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Welcome to the site for the SMU Insurance Council in the Cox School of Business
On March 24, 2010 risk management takes center stage in a discussion that features Art Kirchoffer, Executive Director of Risk Management for AT&T, and Raymond Alletto, Vice-President - Risk Management for United Rentals. Their talk, "Risk Management in M&A: Due Diligence and the Changing Face of Risk after an Acquisition," will give attendees and Cox students a perspective of both how these leaders conduct risk management within their existing firms and how they adopt their risk management approaches to externalities that arise such as an acquisition. The council is grateful for the sponsorship of the Dallas-Fort Worth chapter of the Risk and Insurance Management Society for this special event. Please click HERE to register for this event.
About the speakers
 Art Kirchoffer is Executive Director of Risk Management for AT&T. Prior to the AT&T acquisition of BellSouth in 2006, Mr. Kirchoffer held the position of Executive Director of Risk Management for BellSouth and held various positions within finance and IT at BellSouth. In his current role, Art is responsible for all P&C risk management activities for AT&T worldwide, including directing the activities of its captive insurance subsidiaries.
Art is a former member and past chairman of the Board of Trustees of Educational Foundation, Inc. of the Department of Risk Management and Insurance at Georgia State University and a former trustee for the Georgia Self-Insurers Guaranty Trust Fund. Art has also served on risk management advisory boards for ACE Bermuda and Zurich.
Art began his career at BellSouth as a computer programmer in 1979 after graduating from West Georgia College with a degree in mathematics. He earned an MBA from the executive program at Georgia State University in 2001.
 In his capacity as Vice President of Risk Management for United Rentals, Inc., Raymond J. Alletto is responsible for Claims and Litigation Management, Insurance/Risk Finance, Environmental, Health and Safety; Benefits Finance, Corporate Security and Records Management.
Mr. Alletto's career has spanned the manufacturing, telecommunications, and pharmaceutical industries. Mr. Alletto began his risk management career in 1982 as product litigation manager for the Bridgeport Machines Division of Textron, in Bridgeport, Connecticut. In 1987, he joined Hubbell Incorporated, and for the next twelve years maintained worldwide responsibility for property and casualty risk exposures, risk financing and insurance, insured litigation and claims, and employee benefits administration.
In 1998, Mr. Alletto joined GTE Corporation in Stamford in conjunction with their relocation to Dallas, Texas. In addition to risk management duties, he led the cross functional merger integration team, to unify the risk management departments of GTE and Bell Atlantic, which became Verizon. For two years after the merger, he developed and managed a standalone risk management function for GTE's internet subsidiary, Genuity, in Woburn, Massachusetts. In 2002, Mr. Alletto returned to Connecticut to join Purdue Pharma, LP in Stamford, Connecticut as Director of Risk Management.
He holds the ARM and CIC designations and has been an active member of RIMS over the years, serving on numerous committees at the national level. He has been a member and chairman of the Manufacturers' Alliance Risk Management Council, various industry advisory boards and the editorial board of Risk Management Magazine.
An Update on October meeting
 On Thursday, October 1st the Council had the pleasure of a hearing Ramani Ayer, Chairman and CEO of The Hartford. The timing of the event was special because Mr. Ayer had just retired from The Hartford the day before, having been replaced by Liam McGee. Mr. Ayer, who studied operations research applications to chemical engineering in his Ph.D. studies, had led The Hartford since 1997 and managed the company through the financial crisis of 2008. He spoke directly about the problems at AIG. He noted that while AIG's parent suffered that their insurance subsidiaries were strong prior to being called on to contribute capital to the parent when credit default swaps caused problems.
His predictions for the future were of interest. Mr. Ayer noted that he expects that executive compensation at insurance companies will be adjusted downward and will be better linked to an insurer's long-term goals rather than short-term performance. He talked at length about the insurance cycle and forecasts that the market will harden in the second or third quarter of 2010; however, he clearly understood that market participants may be reluctant to raise pricing for fear of being first-movers that catch the ire of their brokers and customers. Perhaps most importantly for the students in attendance, Mr. Ayer spoke passionately about the opportunity and diversity of careers in the insurance industry.
An Update on May meeting
 On Thursday, May 7th the Council heard remarks from Ravin Jesuthasan, Managing Principal of Towers Perrin, who spoke on managing the risks of a workforce. Mr. Jesuthasan's presentation discussed the importance of properly constructed incentive compensation plans and he presented survey evidence on the disconnection between the importance of non-management employees and their lack of understanding about what drives their business value. A component of his presentation and the discussion that followed was how management can effectively drive their employees toward long-term performance. The key appears to be short-term targeted incentives such as cash, consistent with achieving long-term goals.
An Update on the launch of the new RMI major
 On March 19, 2009 the Cox School of Business launched the new major in risk management and insurance (RMI) with nearly 160 attendees from the risk management and insurance communities in a luncheon event that featured LoriAnn Lowery, President of Lloyds, North America. With an interactive, detailed and nimble-minded presentation Ms. Lowery touched on her beginnings in El Paso, Texas as the daughter of a 6th generation Texan father and a Lebanese mother to become one of Business Insurance magazine's "Women to Watch - 2008." Ms. Lowery, a double-major in vocal performance and finance at the University of Texas, discussed the need for Lloyds to be "adaptable" in today's global insurance marketplace, her predicted forthcoming rate rise in property and liability insurance markets, and the implications for insurance and financial services which arose from the most recent World Economic Forum in Davos.
An Update on the Fall 2008 Events
On October 2, 2008 the fall meeting of the SMU Insurance Council featured Arthur Lowry who is the president of global risk management and insurance for ExxonMobil corporation. Mr. Lowry gave attendees (including Cox undergraduates) significant insight into ExxonMobil’s risk management plan and was followed by a lively question and answer session. Mr. Lowry’s discussion began with predictions for the global energy demand through 2030 and ExxonMobil’s view of the contributions of various energy supply sources. We learned that while a portion of the business risk confronted by ExxonMobil can be mitigated though their sheer size, ExxonMobil takes a systematic approach to risk management. According to Mr. Lowry, “true risk management is an embedded feature of day-to-day business line management.”
The essence of the ExxonMobil approach is to hedge risk at the corporate level and purchase catastrophic insurance only as necessary often with the ability to dictate terms and pricing to the insurers that offer their services. At the affiliate level, ExxonMobil provides financing through a captive (named “Ancon”) that has built a surplus while taking Affiliate risk above sizeable Affiliate retentions.
New Web Site Resources
There are two new items of interest. First, we have updated the content within the research tab for a new research paper by Cox professors Sree Bhaskaran and Bob Puelz that focuses on effective claims handling when certain economic incentives are considered. They develop a theory and test it with actual claim experience from insurers that report their data to the Texas Department of Insurance.
The second item to note is the new tab labeled, “Scholarship Support.” One of the goals of the Insurance Council and its members is to assist the build out of student interest and a curriculum in risk management and insurance. The Carter scholarship and the PIA of Dallas scholarship are current endowments whose income will help students that focus on these studies. The more exciting news is new scholarship support is expected to be announced later in the fall 2008. More information will follow at the appropriate time. If you know of individuals or firms that want to make a direct financial impact on helping risk management and insurance grow at Cox then please send an email to Professor Bob Puelz. |
An Update on Spring 2008 Events
April was a busy month for the risk management and insurance community at the Cox School of Business. On April 8th we inaugurated our first lecture series, entitled the “RIMS Lecture Series,” which was sponsored by the Dallas-Fort Worth chapter of the Risk and Insurance Management Society. The event had over 90 registrants including many students and corporate risk managers.
 The speaker, Bob Hamman of SCA Promotions, spoke on the topic of risk and probability vis-à-vis his business model. SCA is the #1 marketer of promotional high limit prize programs in the world, and Bob is primarily responsible for determining the odds associated with the promotions the company covers, as well as developing mathematical models used to rate risks. SCA has assumed the prize risks for prizes such as Golf Hole in One, High Limit Casino Games, a world record attempt in The Calaveras County Jumping Frog Contest, growing a 1000 pound pumpkin in time for Halloween and is the only company to have arranged for billion dollar prize risk coverage. Interested readers can download a copy of Bob’s presentation here. |
 On April 10th, the SMU Insurance Council hosted their spring lecture and reception which featured Howard Mills, chief advisor for the Insurance Industry Group at Deloitte LLP. We were pleased that we had over 100 registrants for this event. Mills talk entitled, “The State of the Insurance Industry, PC and Life” was an open discussion format in which Mr. Mills shared his insights into the unique nature of terrorism risk and why the federal government has to be involved, and his view that Treasury Secretary’s Paulson proposal to have some insurance regulation at the federal level to be a significant turning point toward the outlook for the future insurance environment. Mr. Mills took a number of questions and developed a theme during the meeting that the insurance industry must develop and harvest new talent. As we know, a view consistent with an objective of the Insurance Council to promote risk management and insurance careers to Cox students. |
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