Posted July 18, 2012
What is Adventist Risk Management, and what does it do? Insurance? Yes. And much more.
Adventist Risk Management (ARM) is a ministry of the Seventh-day Adventist Church. ARM is a team of risk management professionals who are passionate about the mission of the church. ARM believes in being wise stewards of the resources God has entrusted to His church. ARM believes in protecting our churches, institutions, missionaries, and members, especially our children.
Why does the church need a risk management and insurance company? The vast majority of church ministry activities take place without major incident or loss. The church is really quite blessed! However, accidents do sometimes happen; and natural disasters strike indiscriminately. Good stewards of the church must always be prepared.
Protecting the Church
In 1935, in the middle of the Great Depression, Adventist Risk Management started as a dream of William Benjamin and an investment of $25,000 by the General Conference. Benjamin, an Adventist insurance professional, saw the need for an organization to protect the assets of the Adventist Church from various types of loss.
Today the ministry of ARM serves the risk management needs of the Seventh-day Adventist Church around the world through its family of eight companies, located in four countries, with a staff of more than 130 insurance professionals.
But what exactly is risk management? Risk management is not just about insurance; risk management is about being good stewards of the resources that have been entrusted to us by God.
In practical terms, risk management encompasses three important aspects of stewardship:
2. Control of Loss. In the event that an accident, injury, or destruction of property cannot be prevented, risk management asks how losses can be minimized both to individuals and to the organization.
3. Risk financing. This is where insurance comes in. If a significant loss cannot be prevented (such as hail or hurricane damage), then as stewards of the church’s resources, leaders must look for ways to effectively insure the assets of the church.
“The Adventist Risk Management ministry is one of the [church’s] best-kept secrets--and we’re fine with that. We are here to serve other ministries,” says Bob Kyte, president of ARM. “To this end ARM has invested its resources to providing protection of the church, its members, and its properties and resources. Our ministry is to protect your ministry!”
Why does the church need an organization like ARM when many other insurance companies are available to insure the activities and properties of the church? Simply put, many activities and risks are unique to our church and make it difficult to get affordable coverage for our needs. ARM’s units are called captive insurance companies, or companies owned by the Adventist Church to insure only the church. We are able to obtain insurance coverage for property, liability, and employment practices--including sexual molestation--that meets our needs at reasonable prices. This insurance model, pioneered by the Seventh-day Adventist Church, is now common practice among many denominations.
There are a number of ways in which ARM is a distinctive option for risk management and risk financing:
First, ARM understands the needs of the Seventh-day Adventist Church. ARM leaders and employees are members of the church. ARM is a team of people passionate about the church’s mission.
Second, ARM is the risk manager for the church. Unlike profit-driven insurance companies, ARM is a self-sustaining ministry. More important, ARM invests large amounts of funding to support the risk management and loss control education for various church organizations. This is accomplished through close collaboration with church entities, site visits, risk management conferences, as well as numerous other learning opportunities to educate church leaders and those responsible locally for risk management.
Third, while ARM is a ministry of the church, its unique mission draws on Adventist insurance professionals to manage these special programs for the church.
As a ministry, ARM is committed to being a good steward of the resources turned over to its care. In the area of risk financing, commonly known as insurance, the captive insurance units of ARM are there to help churches, schools, and other organizations when something goes wrong.
In 2011 the ARM family of companies’ revenue totaled $47 million, out of which it reinvested substantially in risk prevention and management programs for the church. Additionally, the ARM captive insurance units paid slightly more than $33 million for resolving claims across the various product lines it insures; $18.5 million alone was paid for property claim settlements from all the church properties insured by ARM around the world that are valued at $12.5 billion. The year 2011 was exceptional in the insurance industry worldwide because of the huge property losses that resulted from catastrophic weather: tornadoes, hurricanes, earthquakes, and devastating hail. The Seventh-day Adventist Church is not immune to such disasters.
Our Most Serious Charge
Another loss that draws great concern and is a priority for ARM and the Adventist Church is child abuse.1 While child protection is a priority for ARM, it is not the denomination’s area of greatest financial loss. Throughout the past 20 years, ARM has paid slightly more than $1.5 million per year (a total of $30 million) in settling claims involving sexual misconduct in the United States for the entities we insure. This accounts for about 400 claims involving 526 victims.2
Property claims alone incur far greater financial losses for the church. But child protection is critically important because it involves victims who are children. Like a severe physical injury that can impair one’s life, these acts of abuse can have an ongoing impact in the lives of children and their families.
Working with the Adventist Church in North America, ARM has taken significant, positive steps to prevent this problem from occurring in our churches and schools. All teachers in Adventist schools across North America, and every volunteer involved in activities with children, must be screened for criminal conduct that would prevent them from working with minors.
“The Adventist Church in North America is committed to preventing these incidents from occurring. We have zero tolerance with persons who commit these criminal acts,” says Dan Jackson, president of the Adventist Church in North America. “The church and our partner ARM are committed to making our churches and schools safe for children.”
ARM has developed guidelines to help direct the church through this difficult issue. Additionally, some aspects of child abuse are not just a matter of following guidelines but of following the law. Offenders, for example, should be reported to the police and other appropriate authorities immediately. In fact, in many states failure to report such incidents is a violation of law. Church organizations have to cooperate fully with investigating agencies.
Equally important, ARM recommends that all church organizations become involved with the victim and family of such abuse early in the process in order to provide appropriate counseling and support, and the alleged perpetrator must be immediately suspended from any contact with children. Those who are found to have committed these acts should be permanently removed from all activities with children in the church. If they are employees of the church they should be terminated from their employment.
While it is understood that the Seventh-day Adventist Church is grace-oriented and forgiveness is part of the church’s belief structure, when an individual has been proven to have abused a minor, he or she must live with the consequences of those acts.
Sometimes people cannot believe such acts were committed by these individuals. ARM has received phone calls from pastors or conference administrators trying to deal with these challenges. Church members often want to forgive and let the offender not only attend church but also be active in church leadership positions. While forgiveness is always appropriate, continued service as a leader is inappropriate. It must not be forgotten that the primary concern in these situations is to safeguard the children entrusted to the church for worship, school, or other activities.
The church’s response in the aftermath of a sexual molestation is vitally important. The focus should be on doing what’s right for the victims involved. While some insurance companies may take the position that they do not want to hear from the insured church organization until a lawsuit is filed, ARM takes a proactive position in assisting church organizations in addressing the needs of the victim and providing legal defense in the event of a lawsuit against the church.
However, if there is abuse, and the church has failed in its duties to protect a child, ARM does not fight that child’s rights to a fair redress of wrongs.
ARM aims to do the right thing and compensate the victim appropriately for the injury suffered. We know that money will never correct the trauma inflicted against a child, and we work to include counseling and other necessary assistance. It should be noted that ARM does not provide a legal defense of the alleged perpetrator if authorities proceed with criminal charges, as is often the case.
The church has a moral and legal obligation to protect our children and to provide them with a safe environment for worship, study, and play. But whether it is protecting our precious children, our churches, or our ministries, ARM is committed to be wise stewards of the resources God has entrusted to us and to help the church do the same.
ARM’s profile in the overall ministry of the church is low in relation to the impact we have on the mission of the church. And that’s as it should be. It is not the purpose of ARM to be the center of attention. Rather, it is educating to prevent losses, helping to control losses, and assisting the church when a loss occurs that makes Adventist Risk Management a successful ministry. ARM provides simple solutions to minimize risk for the church.
ARM’s ministry is to protect the church’s ministry!
1 See the article “Abuse Prevention a Priority for Adventist Risk Management,” Adventist Review, March 8, 2012.
2 Financial data as of December 31, 2011.
Julio C. Muñoz is a marketing specialist for Adventist Risk Management.