Michael White is the National Investment Management Industry Leader and a Senior Client Advisor in the FI Center of Excellence in Marsh’s FINPRO Practice. He provides risk management solutions for a broad range of financial institutions with a focus on asset managers and investment funds. His responsibilities include program design, brokerage and consultative services on D&O Liability, Fiduciary/Pension Liability, Professional Liability, Cyber, Employment Practices Liability and Fidelity Insurance programs.
What do you see as the greatest risks facing executives?
Heightened regulatory oversight and scrutiny, particularly with regulators focusing more on the performance of individual executives and board members in discharging their duties.
What do you think will be the next emerging executive risk?
While it may be difficult to still categorize cyber and privacy exposures as “emerging”, it is clearly the area in executive risks that is raising the most questions and is experiencing the most changes at the present time. In addition, there is tremendous scrutiny of how individual personal data is protected and the potential impact of data breaches by both regulators and plaintiff’s lawyers alike, two significant sources of claim activity. More regulators at both the federal and state level want to know what is being done to safeguard personal data and information. And where there are breaches, the plaintiffs’ bar is looking for more ways to capitalize upon them.
From your perspective does regulation, litigation, legislation or a combination drive these risks?
While a combination of these elements drives risk, a review of the major corporate crises over the past 20 years reveals that the vast majority of them began with a regulatory review or enforcement action focused on unsavory corporate practices. It is this regulatory activity that has directly led to some of the most significant legislative overhauls and largest corporate litigations that we have seen during this time-span.
Is the insurance industry doing enough to adequately quantify and address these risks?
Yes. The movement towards more holistic operational risk management strategies has taken firm footing in many corporations which, in turn, is driving the industry to take a more proactive approach towards risk. More brokers and carriers are offering services beyond the standard policy-based fare and offer expanded service options designed to identify and minimize risk, including detailed analytical studies, actuarial and consultative services, employee training portals, and advice on risk management best practices. The industry recognizes that it needs to enhance how risk is handled and is actively adjusting the way in which it addresses its clients’ needs.
What keeps you awake at night?
My biggest concern is about keeping pace with the risks posed by evolving technologies. New ways of performing age-old tasks can create exposures never before comprehended. Whether it be data storage in the cloud, high-speed trading, payment by bitcoin, or dark pool securities exchanges, these new advances present new risks and alter existing risks in ways never appreciated. These changes can materially affect what needs to be safe-guarded, how protection is afforded, and the cost of such protection.
