Jim Loucks serves as the managing director of Aon Risk Services Southwest Inc. and is based at the company’s Houston office. He is also the business development leader of the Global Energy Specialty Practice. Loucks has been with Aon since 2001. Prior to joining Aon, he held a similar post at Marsh Inc., and he has also served as a sales and client executive in a broad array of industry disciplines. His experience includes oil and gas, utilities, construction, manufacturing, and technology.
Q. What steps should a company take to determine its risks?
In order to determine their risk, they have to look at their business holistically and they need to come together internally to share with various sectors within their company, beyond the traditional risk managers, such as the chief financial officer, the general counsel and the chief operations officers. They need to bring everyone together and start talking about what risks each one faces. It’s called an enterprise risk management assessment.
Q. How will managing risk help a company’s bottom line?
When a company is optimizing their transfer and risk retention, the results all drop to the bottom line. A sophisticated company will take on as much risk as they can, transfer as little as they can, and nine times out of 10, they will do better by structuring themselves that way. With workers’ compensation, for instance, by creating a safe work environment and understanding where your losses are coming from, you can eliminate some risk. The losses you eliminate will improve your bottom line.
Q. How often should you review your views on risk management?
It’s a 24-7-365 proposition these days. Gone are the days when a company could look at their renewal once a year. As our clients become more sophisticated, they are looking at themselves from an enterprise risk standpoint. They’re making it a living, breathing process, versus a snapshot in time. There’s a lot of fluidity in risk, and risk exposures change frequently.