Champion for ERM: Society of Actuaries board member pioneers new credential in his spare time

Risk & Insurance, Sept 15, 2008 by Erin Gazica

Ever meet an individual who finds he can't be completely satisfied with breaking new ground at his day job? He's got to take on a trade association and move mountains there too? Maybe even create a brand new insurance designation, the association's first in 60 years?

Look no further. S. Michael McLaughlin fits the description to a tee. A principal in the Actuarial & Insurance Solutions division at Deloitte who's taken on enterprise risk management (ERM) as his pet project with his clients is also known for being an active volunteer at the Society of Actuaries who pioneered the first new credential since the organization's founding, the Chartered Enterprise Risk Analyst.

Let's start with the day job. Dale Hall, vice president and chief actuary for the life and health operations at COUNTRY Financial, was a client of McLaughlin's consulting team who needed help.

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Hall said he began realizing over time that the company had a silted approach to risk management. Business as usual with the company's silted programs may not have been that dire of a situation, but Hall said he knew they were probably creating exposures or making business decisions that weren't particularly savvy.

"Had we not engaged Mike and his team at Deloitte we would have a very stagnant risk management program," Hall said. "Because of the discussions with Mike our company stands much better prepared and educated and diligently mitigates and monitors the corporate risks that we face. He's really given us the education and tools and in turn COUNTRY is a much smoother operation because of the concepts that he's brought to the table."

According to Hall, McLaughlin's consulting work helped put into perspective for its senior management and board of directors the importance of the company's workforce.

"Put yourself in our CEO's shoes," said Hall. "Clearly, they know how important our employees are, but until we had this process we tended to be a little too focused on financial assets and financial liabilities. We started to really take into account the intangible assets we don't see listed as stocks and bonds on the balance sheet."

For another client, McLaughlin was instrumental in the creation of a spreadsheet-based quantification process for a Midwestern multiline insurer which harnessed techniques from outside the insurance industry to improve the assessment and quantification of key risks. The project spanned across both the life insurance and property and casualty operations of the company, which had not been considered before. In this way, the company was quickly able to quantify their risks across the entire enterprise.

But when McLaughlin leaves the doors of Deloitte, the gears are always moving in his brain, trying to conceive of new ideas that he can share with his peers. In 2007, he played an integral role in developing the CERA credential, which in a year's time has been earned by 200 actuaries and others outside the actuarial profession.

"He's just a champion of education all around, whether to actuaries or the business world in general," said Hall, a fellow SOA member who has attained the CERA credential. "He, more than anyone, is the vocal champion of that cause, committed to it 100 percent, not willing to let it just fall by the wayside."

This friend and colleague praised McLaughlin's ability to take an idea and apply it to everything from a financial institution to a hospital, airline or government authority. He's innovative and forward-thinking, Hall said, and that helps any entity apply ERM concepts.

"I'm sure over time there's been stumbling blocks, challenges, but Mike is a doer. He persists and pushes things along and among his peers he clearly stands out as the best."