Printer Friendly

SOARING LIABILITY COSTS LOOM AS A MAJOR THREAT, LEADING RISK MANAGER TELLS JAPAN BUSINESS EXECUTIVES

             SOARING LIABILITY COSTS LOOM AS A MAJOR THREAT,
          LEADING RISK MANAGER TELLS JAPAN BUSINESS EXECUTIVES
    TOYAMA, Japan, Nov. 5 /PRNewswire/ -- Liability exposures and other insurance-related costs have soared to the point where they are major factors in the financial planning of any company doing business in the United States, a spokesman for the nation's risk managers told leading Japanese business executives meeting here today.
    Speaking at Japan's first-ever international conference on risk management, co-sponsored by the University of Toyama and Keidanren, Japan's foremost business organization, Robert W. Esenberg, president of the Risk & Insurance Management Society, briefed Japanese leaders on risks confronting U.S. businesses.
    In addressing the International Symposium on Risk Management, Esenberg said companies in the United States face an unprecedented magnitude of risks, and that costs associated with financing risk have risen to the point where they are "a major factor" in the financial planning of companies.
    He said the high cost of risk exposures can affect the global competitiveness of U.S. companies, and has thrust the discipline of risk management into prominence over the past several years.
    The role of risk managers, he noted, is to create a framework for determining the most cost-effective means of financing risk and thereby protecting the interests of businesses.
    He noted that with the parameters of risk exposures expanding, increased emphasis is being placed on loss prevention and alternative modes of risk financing, such as self-insuring and the creation of captive insurance companies, as opposed to the purchase of commercial insurance.
    Esenberg called liability exposures "the most vexing problem facing businesses in the U.S. today," citing in particular the areas of environmental, professional and products liability.
    "Today, liability costs can threaten the financial well-being of companies," he said, "and there are those who believe that costs have grown to the point where they hinder the competitiveness of U.S. companies in the world market."
    Beyond liability exposures, Esenberg pointed to increased costs of workers' compensation coverage, insurer insolvencies and an overall level of instability in the insurance market and regulatory framework as major factors in the U.S. risk management environment.
    "In particular, workers' compensation costs are escalating at rates that are placing severe financial burdens on companies, forcing some to abandon operations in certain states where the situation is untenable," he said.
    "At the present time, the solvency of a number of American insurance companies is in serious question, and policyholders have grave concerns that the resources may not be available for paying claims as they arise," he noted.
    Although solvency problems have heretofore been confined to life insurers, he said, there are widespread fears among risk managers that property-casualty operations will also be affected.
    "At the very least, financially troubled insurance companies are the topic of serious concern for risk managers as they structure risk financing programs under what are already exceedingly difficult conditions," he concluded.
    Esenberg, noting that risk managers are heavily involved in legislative and regulatory development, summarized various insurance industry-related initiatives under discussion in the United States, including:  federal oversight in place of, or on top of, state regulation; tort reform; and scrutiny of the McCarren-Ferguson Act, which exempts the insurance industry from anti-trust regulations.
    Summarizing, he said, "We may be at a pivotal point in history as it relates to issues vital to the field of risk management and the economic viability of U.S. corporations."
    -0-                         11/5/91
    /Editors:  The full text of Esenberg's presentation is available upon request./
   /CONTACT:  Bruce Shaeffer of Shaeffer & Associates, 215-546-1660, for the Risk & Insurance Management Society/ CO:  Risk & Insurance Management Society ST: IN:  INS SU: JS-MK -- PH007 -- 1134 11/05/91 09:47 EST
COPYRIGHT 1991 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Nov 5, 1991
Words:609
Previous Article:HEILIG-MEYERS REPORTS OCTOBER SALES RESULTS
Next Article:PHP HEALTHCARE ANNOUNCES SIGNING OF $20 MILLION CREDIT FACILITY
Topics:


Related Articles
Opportunities lie ahead.
A&SURVEY: CRIPPLING HEALTH CARE AND WORKERS COMP EXPENSES THREATEN U.S. BUSINESSES
JURY AWARDS AND HEALTH CARE COSTS DOMINATE CONCERNS OF MANUFACTURERS
ANXIETY OVER SOARING HEALTH CARE COSTS AND DIRECTORS & OFFICERS LIABILITY PERSISTS FOR SERVICE COMPANIES
RISK MANAGEMENT SOCIETY PRESIDENT ADDRESSES JAPAN'S CORPORATE ELITE
BEYOND EXOTIC DERIVATIVES: COMMUNITY BANKS FACE AN ARRAY OF EXPOSURES ACCORDING TO EXECUTIVE RISK
Japan's new insurance frontier.
EXECUTIVE RISK ANSWERS THE $247,OOO QUESTION WITH NEW, STAND-ALONE EMPLOYMENT PRACTICES LIABILITY INSURANCE
Datebook.
Corner office, risk managers see international risk differently.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters