Page 1 Recording of this session via any media type is strictly prohibited. Page 1 Selling Your Risk Management Program to Senior Management Tuesday, April 29, 2014 WHAT WE NEED! 1.A good idea. 2.The ability to sell that idea.

Page 2 Recording of this session via any media type is strictly prohibited. DAVID T. CARLSON, US Manufacturing & Automotive Industry Practice Leader, Marsh Joined in Responsible for building and growing the practice and ensuring consistent delivery nationally of Marsh’s industry-leading products and solutions to manufacturing and automotive clients. SCOTT BELLACK, Workforce Strategies Practice Central Zone Leader, Marsh Risk Consulting Joined in Provides loss prevention solutions and leverages his corporate risk management experience to provide risk management function optimization services.

Page 3 Recording of this session via any media type is strictly prohibited. What to Expect Better understanding of the structures and relationships key to a respected and value-added risk management function. Strategies for building the trust of senior management to get the risk management program investment required. How to create opportunities from your risk management program.

Page 4 Recording of this session via any media type is strictly prohibited. What It’s All About Why Care? To become a “trusted advisor”. To gain a seat at the table. To be included, UP FRONT, in the decision making process. Ultimately… to accomplish your own goals and objectives.

Page 5 Recording of this session via any media type is strictly prohibited. Why Bother Doing What Is Uncomfortable? Why Gain Senior Leadership Support? “The power of the purse”. Shrinking buying power of middle-management, with senior leadership making more of the financial decisions. Without senior leadership support, your initiatives will be doomed from the start. You may see “pockets” of success, but will never fully realize maximum return on investment of your goals and objectives without “C-suite” support.

Page 6 Recording of this session via any media type is strictly prohibited. Why Bother Doing What Is Uncomfortable? What Challenges May You Face? You will be exposing yourself to people who could affect your career. They can be impatient, brusque, and blunt. Keeping their attention. Your idea probably means more to you and a lot less to them. They can ask you questions outside your area of expertise (e.g., financial impacts).

Page 7 Recording of this session via any media type is strictly prohibited. A good idea The ability to sell that idea What You Need Only Two Things Are Necessary 1 2

Page 8 Recording of this session via any media type is strictly prohibited. Keys to Success How Do You Make Your Initiatives Important? Align your goals with senior leadership’s goals and those of the firm. Identify internal/external champions. Focus on results… but talk process. Be concise… but know the details inside and out. Prepare… prepare some more… and then over prepare. Allow them to make the decision… “that’s a great idea!” Focus on risk opportunities and not just threats. Deliver sustainable results!

Page 9 Recording of this session via any media type is strictly prohibited. You must create VALUE. Insurance may be viewed as a commodity… risk management is a process! Help senior leadership recognize the NEED for change. Remember that risk management is usually a small piece of the puzzle. Align your efforts with those of the organization. Risk management annual report can articulate your value to and alignment with the firm… and senior leadership. Align Your Goals With Senior Leadership’s Goals If It’s Important to Them, It Is Important to You!

Page 10 Recording of this session via any media type is strictly prohibited. Learn From Those That Have the Ear of Senior Leadership What Makes Senior Leadership Tick? We may not always get invited to the corner offices or the top floor. Identify “champions” and understand how they got the invite. Work to assist champions in their efforts. Leverage champions where you can. Leverage your manager’s relationships… make your manager look good.

Page 11 Recording of this session via any media type is strictly prohibited. Focus on Results, But Talk Process What Will Be the Fruits of Your Labor? It will be all about the numbers ($) at the end, but to get there you must have meaningful activities. Have your endgame firmly in mind. Build your case based on PROCESS. Provide your planned ACTIVITIES. Measure progress toward your goals through activities and show your results at meaningful intervals.

Page 12 Recording of this session via any media type is strictly prohibited. Use a pyramid approach – “don’t tell them how to build the watch”. Tell the time. Be prepared to show some of the watch’s functions. Show how to build the watch… but only if asked. Use “facts” to limit your temptation. Place a note on top of the memo/plan/report. Forces you to be focused and concise. Can you deliver the “elevator speech”? Will you create “value”? Avoid using jargon. Bottom Line Themes, Key Points Details, Data, Evidence Be Concise Time = Money

Page 13 Recording of this session via any media type is strictly prohibited. Being prepared will help you be concise. Know the facts, data, and statistics inside and out, but don’t share them unless asked. Rehearse and refine your “elevator speech”. Plan Prepare Practice Prepare… Prepare Some More… Then Over Prepare!

Page 14 Recording of this session via any media type is strictly prohibited. Identify Options and Alternatives for Implementation If It’s Their Idea, They Will Support It! Only have the ONE idea. Automatically position against management. Too much of an “all or nothing” scenario. You will be defending your plan the entire time. Present THREE options or alternatives. Better chance for dialogue. Collaboration and agreement will start to take shape. Advantages and disadvantage can be discussed. Side-by-side comparisons can be made. Be prepared for other ideas or variations of your ideas to appear. Allows for leadership’s valuable input… and assistance. Helps in “making the idea theirs”… skin in the game!

Page 15 Recording of this session via any media type is strictly prohibited. Business “Opportunities” to Consider Help Generate Opportunities as Well as Mitigate Risk Risk management is not just about negatives, i.e., risk mitigation and reducing risk to an acceptable level. Risk management can position a company positively. Is there a product line or a service that the company is shying away from due to a possible misinterpretation of risk. How does risk management protect the balance sheet? Return revenue to the bottom line… reserve and collateral management. You must spend money to make money. Example: An aggressive claim closure initiative will have upfront costs, however the long-term savings will be significant in many areas of the business.

Page 16 Recording of this session via any media type is strictly prohibited. Deliver Results! Gain Trust and Continuously Improve Ensure a collaborative relationships exist. Deliver on ALL of your promises. Stay focused and organized. Keep senior leadership informed. Identify the best way to communicate progress. Set the stage for consistent communication. Keep communications simple and meaningful. Always assess “what’s next” and be ready to start the process all over again from the top. But this time, you will be a “trusted advisor”.

Page 17 Recording of this session via any media type is strictly prohibited. DAVID T. CARLSON US Manufacturing & Automotive Industry Practice Leader Marsh (216) Public Sq. Cleveland, OH SCOTT BELLACK Workforce Strategies Practice Leader Central Zone Marsh Risk Consulting (216) Public Sq. Cleveland, OH Questions, Final Comments, and Contact Information This document and any recommendations, analysis, or advice provided by Marsh (collectively, the “Marsh Analysis”) are not intended to be taken as advice regarding any individual situation and should not be relied upon as such. This document contains proprietary, confidential information of Marsh and may not be shared with any third party, including other insurance producers, without Marsh’s prior written consent. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modeling, analytics, or projections are subject to inherent uncertainty, and the Marsh Analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Except as may be set forth in an agreement between you and Marsh, Marsh shall have no obligation to update the Marsh Analysis and shall have no liability to you or any other party with regard to the Marsh Analysis or to any services provided by a third party to you or Marsh. Marsh makes no representation or warranty concerning the application of policy wordings or the financial condition or solvency of insurers or reinsurers. Marsh makes no assurances regarding the availability, cost, or terms of insurance coverage. Marsh is one of the Marsh & McLennan Companies, together with Guy Carpenter, Mercer, and Oliver Wyman. Copyright 2014 Marsh LLC. All rights reserved. MA