City risk managers are feeling the pinch as they wrestle with budget crises and Occupy movements. Memphis’ Risk Manager and CLM Member Sandra Burgess describes her approach to handling these and other risk-related issues.
Q. When did you start working for the city of Memphis?
A. I began working for the city in 1997 as a risk management analyst, and I became the risk manager for Memphis in the months prior to 9/11. So you can imagine that was a bit of a nightmare. That was also around the time that the city was informed we were on the New Madrid fault line, which affected our ability to purchase earthquake coverage. Coverage that we had purchased in the past was no longer affordable. However, through research—which is something risk managers often do—we found ways to work around it.
Q. Was risk management a conscious career choice?
A. I graduated from the University of Memphis after having majored in insurance risk management, so for me it was a choice.
After graduating, I worked at Nationwide Insurance first as a commercial underwriter, then in commercial claims. Handling claims, you have to put yourself in the claimant’s shoes—be empathetic, sympathetic, and understand what they’re going through. You can’t simply accept, reject, or modify as you would in underwriting.
I feel like my background really helped me for what I’m doing today.
Q. What is your overall approach to risk management?
A. My overall approach to risk management is based on one key: communication. Communication is essential, and for me that means having a good relationship with different divisions, directors, and managers so we are able to work together effectively and efficiently.
For example, our fire division called me about having students ride in a fire truck with them. They didn’t really like what I had to say, which was that we typically shy away from that kind of risk. But we kept talking and worked through it with the assistance of our legal department by having a waiver drawn up and signed by the students. We both were able to compromise and get what we wanted.
I received this advice from a seasoned risk manager years ago, and it has stuck with me: Don’t just tell people what they cannot do. Give them the pros and cons, and work with them to help them make their own decision. When you approach issues like this, people are inclined to keep working with you, not against you, which keeps you informed and builds a better working relationship.
Q. What's it like to be the risk manager for a major metropolitan area?
A. It’s a tough job but I love what I do. If you’re looking for applause, though, you may want to look at other jobs.
The city of Memphis owns approximately $2 billion in property, which is spread throughout the city and includes buildings like city hall, fire and police training academies, libraries, fire stations, public works buildings, pumping stations, and more. Property is the largest insurance coverage we purchase. When insurance costs escalate, we have to get creative. Increasing our property deductible is one way we can reduce the cost of insurance.
Our property policy provides us with a $1 billion occurrence limit with no aggregate. No matter how often losses occur, there will always remain a $1 billion limit. This limit may be used if a catastrophic loss occurs.
Q. What kinds of claims do you typically see?
A. Claims are handled through the Government Tort Liability Act. Typical claims that come to mind are auto liability and general liability—basic slip and falls, potholes, injuries on playgrounds, swimming pools, wrongful property demolition, and civil rights claims, to name a few.
Q. Memphis is one of many cities with an Occupy movement. Has this affected any risk decisions?
A. The Occupy Memphis movement is relatively small compared to other larger cities, and so far there have been no problems. Our mayor allows the protest as long as it’s peaceful. However, one of my major concerns for occupiers is safety on public property. Things can happen, and what if it escalates? There could be some claims that arise.
I recently read that one of our occupiers had climbed a utility pole. What if he fell? I will have to keep monitoring the situation to make sure nothing gets out of line or nothing occurs that I’m not aware of. It is the city of Memphis’ property being “occupied,” so I want to make sure that whatever happens, we don’t have occupiers hurt, citizens wounded, or city employees injured. I’m concerned about everyone’s safety.