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ANXIETY OVER SOARING HEALTH CARE COSTS AND DIRECTORS & OFFICERS LIABILITY PERSISTS FOR SERVICE COMPANIES

 ANXIETY OVER SOARING HEALTH CARE COSTS AND
 DIRECTORS & OFFICERS LIABILITY PERSISTS FOR SERVICE COMPANIES
 NEW YORK, May 22 /PRNewswire/ -- Skyrocketing medical expenses and excessive punitive damage awards continue to be leading business concerns for U.S. service companies, according to a national survey conducted by Alexander & Alexander Services Inc. (A&A) (NYSE: AAL).
 Eighty-four percent of services executives targeted corporate health care expenditures as a threat to their firms' financial stability.
 For the fifth consecutive year, the need to limit directors and officers liability placed second in the ratings, at 80 percent. This was followed closely by capping punitive damage awards at 79 percent.
 Once again, workers compensation issues figured prominently in this year's survey. Seventy-nine percent of service company officials expressed apprehension over employees' use of the workers comp system in lieu of health care benefits. The need to implement workplace safety policies and to develop workers comp cost-containment strategies were also top priorities.
 "Our findings suggest that the ability to pay for soaring medical expenditures is being further undermined by an ailing workers comp system," reports Robert H. Moore, A&A senior vice president. "Worries over litigation and health care costs is also reflected in the emphasis on the prevention of workplace injuries."
 To curb companies' workers comp costs and related health care expenditures, A&A has created a strategic workers comp consulting group from a cross-section of its broking, consulting and risk management services. Its job is to develop solutions to the complex challenges posed by these interrelated issues.
 This year's findings registered a significant preoccupation with insurance market conditions. Concern over the continuation of the soft property/casualty market and unpredictable insurance prices received ratings of 79 and 77 percent, respectively. The use of alternative risk financing mechanisms was also among the top 10 issues for this group.
 "These issues are very closely related," reports Moore. "Companies are benefiting from lower insurance costs. However, services executives believe that prices will eventually rise, perhaps abruptly, as they did when the market turned in the mid-'80s. Their emphasis on alternative risk financing mechanisms reflects a keen interest in less volatile options."
 The 1992 survey recorded a decrease in importance for one civil justice issue -- modification of the joint and several liability doctrine. Ranked fifth in last year's survey, this topic dropped to eighth with a 74 percent response rate this year.
 A&A's fifth annual survey focused on 98 legislative and regulatory issues. Typical respondents were executives in companies with sales of $250 million or more, with half generating sales of at least $1 billion.
 The research was undertaken by A&A Government & Industry Affairs Inc., in Washington, D.C., and Radford Associates, part of the Alexander & Alexander Consulting Group Inc., a human resource management consulting company.
 A&A is a global insurance brokerage, risk management and human resource management consulting company serving clients from offices in more than 80 countries.
 Alexander & Alexander 1992 Survey
 Services Executives
 10 Leading Public Policy Concerns
 Spiraling health care costs 84 percent
 Limits on directors & officers liability 80 percent
 Caps on punitive damages awards 79 percent
 Soft property/casualty insurance market 79 percent
 Use of workers comp system in lieu of health care program 79 percent
 Unpredictability of price swings in insurance market 77 percent
 Workplace safety 76 percent
 Use of alternative risk financing mechanisms 74 percent
 Implementation of workers comp cost-containment
 strategies 74 percent
 Modification of joint and several liability doctrine 4 percent
 -0- 5/22/92
 /NOTE TO EDITORS: Copies of the report are available from A&A Services Inc., Corporate Communications, 1211 Avenue of the Americas, New York, N.Y. 10036.
 /CONTACT: Cathy Aiello of Alexander & Alexander, 212-840-8500/ CO: Alexander & Alexander Services Inc. ST: New York IN: INS SU:


SH -- NY019 -- 3273 05/22/92 11:40 EDT
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Publication:PR Newswire
Date:May 22, 1992
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