NU Online News Service, Sept. 24, 2:05 p.m. EDT

Developing energy sector technology demands will provide newunderwriting opportunities for insurers, the chief executive ofMarsh insurance brokerage said.

Dan Glaser, Marsh chairman and chief executive officer of thefirm made that forecast at the 44th annual Marine Insurance Seminarin Houston, according to a copy of his remarks released by hiscompany.

Mr. Glaser called on the insurance industry to displayingenuity, discipline and vigor to meet the emerging needs ofclients in the energy sector.

Discussing the expanded development of alternative and renewableenergy sources, such as wind and solar power, Mr. Glaser mentionedthe need for major enhancements to the energy distribution grid,which he said may present opportunities for innovative riskapproaches.

He also observed that pending regulations, such as cap andtrade, and other initiatives to reduce greenhouse gas emissions,are leading energy producers that rely on fossil fuels to seek newsolutions, such as carbon capture and sequestration, noting thatthese projects "need sound risk management and transfer to attractinvestors."

"The challenge for all of us is to recognize that the 'tried andtrue' risk management approaches and strategies have to becontinually challenged and improved. Innovation matters - and it'sno longer elective," Mr. Glaser emphasized.

"The tide of our times has served to elevate integratedfirm-wide risk management to the level of the imperative," said Mr.Glaser, underscoring the need for energy companies to navigateincreasingly complex challenges, including fallout from the globaleconomic crisis, energy price volatility, and natural catastropherisks.

Calling enterprise risk management (ERM) "a cultural, strategicand operational imperative" that "needs to be embedded in theculture and practices of the entire organization," Mr. Glaser saidthere is an understanding within the energy sector that "ERM is aframework of analysis that allows an organization to recognize andavoid a significant surprise."

In recent years, the insurance industry has developed solutionsto respond to the energy sector's needs for oil and gas reserveproduction protection, contingent capital for businessinterruption, as well as for coverage to help stabilize margins forrefining and petrochemical plant production, he said.

In this context, Mr. Glaser pointed to Marsh's role indeveloping a surety solution to help protect plant performance, andinsurance to provide decommissioning funding for nuclear powerplants.

"The energy industry is the lifeblood of production andcommerce, facing new and ever more challenging risks every day,"Mr. Glaser said. "The good news - the excellent news - is that theinsurance industry has the vision, intellect, tools, methods andmotivation to help companies manage risks on the road toreward."