Inside Risk with Bellagio's Alonzo Johnson
The CLM Fellow spends his days in several Las Vegas casinos, but that doesn’t mean he likes to gamble when it comes to risk.
By Eric Gilkey
CLM Fellow Alonzo Johnson spends his days in several Las Vegas casinos, but that doesn’t mean he likes to gamble. As director of risk management for MGM’s Bellagio and Monte Carlo resorts, his days are filled making sure the city’s famous slogan remains true. Learn about his approach to risk management, a few unique claims he has encountered, and the power of an apology.
Q. How did you end up in your current position?
A. The foundation of my insurance career began in Michigan in 1994 with Accident Fund Insurance Co. of America, where my focus was on workers’ compensation. During the 14 years I worked there, I expanded my knowledge into the areas of premium auditing, claims, and financial operations.
In 2007, I relocated from Michigan to Las Vegas to lead the risk management division of Veolia Transportation. After a few years, I joined Frias Management as corporate risk manager. In this role, I spearheaded the in-house claims management as well as the legal unit, which handled auto liability. In 2012, I wanted the challenge of learning a new industry and, thus, became director of risk management for two MGM Resorts International properties: Bellagio and Monte Carlo. The hospitality industry was a new and exciting change for me.
Q. What is your day-to-day work life like?
A. Like others in my field, there is no typical day. Each day can be different. I manage very large properties, and risk must be managed for every component of hotel operations. On a daily basis, I review claims or incidents, interact with guests, coordinate with management, and review various contract agreements and COI documents. Other days, I may be in training sessions, walking property, participating in staff meetings, or attending a hearing.
Q. What is your approach to risk management?
A. Risk management should be weaved and threaded into every aspect of operations and supported by all management levels throughout the enterprise. In my industry, especially for a Five-Diamond-rated resort, risk management is approached from a holistic viewpoint. Claims and overall risk management cannot be handled from an adversarial or even a wait-and-see approach. Guest excellence is paramount within our properties, and expectations are always at the peak. This starts from the moment of reserving a guest room and extends to dining, shopping, and, yes, even claims handing.
There is a lot of apologizing for the experience that a guest encounters. This is in no way an admission to liability, but apologies go a long way with customers. We express our empathy and concern and we move toward resolution. For us, it comes down to customer satisfaction and, even when there seems to be an interruption to a guest’s stay, we want them to feel cared for so they will return for a future visit.
Q. Does the definition of risk management carry a different meaning in a casino?
A. In general, risk management involves identifying, analyzing, and mitigating situations that may have an adverse effect on the business. For the most part, this is the same in any enterprise. However, I would say that in my industry, one key aspect to risk management is the protection of the brand and the reputation. Reputational risk management cannot be compromised by any means, even when it comes to claims management. As an internal key support division of the company, my department is tasked with the balancing of responding and resolving guest claims while at the same time providing the customer service aspects. We understand that our guests might have an unfortunate experience, but how we respond and interact as a company contributes to our reputation. It’s our brand and who we are. Some may argue that the role of a risk management department may not be seen as a glaring revenue-generating department; however, the process of claims resolution at times will return a guest. Return customers mean increased revenue for the company.
Q. Describe some of the other risks you manage.
A. Hotel/casino-type claims can be unique, but not unusual from other industries. We are exposed to the typical slip and falls, fleet vehicular accidents, food-borne allegations, environmental, property loss, and security-related matters. Slip and falls are ranked in the top.
Q. What is your favorite Vegas attraction?
A. The Fountains of Bellagio is by far the best experience. People dance, not water? Wrong. These fountains dance better than I do, but to be fair, I can’t dance. Nevertheless, if you have not visited the fountains, then you have not been to Vegas. They are situated across an 8.5-acre lake filled with 22 million gallons of water and have canons that shoot water 460 feet into the air. During certain seasons, high winds can cause a few sprinkles to fall on the crowd. Guess which department will get that phone call?