Inside Risk: Laura Cornish, Honeywell
Laura Cornish, director-risk management for Honeywell and CLM claims management advisory board member, opens up about her company's risks, essential partnerships, and risk-related successes.
By Eric Gilkey
As a Fortune 100 company with 120,000 employees and $36 billion in annual sales across almost every country, Honeywell is one of the most respected companies in the world. The reputation was further polished when it was also rated as one of the most ethical in 2012. Laura Cornish, director-risk management for Honeywell and CLM claims management advisory board member, opens up about the risks the company faces, the partnerships that make it happen, and her own risk-related successes.
Q. Tell me about your career in risk management.
A. I joined Liberty Mutual right out of college, progressing through the claims world with companies like AIG and J&H/Marsh before joining Tyco’s risk management team as the director of claims. Several years later I joined Colgate-Palmolive’s risk management team, where I placed workers’ comp, auto, general liability, and excess programs while also handling claims. After three years, I decided to move to Honeywell.
Q. How did a background in claims help you manage risk?
A. Having a claims background is an invaluable tool because as an adjuster you need to know how the coverage applies, or doesn’t, in a vast variety of situations. So when I’m placing a policy, I actually know what I’m buying. I think my background made me stronger from the placement or underwriting perspective, and it also helped me understand the risk.
Q. What exposures do you fear the most?
A. Our biggest exposure—what keeps us up at night—is supply chain risk. The largest potential losses from an insurance perspective that we’ve seen in the last few years have all been on the contingent business interruption side.
We have some of the world’s finest loss prevention programs and a sophisticated global event tracking system, if a loss occurs. But when you talk about your partners, you really can’t control that. For instance, we had a vendor that sustained a serious flood loss, which left us potentially facing a multi- million loss. But with a huge team effort between the Honeywell business and the vendor, we were able to get the vendor back up and running, find alternative sources, and mitigated the loss to a couple million dollars.
Q. Honeywell is listed as one of the most ethical companies in 2012 by Ethisphere. How does that translate to risk management?
A. I think that one of the great things that Honeywell provides from a risk management perspective, which goes along with strong corporate governance, is transparency. All of our annual operating plan numbers are placed on our corporate risk management website, along with all of our premium allocations. It’s our philosophy that we want to make sure everyone understands what the numbers and charges are, and I think it’s a great thing to do.
Q. What types of claims do you manage?
A. We’re a household name, and in over 100 million homes and businesses, but we run very few liability claims on an annual basis—less than 600 claims. Despite this, I spend most of my time on product liability claims to ensure the Honeywell brand is protected, as well as on global property losses. I am also responsible for oversight of our UK and Irish employer’s liability claims. Being a global manufacturer and an acquisitive company over the years, we have a vast array of legacy claims programs and we are routinely integrating insurance programs and claims data into our programs and RMIS systems and managing the run-off claims.
Q. Do you have a risk-related success that you’re proud of?
A. Because we have well over 100 legacy companies, we manage a huge portfolio of claims and policies. In trying to easily track and manage our total cost of risk, we recently transitioned to Aon’s RiskConsole system, which allows us to take in claims, policy, premiums and other data for all of our current and legacy entities into one database. It also has an online claims system that we can use across the enterprise. It’s a tool we can use globally that captures the total cost of risk.
Q. How do you staff for claims?
A. We have one person who handles day-to-day claims management on the liability side, and we utilize Sedgwick as the TPA for our current U.S. program. They supply us with three adjusters and a supervisor who are dedicated to our liability claims. We’ve worked with them for four years now, and I think they are an excellent partner. While we don’t run many claims in a year, we wanted them to all be in one office because we wanted to have them know us, know our products and who are key partners are, and the go-to people to streamline that process. It’s been an evolving process but it is tailored to our claims philosophy.