Willis CEO: Managing Risk Requires Vision for the Long Term

In an environment of rapidly evolving risks, merely anticipating risk is not enough: Organizations also need to focus on building resilience to effectively manage risk and to position themselves for long-term sustainability, says the chief executive of Willis Group Holdings.

Speaking at the 2012 World Captive Forum, Willis Chairman/CEO Joe Plumeri said hallmarks of a resilient organization include acknowledging the difficulty of predicting so-called “black swan” events. Organizations need to operate in a dynamic fashion to make adjustments in real time when a catastrophe strikes while simultaneously preparing for the future, he noted.

“In order for companies to build resilience, they need to ask themselves: Will we be here in 10 years? Will we be here in 50 years?” he said.

The forum convened this year in Miami, the site of the costliest disaster in U.S. history. The great Miami hurricane of 1926 resulted in severe loss of life and steep economic losses, which, adjusted for 2010 inflation, would total $169 billion, according to data released by the National Oceanic & Atmospheric Administration. 

A leading catastrophe modeler estimated that this storm today would cause an estimated $101 billion in insured losses, drawing down a significant portion of the global-insurance capacity, said Plumeri.

“Traditional P&C risks endure, but the nature of risk is changing,” he said. The top risks on the minds of business leaders today are not easily solved by purchasing insurance, he continued, citing examples such as loss of customers, regulatory investigations and reputational risk.

The captive-insurance industry, he noted, was born out of the insurance-liability crisis of the 1980s and began as an “exercise in anticipation” as risk managers needed solutions when they found the insurance marketplace unreliable.

Now, captives stand as a testament to resilience, Plumeri said: “The captive-insurance industry has evolved and now offers a robust and effective approach to help firms become resilient in the face of unpredictable risks. Captives play a key role in the insurance industry, offering creative solutions for critical risks.”

Top Story

Ferguson burning: 9 scenes of property damage in the wake of the riots

A grand jury in Ferguson, Missouri on Monday declined to indict a local police officer in the August 2014 shooting death of 18-year-old Michael Brown, setting off a night of violent riots in the suburban St. Louis community. Here's the aftermath.

Top Story

Ranked! Here's the safest minivan on the road, and the 4 that fall short

Minivans are the safest vehicles for families, right? Well, maybe not.

More Resources


eNewsletter Sign Up

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Mobile Phone

Advertisement. Closing in 15 seconds.