Having witnessed the tsunami disaster first hand, the chairmanof Lloyd's made a call for early warning systems, which, he said,were vital to prepare for global risks, both natural andcorporate.

Lord Levene of Portsoken, who recently was named to a secondterm as the insurer's chairman, spoke to senior industry officialsin Boston on the need for better risk management and increasedefforts to mend the industry's reputation. “It is not only theinsurance industry and corporate boards that need to address riskmanagement,” he said. “The world needs to prepare for the mostunthinkable disasters. Risk management should be addressed byeveryone.”

Levene, who was vacationing in Malaysia with his family when thetsunami struck, noted that the event came at the end of a recordyear for natural catastrophes, with insured losses of more than $50billion. Major disasters in 2004 included a record typhoon seasonin Japan and the four hurricanes that damaged one in five dwellingsin Florida. This was a sharp reminder that the risk from naturalcatastrophes is increasing and that insurers need to rethink howthey evaluate financial risks, Levene warned.

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