URMIA Matters
URMIA Matters
Challenges Facing Higher Education
In this episode of URMIA Matters, host Julie Groves is joined by Frank Cella and Matt Miller of Marsh to explore the evolving risk landscape in higher education. The discussion dives into demographic shifts, cybersecurity threats, regulatory changes, and the growing complexity of compliance. They also examine financial sustainability, employment practices, liability, the impact of AI on institutions, and the “role of the risk manager.” With insights on enterprise risk management, creative risk financing, and strategies for building resilience, this conversation offers practical guidance for risk managers navigating today’s “new normal.”
Show Notes
Guests
- Frank Cella, Managing Director, Education Industry Leader - Marsh
- Matt Miller, Senior Vice President, Placement Specialist Education Market - Marsh
Host
- Julie Groves, Director of Risk Services - Wake Forest University
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Michelle Smith: [00:00:00] Welcome to Season 7 of URMIA Matters, a podcast about higher education, risk management, and insurance. Whether you are an URMIA member or supporter. Thanks for listening. Let's jump in.
Julie Groves: Hi everyone. I'm Julie Groves, Director of Risk Services at Wake Forest University. I'll be your host for this episode of URMIA Matters. Joining me are Frank Cella, Managing Director and Education Industry Leader at Marsh, and Matt Miller, Senior Vice President in Education Placement, also at Marsh. Today we're gonna be talking about navigating the new normal, which is a recent white paper drafted by Marsh. Some of the things we're gonna cover are demographic shifts, cybersecurity, increased litigation, climate control, regulatory pressure, and other things that higher ed managers have [00:01:00] experienced, and what we can do to address these challenges.
It should be a really interesting discussion. So, before we start, I'm gonna ask each of you to introduce yourself, talk a little bit about your career journey. And tell us what your average day looks like. Now, I know that we don't all, we like to think we have an average day, and we come in and we think we have a plan for our day, and then that doesn't happen. But maybe tell us what your ideal average day would look like in the office and not on vacation. So, Matt, why don't we start with you?
Matthew Miller: Yeah. All right. Thanks Julia. Appreciate it. Happy to be here. Yeah. Matt Miller. So, how, how did I get here? I think it's like at least 50% of the people who, who work in, in the insurance industry did not come here looking for insurance. They kind of like came through a different pathway and then ended up like, oh, I'm decent at the insurance thing. Maybe I'll, I'll try that out. So, I was in at a university for several decades, I would say a [00:02:00] midsize private university in, in Michigan and started out actually in public safety. And worked in that for a, a number of years, and then somebody at some point decided, you know, insurance probably right around the time I got my master's degree. I don't know why they thought I knew insurance, but they did and they progressively just handed me more and more pieces of the insurance until I was essentially the buyer for the university, with the exception of the employee health processes and benefits on that side.
Did that for a while as risk manager and then took on was taking on a lot of the legal processes as well, and told my employer that if you help send me to law school, I'll, I'll do in-house counsel for you on the back end. So, just before COVID, graduated from law school, was in-house legal counsel at the start of COVID. Kind of did a lot of things, all things COVID. Uh, it was tons of fun as anyone who was in the industry at the time remembers. And then after that decided, yeah, let's, let's see if there's [00:03:00] something else out there besides this. And then jumped over to Marsh. And I had been involved with Marsh before that in a number of capacities. I was a part of one of the consortium programs as one of the, one of the schools, very familiar, uh, and was excited to kind of come over and, and see what the world was like on this side of the house. So.
Julie Groves: Well, great. Well, thank you for being on the podcast today and you know, for many of us, Frank needs no introduction. But for those of you who don't know Frank, why don't you go ahead and share a bit about yourself?
Frank Cella: Insurance is my life. I shall not want. I have been with Marsh 30 years. Effective January 1st, I just got a note from leadership saying Congratulations, and we'll give you a little bit of money in like the second paycheck, just so that they, my acknowledgement. So, 30 years, I really had no intention of going to insurance. I grew up in the industry. I wanted to go into fashion. I had a great job offer with Ralph Lauren when I graduated from school, but they said in three years I had to move to New York and I said, I'm not leaving Chicago. I am [00:04:00] going to stay here. And they said then do not go into fashion, go into insurance, do what your dad does. So, I went into insurance begrudgingly. Three years later I was living in New York. So, I've lived all over the world.
I have almost always worked with consortia type programs or pools and education. So, my entire career at Marsh has been in what we call the affinity space. Originally, alumni working with alumni associations. Back in the day before we had computers. Selling insurance to the mail, to the alumni of Wake Forest University. And that role transitioned really because of a project I did on behalf of the University of California, which was really around their student organizations, which led me to meeting Jean Demchak, who at the time led Marsh's education practice.
And my first URMIA conference was in Colorado in 2007. And I have been an active member and just absolutely love this industry. So, a perfect day for me is really where I have spoken with a client who is dealing [00:05:00] with. A challenge and I am able to come up with a solution either from the toolbox we have within the company, or from the resources that we have across URMIA or other professional associations. I love the problem solving aspect. And you know what? There's never a boring day in education. And so, typically, if I get a call, you know, in the morning, something else will happen in the afternoon and it'll be completely different and it's always interesting. So, delighted to be here and thank you.
Julie Groves: Well, Ralph Lauren's loss is certainly our gain. And I know that you are looked upon as the knowledge of everything fashion wise at Marsh, and so maybe in a little way you're fulfilling your fashion needs through your current employer. So.
Frank Cella: It's when I started showing up at work wearing an ascot that they asked me to go home.
Julie Groves: They were jealous, is what it was, or they didn't know what that was. So, because
Matthew Miller: I have no idea what an ascot is. So.
Julie Groves: There. Point. Exactly my point. And if you, for those of you that don't know Frank, I think I [00:06:00] can say, I know I can say this now since I have it on very good authority that Frank is the most dapper dressed Marsh employee. So. Moving away from fashion.
Why don't we jump into our subject? So, between the three of us, we have all been in the higher education space for many years. Frank just told us he's been in it for 30. I've been in it for almost 27, so we're old. And, you know, a lot of things have happened. A lot of things have come and gone and, you know, we've always come out on the other side okay. But today's environment might feel a little bit different for folks. So, what are your thoughts on how all this is playing out from a risk management perspective in higher education?
Frank Cella: Well, I think I'll start and I'm going to take a risk, a traditional risk management perspective, and then I'm gonna turn it over to Matt to speak more on the compliance side because he really brings an interesting lens with his legal background. And, you know, there's a lot of noise going on in the industry right now. A lot, whenever there's a change in administrations, there's [00:07:00] always a lot of changes at the Department of Education. And that catches this all up in a tizzy as we try and keep up with that. Under the Obama administration, it was really a big focus on Title IX. Under the Trump administration, it's a big focus on Title VI, so I'll let Matt handle those issues.
But you know, big picture. You know, administration agnostic, if you will. I really feel that the challenges that we're seeing are really around financial and enrollment, sustainability, and in particular with our small private colleges and a lot of our community colleges. Honestly, cybersecurity data, data privacy, and tech disruption. Even though we've done such a great job since 2019 as an industry in mitigating a lot of the risks around cyber, because of the type of data that we hold on our servers and who we represent, whether it's a medical or a research institution, or whether we're dealing with alumni, there's a lot of good data that bad people want.
And so, that's a [00:08:00] constant challenge, and in particular, I think COVID really highlighted this, but you know, it was already obviously going on well before, but student wellbeing, safety, and social license to operate. I mean, we've got so many challenges on our campuses and it's, you know, not just our students, it's our faculty, it's our staff, and it's our community members. So, to me, those are sort of the three biggest challenges that I see from an overall risk perspective. I didn't bring in anything related to property, and I can do that later. But Matt, I'm gonna turn to you for a compliance perspective.
Matthew Miller: Yeah. On the compliance side, regulatory, legal, it's hard to overstate the amount of change that's happening, and I think to a certain extent, that is a symptom of kind of what's happening on a, a larger cultural scale in our, in our society. And for better or worse, higher education as a whole, [00:09:00] at this point in kind of the arc of education within the United States is very much tied to how things are functioning at a societal level, but then also what's happening in the federal government level because so much of our funding flows through that channel.
And so, when we, you know, Frank mentioned kinda agnostic about the, uh, the administrations, but the reality is, is when administrations change, no matter which side, there's just so much change that's gonna happen at that, at that particular juncture. And there's really, because we take so much funding from there, they get to tell us kinda, hey, you're gonna do X, Y, or Z. And when there's an admin, an administration change, it's gonna flip a lot. So, when we're looking at kind of the, when we look through like the last 40 years or more of kind of history in terms of regulation and compliance as it relates to higher ed. Yeah, I think if people were working like 2010, 15, you know, that that timeframe, you would've looked at [00:10:00] what you had to deal with compliance and regulation like on the Title IX side, and you would've said, man, there's just so much going on right now.
Then I think now we, from today, we look back then and say like, man, I wish we could be 2015 again. But I think that's a, uh, it kind of speaks to the fact that for a significant period of time, 30, 40 years, we really all kind of played from the same playbook as it relates to regulation and compliance and, you know, what the federal government was looking at and how, how they were approaching us. And that's really been all upended in the last two or three years from like the federal courts. Uh, Chevron deference, essentially going away the SFFA, and affirmative action, being overturned in terms of admissions processes.
So, like the deference that the administrative agencies, the Department of Education used to have within the courts of, you know, we're gonna, department of Education, comes out and says, we're gonna approach Title IX or Title VI or whatever, you know, regulatory framework. [00:11:00] We're gonna approach it from this perspective and this is how we're going to do that for this the next foreseeable future. There really was no ability for the courts to come in and say, yeah, we're not, you know, we don't like how you're approaching that. We're gonna make that change. That's not the case anymore.
You know, Chevron's gone, that deference is gone and now we have the APA and Skidmore and, and that framework that they're, they're functioning under. And, and how is that gonna play out with the various rules, changes that are coming down and all of the rules that have been in place before. I don't think any, your guess is as good as mine. Right. We're starting to see some in, in indications and a lot of those indications are that a lot of those things are up in the air. So. That's very new for us as an industry for decades, that has not been the framework we've worked under. So, it does feel different, for sure.
Julie Groves: Definitely, and you've kind of covered a few of these, but what are some of the top risks you're seeing now? Obviously, government funding is [00:12:00] one of them, cyber is another one. What are some other risks that you are seeing kind of rise to the top?
Frank Cella: Well, I think given a lot of the challenges and in particular for our D1 and R1 schools that have been very much impacted by some of these changes with the Department of Education, we have seen somewhere around 10% reduction in force. And some of that also has to do around the initiatives respo associated with diversity, equity, and inclusion. So, you know, these are individuals that may have lost their jobs after having done nothing wrong that wasn't performance based. And you know, right or wrong, they tend to then turn around and sue for wrongful termination. So, we've got a pretty significant uptick in employment practices liability, and that's just sort of the nature of the beast. And I don't know that there's anything that our universities can do other than make certain that they're being very thoughtful in approaching [00:13:00] reduction in force and that they're making certain that it's fair and equitable across the board. 'Cause that's a real challenge for us as an industry, and I think it's gonna continue to be one.
You know, another risk that is hopefully short term, but there's been a significant impact on our foreign students. And you know, you talk about reputational risk, everything affects reputation. But right now, the thought of sending your child from a country to the United States may not be the same feeling that it would've been 10 years ago, and that's created a lot of angst. Parents that wanna come to a graduation ceremony that might be afraid to do so that they might be pulled out of line at the airport. So, you know, there are challenges there that we also see. And I think, you know, when we take a look from a legislative perspective or from a, you know, these lawsuits and things that we're dealing with, you know, think about the house versus the NCAA settlement. And the potential impact that's going to be having on our division [00:14:00] one, two, and three institutions. And you know, that is going to be a great unknown and everyone's still, you know, at this point trying to wrap their arms around what impact is this gonna have on our entire enterprise?
Which to me then leads into why enterprise risk management is so incredibly important. And of course, that's one of the tenets of URMIA is in making certain that our universities are embracing enterprise risk management. Because you know, whether it's the changes that Matt's making reference to, or the things that I've been talking to, all of these impact your risk registry. And those can change on a frequent basis, and someone's gotta manage that process in making certain that leadership is being kept apprised. And most importantly, that the board is being kept apprised because I don't think board members understands sometimes how quickly things evolve in education. Matt, I don't know if you wanna add anything to that.
Matthew Miller: Yeah, I mean, touched on a lot of, a lot of good, good topics there. I, you know, if I had to pick one thing that I thought was kinda the biggest risk factor facing education, [00:15:00] higher education specifically right now, I would say it's the demographic switch, cliff, whatever you wanna call it. Coupled with kind of the, the erosion of societal trust or view of higher education, you know, for whatever reason, whatever that the cause of that is. I think those two things coupled together, I think. A lot of the other pieces that we would talk about are in some ways symptom, symptomatic of, of that larger piece that's gonna become more and more troubling, uh, the sector. So, the one that I think is the hardest to solve a, because either the babies were born or not back in 2008 to, you know, 2018.
And then on, on the other side of it, it is just, you know, 15 years ago. I think society as a whole had a, had a view of higher education that has in some ways been eroded now. And I don't know, [00:16:00] I, and I think it's been eroded, not due to any malfeasance on the part of higher education. Don't hear that from what I'm saying. I think some of it is because of what I mentioned before, which is like this coupling with federal funding and like how the processes function in that, that perspective. And so, I, it kind of viewed in the lens of like, you know, one size fits all, which I think is not, not helpful for higher education generally, but those are some hard pieces to kind of solve, you know, how, how are we gonna kind of regain some of that trust from certain segments of society? And how are we going to address, especially for like this, the midsize and smaller schools that are very enrollment driven? How are we going to address and, and prepare for those demographic shifts that are, that are coming?
Julie Groves: And when you speak about these demographic shifts, are you also including in that the demographic shifts of the older workers who are [00:17:00] rolling out like Frank and I soon, not soon, but in a few years. Might be heading off after we win our lottery. But you know, obviously we have a workforce that is, you know, a lot of real knowledge, institutional knowledge and otherwise is getting to the point where they're ready to, uh, go onto their next chapter of their lives. And so, are you all seeing that as a big issue as well? That we have this huge demographic shift of the seasoned workers are moving out and the younger workers who are great, but they don't have the same knowledge and experience are coming in?
Frank Cella: Definitely, anecdotally, I'm seeing a huge demographic shift of, you know, so many of my contemporaries are retiring. I will say from where I sit, I'm very encouraged by the young people that I work with on a day-to-day basis, and very fortunate to be surrounded by a lot of talent, and that that excites me. And I certainly notice that when we take a look at the newcomers at URMIA and I see how enthusiastic they are and how willing they are to [00:18:00] embrace, I think.
We're also looking at demographics where a lot of people are gonna end up working a lot later than maybe 65. And so, the idea of retirement is beginning to change, and that's a good thing and a bad thing. I mean, it's a good thing in that it provides those of us that don't wanna necessarily retire right at 65, an opportunity to continue to contribute, but that also then holds off, allowing that space to open up for someone who might be younger. And I can see that being as a little bit of a challenge.
You know, we talked a little bit about cybersecurity, but I'm gonna add one more component to this, and this kind of ties into the demographic shift. The ability to embrace technology and to see the changes. I mean, I have been at Marsh, you know, the day that they handed me my first cell phone, or the day they put a computer on my desk where the internet was a white bar. And I'm like, okay, what do I do with this? To the introduction of a fax machine, thinking that that's gonna change the world. And you know, I mentioned earlier in the, in my earlier my career, everything was done through direct mail. Nothing is done through direct [00:19:00] mail anymore.
So, the ability to embrace technology, so AI is gonna have a huge impact on our institutions. And I just spoke at a conference last week and I heard a session on AI that I was so intrigued with, and one of the comments that was made for those of us in the corporate environment, so I'm not gonna just say Marsh, but just in the corporate environment, that we're 10 to 20 years necess potentially behind where these young folks that are coming into college and out of college with respect to the, how they use AI, and embrace it, and look at technology as a way of managing their, their lives. And I think on the education side, we in the universities are really struggling with how do we bring these students onto our campuses?
And then how do we assist them as they sort of begin to dummy themselves down to adjust to our processes, our bureaucracies, our lack of embracing technology? [00:20:00] And I just thought that was a fascinating conversation. So, I think AI is gonna have a lot of challenges for us, but I'm very bullish on the impact that will have. And for those of us that are older, I think it's extremely important to keep up with technology.
Julie Groves: Was your first Marsh phone, was it a bag phone, your first cell phone?
Frank Cella: I just remember it was so large, I couldn't carry it in a briefcase, and it had a big
Julie Groves: Antenna?
Frank Cella: What are the, antennas? And honestly, they, they barely worked. I don't know why they gave them to us.
Julie Groves: They were like upgraded walkie talkies. Right? Like if you were like in the next room to somebody, you could talk to them.
Frank Cella: Well, I mean, honestly, I mean we go back and look at the cartoon, the Jetsons, and you know, as kids watching that thought, okay, this is never gonna happen. It's getting here.
Julie Groves: It has, it has, it really has.
Matthew Miller: Yeah, I think it. One thing I'd add if I can just on the AI piece, 'cause I think that like, I'm so glad you mentioned that, Frank, 'cause I think it's something that is an evolving risk and an evolving opportunity, 'cause I do think it's a, a great opportunity. But I also [00:21:00] think when you think about this from like a demographics perspective. There was a lot of talk this summer about the effect on the graduating class of 2025 on their ability to find some of these open entry level roles. And there's a lot of talk about, you know, the effect of AI on that in terms of like the improved productivity for existing workers, and it's the impact on employers bringing on kind of these younger folks that are just starting out.
And it's gonna be interesting to see how that plays out, 'cause I, as well, I'm bullish on, on AI and I think there's a lot of really good opportunities there. But I also think there's a lot of risk associated with how higher education is preparing students for those roles and then what roles those are going to be. I think that there's gonna be, I think, a lot of change in that over the next three to five years.
Julie Groves: So, you know, we, as we've covered, we're all three [00:22:00] seasoned risk managers. And also, as we've covered, you know, you come into your office on a day, and you think you have your day laid out for you, and then that totally changes. So, if you think about all that's going on, all of these priorities we've talked about and the things that you're seeing rise to the top. Do you have any suggestions for how the risk managers who are listening to this can go about trying to prioritize how they deal with these situations? I mean, obviously sometimes that's just putting out a fire, but are there more creative ways that you can help folks think through how to prioritize these things?
Frank Cella: Well, I think again, enterprise risk management is so incredibly important. And, you know, identifying what those risks are as of a specific date, and recognizing who owns those risks. And then as risks continue to evolve. Maybe do a quarterly refresh where you take a look at, you know, what's happened in the first quarter of, of 2025 and what impact is this gonna have on my [00:23:00] institution, potentially long term. Now sometimes we don't have a luxury. Sometimes something comes down like NIL, and you know, you're sitting there going, okay, this is gonna have an immediate impact on my or my institution. What do I need to implement? But there too, we have the Enterprise Risk Management Committee where you can sit and say, okay, who's gonna own this risk?
You know, what are the risks associated with, what's the role of risk management? What's the role of general counsel? What's the role of our C-suite? What's the role of our athletics director? And sort of identify, so following that same process, so I think at least annually, looking at that risk registry, potentially quarterly. And then of course, in, if you will, crisis type situation. If you find out on a Monday that we're cutting your revenue stream from research for two by 200,000 or 2 million or whatever the number is, that's gonna have an immediate impact. So, you have to go and look at, you know, across the enterprise who, you know, red, yellow, green, who's gonna be impacted, and then what can we do about that?
Julie Groves: Yeah. So, you, you [00:24:00] mentioned that updating your risk register, you've talked about really wanting to make sure that institutions really have a robust ERM program that they're trying to do something to let their boards know what's going on. Some of the other things mentioned in your white paper are creative risk financing. So, can you talk a little bit about that?
Frank Cella: So, I've gotta, careful here when we talk about the industry as a whole, but when we look at the challenges that we've had, we are as close to the 1980s as we ever have been. And in the 1980s, our colleges lost access to the directors and officers insurance marketplace for a lot of reasons. But primarily from an auditor's perspective, taking a look at or an actuary's perspective, taking a look at the Vietnam War protests that were taking place in the 1970s, and the protests that were taking place in our college campuses around apartheid in South Africa. These were creating underwriting risks that the, the marketplace didn't know how to address.
Well, today [00:25:00] we're dealing with sexual molestation and abuse claims that have been going on since, really, since 2011, and they continue to be a challenge both on the athletic side, as well as within our medical centers. Now, that's been a real challenge for us as an industry. And traumatic brain injury and CT related to athletics. So, at some point, my concern is that we may lose access to some of that coverage. And we certainly have seen a reduction in capacity and very few carriers that wanna play in this space because of that actuarial analysis of it's kind of hard for an insurance company to make money. So, then what do we do?
And for those carriers that are thankfully still in the business and still supporting the industry, we also know that the fewer there are, there's less of a spread of risk and the rates are going to continue to go up. And if rates are gonna continue to go up, our boards are gonna turn to us and say, okay, I just paid a X percent rate increase this year. What are you telling me is gonna happen next year? And if the answer is, well, there's gonna be another rate increase, probably very similar to this, the board's gonna turn and say, [00:26:00] okay, and what are you doing to mitigate that?
So, where I take a look at alternative risk transfer is really by first starting with analytics and using the data that we have, which we never had in the 1980s. We've got amazing data right now where we can take a look at our institution's actual profile and say, how efficient is my premium in the marketplace? And if I were to change the way my program is structured, whether that means taking on a higher retention, lower limits, or higher limits, maybe it's doing a quota share. Or do I take a look at alternative risks such as a captive cell, a captive, or what we call our alternative risk transfer, which is actually, if you will, of a virtual captive.
And these are solutions that I would, you know, our larger institutions probably have a stronger balance sheet to implement, and I really think it's a strategy in conjunction with ERM, that we look at over a, a three to five year period. You know, first year, kind of get an understanding of what it is, make sure your data and analytics are up to date. [00:27:00] Second year, it's really, okay, let's get a quote. Let's see how financially feasible this is. Third year, it's okay. We kind of know what we want to do. We can begin to implement a change in our program structure and implement, implement that year three or four. So, there are a lot of opportunities. But it is for those with the stronger balance sheets, I really am concerned about some of our smaller institutions and the options that they have with respect to insurance transfer, 'cause their cost is gonna continue to go up.
Julie Groves: Mm-hmm. Another thing that you mentioned in your white paper is leaning in on the role of the risk manager. So, as a risk manager, can you expound on that a little bit?
Frank Cella: So, I think, again, COVID was probably the best example, and I could not be more proud of our industry and how well, and we used the term back then pivot. Well, we pivoted and I think it was an opportunity for so many of our risk managers to get access to a C-suite in a way that they never [00:28:00] had potentially before, and really became a driving force in the strategic discussions of, you know, how do we take, get our students from our study abroad programs back to the United States before the border is shut down?
What do we do about our residential housing? How do we know that our students are safe? How are we testing the environment? You know, take a look at University of Illinois. They came up with a saliva test, so there was a lot of innovation going on. Risk management played a significant role in all of that. And as we have come outta COVID and we begin to deal with the emerging risks that we are now, just from a compliance perspective. As Matt's been talking, going from Title IX to Title VI, the risk managers are the ones that are key to making certain that whatever best practices or good practices are around those risks are that those are being implemented across the enterprise.
Now we look for example, at name, image, and likeness. You get a young student who's gonna suddenly be making $15, $20 million, or whatever the. [00:29:00] And their athletic director comes to you with a contract. If a risk manager is not reviewing that contract along with general counsel, that gives me a little angst. So, the role of risk manager in my mind has never been stronger. Matt, I don't know if you wanna add to that.
Matthew Miller: Yeah, 100%. And it's never been. And, you know, I maybe put it a little differently. It's never been more critical, crucial for like, the proper functioning of a university's kind of administrative processes. Uh, and I'll, I'll say this, you know, having been a risk manager for, you know, a couple decades, you know, enterprise risk management, like the talk of it kind of came about, really took on, uh, gravitas in the early two thousands, like 2010 ish forward. I think there's probably a not insignificant number of schools, smaller schools, maybe even mid-size, where risk manager is still looked at as a person.
And so, like enterprise risk management for them is like, well, what does that mean? Your [00:30:00] risk management process is you have a person who's doing that and that's how you think risk management's happening. It's it like your institution needs to lean into it more. Uh, because the idea that one person now, or even just one department, is gonna be able to address the issues across, like everything that's happening within education right now, it's just not, not effectively. That, you know, and, and I say all that to say enterprise risk management at its core, at its the key aspect there is the relationships that that risk manager and risk management are building across the institution.
And you know, COVID is a great example of like an acute response. For risk management, but the schools that did COVID best were the ones who had at least implemented those relationship processes within the departments at their institution before COVID happened. So, [00:31:00] they weren't like, oh, COVID happened, and now I've gotta like figure out how to get all the right people from all the different areas together. Like, let's talk and play nice and like what are your main concerns or what are my main concerns? Let's work through all those things. That all, like all of that work needs to happen before the acute issue or there's too many other things playing in to how that functions and it's just not gonna function as well as it could.
So, the role of the risk manager, from my perspective, is like the relationship person in chief at an institution. I don't know. Like they really need to have good, strong relationships across all of the different, as we like to call it, silos. That when, when you've got an issue with name, image, and likeness or something within athletics, you know, hey, I can call up my athletic director, and, and talk with them and, you know, we've got a good relationship and he understands me. He or she understands me, and, and, and I understand them and we can talk through the issues from a collegial perspective. And, and we both know we want the [00:32:00] best in interest of the institution and each other, uh, at heart there. That work can't happen in the immediacy of an acute issue that needs to happen continuously throughout. So.
Julie Groves: Well, and to your point, if you are looking at the risk manager as the, you know, relationship ma maker and keeper that person can then really assist in creating a culture of continuous improvement. And you kind of talk about that in your, in your white paper. And so, you know what happens when you're, you meet resistance to people in a college who aren't really interested in ERM? They don't feel like, you know, they're, I've been in higher ed for a long time and there's a big, if it's not broken, why do we need to fix it? Right? This, like, we've always done it this way, so why do we need to change? And so sometimes when you're trying to champion a culture of continuous improvement, you come up against people who are resistant to what [00:33:00] might be a change for them. So, how do you, what are your suggestions for dealing with that?
Frank Cella: I'll use cyber as an example. So, in 2019 when the cyber market turned, and at the time we had two carriers, AIG and Beasley that were kind of the only two that were writing in higher education, and we began to start to see non-renewals. A lot of that was around the lack of controls that education had had not adopted. And so many of our board members came from corporations where MFA, as an example, was very much a part of our culture for decades, and education was very reticent to change. And they kept saying, you know, what I would hear is our faculty, our staff are never gonna accept it. I heard our students are never gonna accept it. It adds an additional burden to access. We wanna be an open environment.
When the carriers pulled the plug and said, we're not gonna insure you anymore. Suddenly the purse strings opened and all of those risk mitigation factors were [00:34:00] put into place. And we've done a great job as an industry. We now have like around 35 carriers that will work in the cyber insurance marketplace within education. So, we've made a lot of good work. That's where, and Marsh hates when I use this phrase, we use our evil powers for good. We turn and say, okay then you're just not gonna get insurance if you don't. So, that's one way to do it.
The second way I think is really, you know, when we take a look at enterprise risk management, looking at is more of that ownership. Getting your colleagues to understand that this is a risk that they're responsible for, and making them feel like they have some empowerment around that risk. I said that, you know, using your evil powers for good.
Julie Groves: Yes, yes.
Frank Cella: When you pull the plug on insurance, suddenly, everybody's gotta do something. And if we're not gonna have insurance someday, the risk managers are the ones that are controlling, hopefully, the ERM process. And making certain that those across the enterprise that own those risks are gonna make certain that they're doing the best things that they can [00:35:00] to implement good practices And that really all falls underneath our duty of care. So, let's use mental health as a perfect example, making certain that we're identifying when a student isn't connecting properly and what can we do to help that student. And so, it's really, I think, a matter of engagement. And the more that our folks are engaged in the, and again, I keep saying enterprise risk management process.
I don't care what the committee looks like, it's just more that folks understand that, hey, this is my responsibility and I can make an impact on this and that this is going to eventually go up to the board and the board's gonna be able to say, we're doing a good job. They have faith in our leadership.
Julie Groves: And I heard someone say once that ERM really stands for everyone is a risk manager. To your point, Frank, you know, people need to take responsibility and take ownership of those things that they can take ownership. Matt, were you gonna say something?
Matthew Miller: Yeah, I was just gonna add a little bit on my experience as a risk manager. Probably was a little bit unique [00:36:00] in that we didn't really have a risk manager before I took over the role at my institution. Uh, more of like came outta crisis management and like public safety leadership. And at the time it was decided, well, risk management would probably be a good, good role, but that kind of had me stepping into a role that didn't exist, and nobody really understood the importance or what, what, like what are we doing?
Like why is this something that's needed? And the way I approached it from there, and I, and I think it was useful, and I think would be useful for others is kind of the same way you look to do like change management, you know, like really effective communication of why is this important, not just for me, but for you, right? Like what's the end goal? What's the end state that we're trying to get to? I really communicate that effectively.
But then secondarily, I think it's also important for a risk manager to go to these institutional partners and say like, get to know them and their pain points. Like what is causing you concern? What do you stay up at night worrying about like, how can I help you? Like what are the [00:37:00] wins that I can do? Like we can work together right now on, and maybe it's not a huge project, maybe it's a couple of small wins that can start to build that institutional trust and the trust between the two colleagues of, you know, this risk manager came to me, and, and then, you know, getting anything out of it. They're just helping me solve my problems.
And I think that goes a long way to starting to break down some of those barriers in people's minds of. I don't, I don't need another friend, right? I just need to get my work done. I have too much on my plate already. I just, you come in and you're helping them solve their problems and get their work done. They're, they're gonna want to be a part of helping you with those other things.
Frank Cella: It's like as a risk manager saying, you know, I wanna rebrand myself as enterprise risk and resilience because that's really where we're moving toward. And you know that, that the ERM process is really key to the strategy, and, and the budgeting process. You know, in other words, dialogues that bring [00:38:00] it up to the C-suite where they can wrap their arms around and go, this makes sense. This is something I can communicate to the board, and the board is gonna understand and this is gonna make us better on a go forward basis.
Julie Groves: I mean, I think we could probably continue talking about this all afternoon because it's just been very interesting and helpful. Do you have any other suggestions for things that folks should be thinking about as they think through just the environment, we're in and all the risks that are sort of rising to the top?
Frank Cella: You know, it's a little old school, Julie, but I think tabletop exercises, whether it's around a controversial speaker coming out to campus, whether it's a cyber event, but really getting everybody that that we would touch that exercise in a room and sitting down and walking through what is the communication flow? What are our grounds folks supposed to be doing? You know, what is everybody's role? So that they're all clear and I think they have a lot more buy-in because those are the types act of activities that quite honestly are in the news quite a bit. Matt, I dunno if you want to add something to that. [00:39:00]
Matthew Miller: No, tabletops exercises are great. And it, it kind of builds all those relationship pieces in a way that it's kind of fun. Really. I mean, it's like a scenario. You get people together, you buy 'em lunch, whatever, and, and, hey, let's talk about X, Y, or Z and what would happen in your area, what would happen in my area? You kinda get to know the other person how they think and what their approach would be in different circumstances and the same coming back the other way with you. And you know, it's just, it's really, it's a great way, if you haven't already gotten a bunch of people together, it's a great way to kind of break the ice and start that process.
Frank Cella: And also, I think, you know, invest in your own upskilling. You know, getting engaged with URMIA, get engaged with NACUBO, get engaged with the Stetson Law Conference or NACUA depending on, you know, look at those opportunities where, you know. Julie, I loved it when you were president and you said, you know, I'm a department of one, but you are not alone. I cannot tell you how often I sit down with a change in leadership at a university that's been a client that suddenly is saying, I don't know where [00:40:00] to go. I don't know what to do, who should I talk to? And we are such a collaborative group, which is so nice, and I just feel that those are real opportunities for all of us to continue and hone in our skill sets.
Julie Groves: Yeah, definitely. I mean it, this is a really collaborative industry. And so, you shouldn't feel like you have nowhere to turn, especially if you're involved in URMIA. There are resources there, there are relationships there with lots of different folks who have resources who can help. And speaking of one resource, your white paper, we are going to link, put a link to the white paper in our show notes for this episode.
So, again. Thank you so much. I think coming out of this, my only hope is that maybe they're gonna have an NIL for risk manager some day. Do you think that'll be possible? We could have little action figures and little trading cards. I think that would be awesome. However, until then. And I can sign my $15 million NIL contract. I'm just gonna keep on trying to be friends with everybody [00:41:00] and just try to help people realize that they have responsibilities too. So, thank you both so much for being here. It's been very interesting conversation. And this wraps another episode of URMIA Matters.
Narrator: You've been listening to URMIA Matters. You can find more information about URMIA at www.urmia.org. For more information about this episode, check out the show notes available to URMIA members in the URMIA Network Library.
