The head of Marsh's insurance brokerage unit warned the chief executives of the world's major oil companies today that they need to be adequately prepared for new risks to business, including cash and labor shortages, bombs, hackers and epidemics.

Speaking to 400 senior national oil company executives assembled in Dubai, Dan Glaser, chairman and chief executive officer of Marsh, spoke during the opening of the National Oil Companies Conference organized by his firm.

According to a report of his remarks furnished by Marsh, Mr. Glaser said: "Ten years ago, operational and legal risks would have been the most significant threat. Operational and legal risks remain important, but some of them seem pretty standard, almost trite representatives of a simpler time."

He noted that the major risks today include threats from pandemics; climate change; cyber crime; population explosion; the emergence of unified, competing regional markets; nuclear proliferation; religious fragmentation; and cultural shifts.

"These risks involve large, truly catastrophic risk potential, with very little ability for an insurer to evaluate and underwrite," he said.

He noted there are three key issues facing the industry today:

o Companies must cope with accessing a skilled labor force. Even when skilled labor is available, oil companies have to meet the rising costs for that workforce.

o Tightening debt markets are making leveraged projects more difficult to accomplish.

o Infrastructure shortages: steel and concrete--the very components oil companies require to develop their infrastructure--are in short supply, and that supply cost is increasing constantly.

He said all of these factors are present for all oil companies and need to be discussed between insurance brokers and the companies.

"The answers do not lie in what worked in years past," he said. "The problem-solvers for tomorrow's energy challenges will be the successful global firms of the future."

Special Reports /

Oil Companies Face New Threats: Marsh CEO

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