Lloyd's To Texas Business: Beef Up Security

Lloyd's To Texas Business: Beef Up Security

NU Online News Service, Sept. 21, 4:06 p.m. EDT?The chairman of Lloyd's told a forum of Texas business leaders yesterday that they need to do more to increase their security against the threat of terrorism in the 21^st century and suggested how to do it.[@@]

In a speech to the Houston Forum, in Houston, Lord Peter Levene said that while Hurricane Ivan is a timely reminder of the risks posed by natural catastrophes, Texan businesses must not lose focus on the security risks they face in the 21st century.

"There is no doubt Texas is a state at risk," Mr. Levene told business leaders, according to Lloyd's. "With its strong influence in the U.S. economy, the state's ports, energy industry, high rise buildings and people all contribute to a complex security environment which needs to be managed in a careful and planned way."

He said that while the insurance industry was encouraged by the Department of Homeland Security's focus on Texas, granting the state's ports a number of grants to improve security, more needs to be done.

He said an industry survey shows less than half of U.S. companies are buying terrorism coverage, adding that the good news is that the figure is nearly double from the number buying it this time last year.

Citing recent reports and surveys suggesting companies are unprepared for terrorist attacks, Mr. Levene said companies must invest more, as much in terms of time as money, in contingency planning, to better prepare themselves against "the broadest spectrum of security risks we all fear."

He added that cyber-security needs to be addressed because companies have not adequately prepared themselves for cyber-attacks against their system.

Firms need to allocate more funds to improve security, educate employees and implement procedures throughout their organizations, he advised.

"Many companies have improved their security measures considerably since September 11th," he said, "but there is still little consistency as security standards vary greatly."

According to Lloyd's, its risk experts feel that improved security is a step which companies can take relatively easily, but which can make all the difference. Underwriters recommend basic security measures such as perimeter control, checking identifications, closed circuit TV monitoring, and a greater presence of security personnel.

Mr. Levene emphasized that while insurance is one important consideration, companies must take risk decisions to the board level for effective risk management in the 21st century.

He said, "Companies need to recognize that the risk environment has changed, and they cannot rely on 20th century risk management techniques to solve 21st century problems."

"Without a culture of risk awareness in the boardroom," he added, "we cannot truly put our hands on our hearts and say we are ready for the 21st century risk environment."

Lloyd's said that it conducts more business in Texas than any state?with a total of more than $850 million in 2003. Of the 17 Texan companies which rank in the Fortune 500, Lloyd's insures 13 of them.