Changing Market Challenges Risk Managers and Insurers.
Risk managers themselves say the changing market conditions will affect smaller companies more than the larger ones.
Roland J. Bonitati, senior vice president of marketing for FM Global, said a hardening insurance market, plus evolving industries, are creating new categories of risk that many corporate risk managers need to understand.
"This will test their skills. In some ways, we'll have to provide the training and the education they'll need to get through this environment," said Roger L. Andrews, a member of the RIMS Executive Council.
"Businesses have been compelled to make gains in productivity, improve their margins. To do this, they use new business practices, such as just-in-time distribution, outsourcing, downsizing. They eliminate redundancies, which change risk exposures," Bonitati said.
"And they have really found more value in intellectual property than in bricks and mortar. So it is difficult for them to understand those new risks, and as underwriters we have to apply new techniques to understand what their risks are," he said.
The market hardening favors insurers, Bonitati said, as premium prices in commercial and property/casualty sectors rise.
David Mair, the new RIMS president, said many risk managers will need to sharpen their skills, after years of working in a soft market.
Lance J. Ewing, another member of the RIMS Executive Council, said some large corporations may look at captive alternatives that had been shelved in the past as a solution to higher premium rates. "You may see more risk-pooling initiatives among middle-market companies," he said.
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|Comment:||Changing Market Challenges Risk Managers and Insurers.|
|Article Type:||Brief Article|
|Date:||Jun 1, 2001|
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