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RISK MANAGEMENT SOCIETY PRESIDENT ADDRESSES JAPAN'S CORPORATE ELITE

 KYOTO, Japan, Nov. 25 ~PRNewswire~ -- "If you're like CEOs in the United States, you have a keen sense of the magnitude of risk your companies face, but you are less aware of the role of the professional risk manager in containing risk cost and exposure."
 With this assertion as the opening salvo, a prominent group of chief executives of Japan's largest companies were briefed on developments in risk management in the U.S. by Suzanne H. Crager, president of the Risk and Insurance Management Society (RIMS).
 Crager was speaking before Keidanren, Japan's foremost business organization. Included among its 6,000 members are the CEOs of all major Japanese corporations.
 Crager noted that the cost of risk has risen dramatically in the United States, significantly outpacing the rate of inflation and threatening the global competitiveness of companies producing products and services here.
 "In an environment where the parameters of risk and the costs of financing exposures to losses have reached unprecedented heights, risk management can be a make-or-break factor in corporate performance," she said.
 "Today determining the most cost-effective means of risk financing can save companies millions of dollars each year," she told the Japanese business leaders. According to a recent RIMS survey, the cost of risk for U.S. companies increased by an annual average of 22.7 percent between 1984 and 1990, she said, with the major causes being liability exposures and runaway health insurance costs.
 Crager noted that tort liability costs in the U.S. are 2.3 percent of Gross Domestic Product (GDP), or more than $132 billion annually. This compares with .7 percent of GDP for Japan.
 Crager specified a number of initiatives required of risk managers, notably the development of more sophisticated techniques of risk prevention, including alternatives in risk financing and becoming increasingly active in shaping legislative and regulatory debates. Crager concluded that the discipline of risk management is taking hold among companies worldwide as an outgrowth of the globalization of business, which is bringing permanent changes to all economies. "The expanding parameters of risk in an increasingly complex global economic and social framework creates a gravity force for the development and advancement of professional risk management worldwide," she said.
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 ~Editors: The full text of Crager's remarks is available upon request.~
 ~CONTACT: John Shiffert of Shaeffer and Associates, 215-546-1660, for RIMS~


CO: Risk and Insurance Management Society ST: IN: FIN SU:

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Publication:PR Newswire
Date:Nov 25, 1992
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