RMs Told Of Need For Global Risk Mitigation

Risk managers at an industry conference were warned of a growing disconnect between global risk and mitigation efforts by a reinsurance firm executive.

Swiss Re reported that Agostino Galvagni, head of the firm's Global and Large Risk divisions, briefed participants at the Risk and Insurance Management Society annual convention in New Orleans on the findings of a Swiss Re report, “Global Risks 2007,” delivered at the World Economic Forum in Davos, Switzerland earlier this year.

According to the company report of his remarks, Mr. Galvagni noted that many of the 23 core global risks explored in the report have worsened over the last year.

He highlighted company recommendations for the establishment of country risk officers and formation of a “coalition of the willing” in an effort to bring governments and business together to develop and execute mutually beneficial risk mitigation strategies.

Joining Mr. Galvagni in the panel discussion were representatives of the Wharton School of the University of Pennsylvania and Marsh brokerage, co-sponsors of the global risk report, which identified several key needs:

o Implementation of a successor agreement to the Kyoto Protocol, this one involving the United States and emerging nations, in an effort to legislate the reduction in carbon emissions that are harmful to the environment and climate.

o Renewal of schemes that guarantee government support for terrorism insurance, including the Terrorism Risk Insurance Act in the United States.

o Identification of “choke points” in supply chains and vulnerabilities that could exacerbate the threat of pandemics.

“Global risks are tightly woven in today's world,” Mr. Galvagni said. “Governments and enterprises need to take a holistic approach to overcome silo-thinking and acting.”

Mr. Galvagni also noted scientific evidence of rising temperatures and increasing frequency and severity of natural catastrophes.

“Businesses and investors must realize that there are commercialization opportunities in mitigating climate change,” he said.