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Katie Cormier is a risk management and insurance professional with over 15 years of experience, specializing in single-parent captives and self-insurance. At Salt River Project, she manages insurance placements and risk-financing programs, protecting the utility from financial losses.
In an interview with Insurance Business Review, Cormier discussed the evolution of utility risk management, how insurance programs adapt to operational changes and the role of technology in property valuations. A Career Shaped by Growth I began my career at Countywide Insurance, handling compliance on personal lines. Later, I joined Salt River Project in a call center role and steadily progressed through my work. 15 years ago, I advanced into insurance services as a risk analyst, and two years ago, I was promoted to insurance program manager. I currently oversee the company’s entire insurance program. Evolution in Utility Risk Management The utility industry has undergone significant changes over the past 15 years, transitioning from traditional coal and gas power systems to newer technologies like solar energy and battery storage. These developments have made asset valuations more complex as insurers lack historical loss data. To address this challenge, we rely on broker partners and evaluate assets using industry indexes while benchmarking against other utilities. To ensure transparency during audits, we prioritize documenting valuation methods, which is essential for jointly owned utilities. Consistency with these valuation methods is also important, as frequent changes can create audit issues. Adapting Insurance Programs to Operational Changes A major challenge in utility insurance is keeping up with major operational and infrastructural changes. It is essential to align with these and ensure that coverage is properly scheduled for every asset. At Salt River Project, we are in the process of decommissioning a coal facility and converting it into gas generation. Through open communication with plant leadership, we determine when to adjust asset values and ensure proper insurance coverage. We also ensure that the newly constructed pump-back storage building is included in the program. Additionally, administrative buildings were closed due to the shift to a hybrid workforce and were removed from the program accordingly. Role of Technology in Property Valuations AI has the potential to become a valuable tool in risk management, and I’m actively incorporating it in my work. Efficiency is important for risk managers who handle numerous responsibilities with limited utility budgets. AI can streamline data management and asset valuation, enabling risk managers to use their time more effectively without needing additional staff. Traditionally, asset evaluations relied on desktop calculations or on-site visits by adjusters, which can be time-consuming for both risk managers and operational teams. AI can assist in identifying the addition of new equipment to a substation and estimating the potential increase in asset value. At the same time, human review remains essential to ensure results are accurate and balanced. We have developed homegrown solutions in collaboration with our IT department to manage insurance program data better. This system captures policy data, asset valuations and insurance rates, automatically calculating relevant information. This dynamic, easily accessible program helps us manage data more effectively than static Excel sheets. Advice for Professional Risk Managers Maintaining clear and well-documented valuation methodologies is essential for building trust with insurance carriers and preventing disputes over asset values. During COVID, inflation and construction disruptions led many insurers to question asset valuations across the industry, but our detailed documentation ensured valuations were accepted without dispute. It is also important to understand the unique risks in utility assets. For example, hydro generation may include components that are not necessarily insurable, making it essential to assess its eligibility for insurance coverage. Similarly, we conduct internal reviews in our substations to determine whether certain assets should be insured. These evaluations refine the insurance program and prevent unnecessary inflation of asset values.