find the staff then retain them by keeping their jobs interesting enough with enough challenge for them to remain motivated.”

The South-Africa-trained lawyer (who chose to “pursue a more honourable career in insurance”) says that another challenge faced by his team is managing the differing expectations of many international companies operating in the region.

“As business expands globally and more and more companies are relocating to Asia or deciding to open a branch in Asia, many of the overseas companies arrive with a very US-centric view of insurance,” he says.

“So when we negotiate with a client from North America, they will be looking at insurance from a US perspective and many of the things that they would deem as a standard sort of cover – workers’ compensation is an example where they would expect millions of dollars of cover – it’s not necessarily available in this part of the world and it’s not necessary.”

The challenge, de Waal explains, is to make it clear to these organisations that “the way we can arrange insurance and need to do so in Asia is slightly different to what they may be used to”.

“When it comes to insurance, they don’t necessarily appreciate that you usually have to place insurance on a country-by-country basis,” he says.

“There’s no sort of regional or global policy in place to cover risks. We may be able to comply in a number of countries, but in others it’s not possible to comply, so that’s a bit of an education process for those clients.

“You would assume that they would have well educated risk teams but sometimes that’s not the case.”

Changing times

Prior to joining DHL in mid-2011, de Waal was in charge of risk management and insurance at International SOS Worldwide, also headquartered in Singapore. He says that many things have changed during his almost six years in Asia.

“There’s less of a litigious nature here than you would find in other parts of the world, both on claims and insurance, but I have certainly seen that changing in my time here,” he clarifies.

“People are more aware of the fact that they can pursue you for whatever liabilities you may or may not have incurred against them. Some of them fairly so and some of them unfairly so.

“The lucky thing is that we still don’t see too many of the unfair ones, but there’s a steady growth in the awareness of rights and people will pursue claims more frequently than what we would have seen in then past.”

Businesses are also becoming more aware of how they can transfer risks through insurance or other methods, de Waal says. At DHL, that means employing a variety of strategies.

“We try and place whatever risks we accept into our own captive arrangement,” he says.

“At the same time, the various regional risk teams act as what we would call trusted advisers to the various business units, which means we are almost like an external broker.

“They don’t have to talk to us; they don’t even have to place the insurance with us.”

Part of his team’s role clearly involves showing that it can save these units money on their premiums, de Waal says.

“It is also to demonstrate that we understand their business better than an external insurer or broker, and that we can add value to their process of contract review by being more flexible on insurance arrangements,” he adds.