Greyhound: on the road with risk: in the post-Sept. 11 world, the landscape of risk grows increasingly complex, and risk managers are turning toward less traditional solutions - profile

As the top risk manager at Greyhound Lines Inc., Raymond J. McQueen Jr. doesn't just worry about buying enough liability cover for the giant bus line's fleet of 2,400 motor coaches, or property protection from fire and theft. He has to worry about the safety and security of the 23 million passengers who ride Greyhound buses each year to visit an ailing relative take a vacation or simply get to work. From the fifth-floor office of Greyhound's North Dallas headquarters, McQueen must manage the risks that come with any large corporation that has nearly a billion dollars in annual revenue and 12,000 employees. But as he runs the risk management program of the country's only truly national bus carrier in a post-Sept. 11 world, Greyhound's vice president of risk management carries the responsibility associated with moving millions of passengers into some of the country's most congested cities and most isolated communities.

"Passenger safety is our first concern and obligation ... to have people arrive at their destinations safely," says the 55-year-old New Orleans native. "Greyhound is public transit. It's an open (transportation) system compared to the airlines and we can't operate like a closed system. It's impossible to screen everybody. But improving security is an ongoing process."

McQueen declined to go into detail about actions the company has taken since the Sept. 11 terrorist attacks to ward off any terrorist attack on the Greyhound bus system. But the company has taken many specific measures in the last two years, such as increased employee training programs and random hand-searches of carry-on baggage, to beef up its security system. And the recent award of a $9 million grant administered by the federal Transport Security Administration will help the transportation company ratchet up its security measures even more. (See story on page 62.)

Yet the greater security concerns don't rattle McQueen, who re-assumed his full-time duties as risk manager for Greyhound 11 days before the September 2001 tragedy.

"Risk management has become more comprehensive and complex over the years and that's part of the challenge. It's what piques nay interest and keeps the job creative and challenging," says McQueen. "We do a very good job addressing situations where people are disruptive ... whether intoxicated, mentally unstable or whatever. Our drivers are trained to deal with it; they have protocols to follow."

McQueen previously worked as vice president of risk management at Greyhound from 1996 to 1999, but was laid off during a time of corporate turbulence after Greyhound was acquired by the Canadian company Laidlaw Inc.

Executives at Laidlaw decided to handle Greyhound's risk management functions from its corporate headquarters, then located in Burlington, Ontario. The company decided to shift the function back to Greyhound two years later. Today, McQueen runs his department with 22 people, slightly less than the 26-member department he had before.

The ongoing challenge and diversity of the insurance industry is what has kept McQueen in the sector since he took his first job as a claims adjuster more than 30 years ago. A 1969 graduate of Louisiana State University with a Bachelor of Arts in political science, McQueen says he "kicked around in various jobs" before hooking up with Sentry Insurance in New Orleans in 1972. But he found the insurance industry compelling enough to remain and his career has included turns as regional claim manager for Zurich Insurance and vice president of client services in the Dallas office of broker Sedgwick James of Texas. In between, he found time to earn his Chartered Property and Casualty Underwriter (CPCU) designation in 1980 and his associated risk management and associated reinsurance professional certifications in 1992 and 1994, respectively.

And it is the diversity of risk management, especially in today's rapidly evolving global business world, that has really captured McQueen's enthusiasm. "You're dealing with a variety of business exposures that are all over the board--medical, legal, accounting, finance," says McQueen. "You're not confined to any particular niche. You have to be a good generalist."

The increase in the number of business disciplines that every risk manager encounters today is one of the major changes that McQueen has seen in the risk management field. "And the frequency and severity of risk has changed," says McQueen, adding that the universe of potential loss exposures has become more diverse and moved into such areas as the environment, design and finance. "Risk management is no longer about traditional exposures like fire and liability and health. But that's part of the challenge--to find solutions to an ever-expanding array of risks."

McQueen hammers out those solutions with a demanding schedule that fluctuates from 55 to 70 hours each week. He typically starts each workday between 7 a.m. and 7:30 a.m. by answering e-mails and telephone calls from the Dallas home he shares with his nine-year old basset hound, Sigmund. By 8 a.m., he's usually at his desk in North Dallas, where the smaller of the company's two corporate headquarters buildings are located. (The larger is in downtown Dallas.) And about once a month he's out of the office on a travel assignment to a meeting, industry conference or one of the company's safety presentation meetings.

"The pressure is what I make it. Every position has a certain amount of pressure," says McQueen, who adds that the tension increases during the Sept. 1 renewal season. An ardent cyclist, McQueen burns off some of the workweek stress by cycling in frequent weekend rallies and races.

McQueen declined to provide details of the company's insurance program, but says Greyhound has been self-insured since 1988 and buys excess liability insurance in the marketplace. The company retains the collision risk for physical damage to its fleet of motor coaches while other property risks are insured within a deductible program.

Under U.S. Department of Transportation guidelines, all bus operators that transport 16 or more passengers and cross state lines or continue the inter-state movement of passengers must carry at least $5 million of liability insurance, according to Bill Mahorney, director of safety and regulatory programs at the American Bus Association in Washington D.C.

Mahorney believes more of the industry's 4,000 bus operators would like to self-insure to reduce premium outlays, but they can't met the strict financial requirements set by Department of Transportation.

"[Self-insurance] is not a trend ... it's difficult to do and some companies have been pursuing it for a couple of years," says Mahorney. "It's a long-term process. Companies have to submit tons of documentation about their financial status."

He adds that a busy operator would typically self-insure to cover liability claims of up to $100,000 in order to reduce premium hikes for small claims.

In addition to security concerns, McQueen views highway accidents and the deteriorating condition of the nation's infrastructure as some of the top risks facing the ground transportation industry.

Since there aren't any particular insurance services or products--other than basic property insurance programs and sufficient levels of liability cover--that can cover these risks, Greyhound places an emphasis on preventive measures.

An updated and well-maintained fleet of buses and strong driver training programs help reduce the company's exposure to collisions and poorly maintained highways and bridges.

"Many of our highway systems are crumbling ... what we're seeing are infrastructure problems with highways that are worn out or being repaired on a piecemeal basis," he adds. "Besides being an operational hindrance because of delays, they also represent a lot of safety hazards along the roadways of America."

And with a fleet of 2,400 buses that travels more than 300 million miles per year, that's a lot of exposure. But it doesn't raze McQueen. Therein lies the challenge of his profession.

"It's challenging work," he says. "You have to think creatively."

RELATED ARTICLE: Greyhound beefs up security.

The federal Transportation Security Administration in September awarded Dallas-based Greyhound Bus Lines Inc. a major share of a $20 million grant that is being distributed to motor coach companies across the United States for increased safety and security measures in the wake of the Sept. 11 terrorist attacks.

Still part of the U.S. DOT, TSA will be incorporated into the newly created Homeland Security Administration, said Bill Mahorney, director of safely and regulatory programs at the American Bus Association in Washington D.C.

Greyhound captured $9 million of the federal grant, for which companies had to submit an application. In addition to expanding its existing security program, Greyhound will use the monies in two primary areas: the installation of onboard communications systems, and new driver shields, says Kim Plaskett, senior manager of corporate communications for Greyhound. While the company's drivers now carry cell phones preprogrammed with emergency numbers, the new communications equipment will include two emergency buttons. One button will allow the driver to reach a Greyhound contact trained to handle emergencies. Another button, a red one, will go directly to the 911 emergency number and a global positioning satellite system will pinpoint the vehicle's location, Plaskett says.

And while Greyhound bus drivers now have a protective shield behind their seats, new shields will be installed on the side of their seats, she says.

Plaskett says she believes the program will reimburse the company for its expenditures. "We're always making our system more safe and secure," Plaskett adds. "This will be an acceleration of our existing programs."

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