Inside Risk: Gary Nesbit, Advance Auto Parts
Gary Nesbit, director of risk at Advance Auto Parts and CLM fellow since 2011, shares his approach to risk management, the challenges he faces, external influences that affect his job, and more.
By Eric Gilkey
Managing risk for a growing company with more than 3,600 locations and 52,000 team members is no small task. Gary Nesbit, director of risk at Advance Auto Parts and CLM fellow since 2011, shares his approach to risk management, the challenges he faces, external influences that affect his job, and more.
Q. How did you come to work in risk management?
A. My career started in loss prevention with The St. Paul Companies, and my last 10 years there was as the director of risk management services for national accounts, national programs, and surplus lines.
After that, I became the risk manager for a national restaurant company with 36,000 employees, where I was responsible for all employee health, welfare, and retirement programs.
From there I became the risk manager for Belk Inc., where I rebuilt the risk management staff in order to develop an integrated approach to risk management.
Two years ago, I transitioned to director of risk for Advance Auto Parts, where I’m working to further integrate risk management as a proactive service for all of our business units.
Q. What is your overall approach to risk management?
A. An effective risk management program is built on strong support from senior management who cares about their team members and customers. Along with management’s support, the risk management team needs to leverage relationships and partnerships internally and externally.
Effective risk management programs are built on the concept of being best in class and developing individual team members within the company. Risk managers need to consistently demonstrate to each business partner that they are there to help their operations achieve their goals with less cost, disruptions, and injuries.
For the injured team member and customer, we are there to help them recover and to treat them fairly. Another key role is to select and manage external business partners that enhance the company’s risk management efforts.
Ongoing education and involvement with professional organizations are critical to being effective. During my career, I have earned many designations—all of which have been very beneficial to me.
Q. Describe some of the challenges you’ve faced.
A. One of the first challenges I had was determining whether or not to implement a captive insurance program. Though we ultimately decided not to, the experience as a whole was a great opportunity to conduct an objective analysis and build relationships throughout the company.
Another challenge is effectively communicating safety practices and behaviors. As with any organization, there is always competition for the attention of our many team members.
Q. What outside influences affect your job?
A. Currently, the main external factors include changes to the excess insurance market, specifically the excess property insurance markets. We are seeing indications that insurance carriers are seeking to increase rates in 2012 due to prior year losses and limited investment income. Obviously, any increase in rates directly impacts our costs adversely.
The consolidation of third party claims administrators also impacts a risk manager’s options in this area. The concern is not just cost competition; competition also helps drive quality improvements.
Q. What kinds of claims do you typically encounter?
A. As a retailer with the 18th largest fleet, our losses are related to material handling; slips, trips, and falls; and motor vehicle collisions, along with periodic property losses. However, our main priority is to help train and educate team members to identify and correct hazards before an injury or collision happens.
We do this through our safety program referred to as “LIFE”: Lead with compassion and by example; Investigate and report accidents; Fix the hazard; and Educate team members to know how to prevent accidents and collisions.
Q. How many claims adjusters work for you?
A. We have 12 dedicated workers’ compensation adjusters and five dedicated liability adjusters with Sedgwick. We also partner with our internal warranty team to handle product-related issues.
Q. How do you define success in your job?
A. The objective measures of success often focus on reducing injury/collision frequency rates, reducing the ultimate loss projections, and the total cost of risk.
However, there are other “measurements” to consider. Are our injured team members and their families getting the care they need? Are we helping them return to work safely and to a productive life? Are our injured customers being treated fairly and honestly?
Personally, success is defined as being able to do what I have a passion for and being able to help others on my team be successful.