Red Bull is perhaps best known for “giving you wings” by way of its well-known energy drink, which is exactly what Simon Keshishian needs to keep up as the company’s director of risk management. Find out how the CLM fellow came to manage exposures like Flugtag and the Stratos jump, and everything in between.
Why work at Red Bull?
During law school, I interned at a number of different legal jobs. During that time, I realized that I wanted to do something untraditional with my law degree. After a decade of roles of increasing responsibility at P&C insurance companies, I decided that I wanted to take a more proactive role and transferred my experience in claims, litigation management, and legal into a risk management position at UCLA. A couple of years later, I connected with a recruiter at Red Bull who was looking for someone with my background to head up the insurance and risk management team at their U.S. headquarters. I jumped at the opportunity.
What is your day-to-day life like?
Contract reviews are a big part of what my team and I do, which, amongst other things, means getting the most commercially reasonable and balanced insurance, indemnity, and limitation of liability language into our contracts. Claims management and oversight also are a big part of what I do, including the trending of claims data and identification of risks and opportunities. I also am involved with risk and safety management internally and at the numerous events that Red Bull puts on each year, which includes educating and training the business units throughout the enterprise.
How do ERM strategies infiltrate your overall approach to risk management?
My approach to risk management involves a heavy emphasis on pre-claim contract reviews and the utilization of risk transfer/mitigation devices to ensure that the responsible parties with whom we contract “own up” in the event a liability claim is made arising out of their acts and/or work. From my perspective, ERM involves identifying risks and opportunities that are relevant, assessing their impacts on the organization, determining a strategy, and monitoring progress. I try to employ ERM techniques whenever practicable or applicable.
Does the definition of risk management differ for an international company like yours?
The interesting thing I’ve found about managing risk at a global company is how much more proactive we are in how we manage risks in the U.S. It seems that in other parts of the world, simple contracts or handshake agreements are not that uncommon, and, oftentimes, parties to the contract consider each other partners and look for ways to preserve the relationship in the event that a claim arises. I find that in the U.S., we spend a lot of time crafting very detailed language in our contracts that provide specific remedies in case one of the parties breaches its obligations or duties. I can’t count the number of times I’ve had conversations with my colleagues in our global HQ offices where they are left scratching their heads when I explain the types of “creative” claims we are presented with in this part of the world.
Do headline-making events like the Stratos jump represent your biggest exposures?
Safety is Red Bull’s first and primary concern while executing public events such as the Stratos jump, Soap Box, Flugtag, Air Race, Crashed Iced, and X-Fighters (amongst others), especially with respect to its participants and spectators.
Accordingly, you might be surprised to know that some of the less “exciting” activities tied to our core beverage business are actually where we see our claims. By way of example, Red Bull’s core business is tied to the manufacturing and distribution of energy drinks. From a risk management standpoint, our workers’ compensation program as it relates to our distribution business is not unlike the challenges faced by similarly classified distributors, and, in response, we put emphasis on employee preventive safety in the workplace and utilize return to work programs, where available.
There also are challenges with administering an auto liability insurance program with a diverse fleet of drivers throughout the U.S. and Canada, which range from marketing vehicles (with the Red Bull cans on top) to heavier trucks with delivery routes in various markets and driving environments that can include heavy congestion in markets such as Los Angeles to slick and icy roads in the North. We work to trend and benchmark our data by utilizing internal resources, outside consultants, brokers, and insurers to identify risks and opportunities, assess their impacts, and strategize to ultimately minimize or eliminate the risk.