1. Institute of Risk Management
Scottish Central & Southern Regional Group
Project Risk Management
20 May 2009
2. Agenda
• Introduction
• Concepts
• Best Practice
• Framework
• Challenges
Heath Lambert is Europe’s leading independent insurance broker.
e concentrate on our strengths and utilise our group resources to provide innovative solutions.
he provision of specialist expertise in construction, transportation and professional indemnity.
3. Scene Setter
• Capacity - deal flow if accelerated infrastructure investment, finance availability, staff cuts
• Claims – Multiplex and Watson Steel sues, insured losses, ability to insure
• Evidence of healthy capital – forex, increased regulation, more duties, more fraud/theft
• Market predictability - rumours, market aggregation, resource, degree of risk transfer, OF
• Subsidy – tax payer long term liabilities, skills academies
• Terrorism – remaining security issues
National Audit Office :-
…63 % of all project risks were not identifi
McKinsey reports :-
…36 % of executives did not fully understa
HM Treasury :-
…a demonstrated, systematic, tendency fo
4. Some Givens
• Risks are Threats or Opportunities
• Varies between Type of Project, Sector and Means of Control (Diet, Environment a
• Perceived useful (essential) when Adding Value
• If we are not managing our risks, we are not managing projects appropriately !
• Adapt to suit project lifecycle needs
• Entrepreneurial spirit- there is no opportunity without taking risk
• Design and construction risks are entirely manageable
• Only as strong as input and feels like the search for the right questions
7. Best Practice (Cont.)
• Project Variations
– Client and Project Objectives
– Internal/External Assurance Framework
– Procurement Strategies
• Packaging, Delivery Companies
• Forms of Contract, Degree of Risk Transfer
• Targets and Incentivisation
• Risk Scope
– Credibility, Reputation, Fraud, Terrorism & Security and Disaster Recov
8. Best Practice (Cont.)
• Project Examples & Outcomes
– Clear specification (BBC HQ)
– Clear governance arrangements (Holyrood)
– Ensure that the all parties contribute to a consistent framework for risk management including ability to cont
– Examine options to cap, fix and agree fees at the earliest opportunity (Wembley)
– Foster a ‘partnering’ relationship is fostered to ensure individuals feel free to express any reservations (NEC
– Initiating early design (Architect Led)
– Incentivisation (T5)
– Procurement option appraisal, maintaining market interest, utilising experienced resource (EARL)
– Provide project reviews to provide assurance – (Funder/Sponsor - Quarterly, Scrutiny Panel, OGC Gateway
– Rigorous change control (Tram)
– Understand project objectives (BAA)
9. Framework
• Objectives
– Accurate Reporting
– Best Practice compliance
– Clear Governance with Escalation
– Define Organisational RACI
– De-risking Project
– Identify, Assess, Plan, Monitor
– Inform Decision Making
– Stakeholder Assurance
– Understanding complex interactions
Infrastructure
Design/Const
Project
Management
Safety
System
Operations
Modelling Procurement
Project
Assumptions Issues/
Concerns
Commitments
Cost QRA Schedule QRA
Cost OB Schedule OB
Contingency Analysis
Policy and Management Framework
Strategic
Political
Stakeholder
Business
Environmental Equipment
Supporting Registers
Escalation Showstopper
Risk Register Risk Register
Level 1 Risk Register
Corporate
10. Challenges
• Early insurance and risk financing strategy development
• Taking in different views
– Understanding cultural attitudes and perceptions
– Bringing co-operation with internal divisional differences
– Bringing co-operation through stakeholders
– Compromising risk appetite and tolerance
• Risk manager viewpoint
– Employee risk awareness
– Keeping the risk register real
– Linking risk management to organisa
– Making business continuity believab
11.
12. Thank You
project insurance and risk adviser, the broker of choice, offering a premier service and innova
Mark Bourke
A: 101 George Street, Edinburgh EH2 3ES
E: mbourke@heathlambert.com
P: 0131 718 0460
