From the February 13, 2012 issue of National Underwriter Property & Casualty • Subscribe!

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.”

Comments

Resource Center

View All »

Get $100 in leads with $0 down!

NetQuote's detailed, real-time leads have boosted sales for thousands of successful local agents across the...

The Growing Role of Excess & Surplus Lines in Today’s...

The excess and surplus market (E&S) provides coverage when standard insurance carriers cannot or will...

Increase Sales Conversion with this Complimentary White Paper

This whitepaper will share proven techniques - used by many of the industry's top producers...

D&O Policy Definitions: Don't Overlook These Critical Terms

Unlike other forms of insurance where standard policy language prevails, with D&O policies, even seemingly...

Environmental Risk: Lessons Learned from Willy Wonka and the Chocolate...

Whether it’s a chocolate factory or an industrial wastewater treatment facility, cleanup and impacts to...

More Data, Earlier: The Value of Incorporating Data and Analytics...

Incorporating more data earlier in claims lifecycles can help you reduce severity payments by 25%*...

How Many Of Your Clients Are At Risk Of Flood?

Every home is vulnerable to flooding. Learn four compelling reasons why discussing flood insurance with...

Gauging your Business Intelligence Analytics Capabilities and the Impact of...

Big Data, Data Lakes and Data Swamps, How to gauge your company's Big Data readiness....

Extending Contact Center Capabilities Across the Insurance Enterprise

Today advancements in technology are making a big impact on business and society. To yield...

Drug and Alcohol Testing Requirements

In this two-part series, NBIS Risk Management team will break down the requirements to assist...

PropertyCasualty360 Daily eNews

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

Advertisement. Closing in 15 seconds.