Two of the "hot" topics spotlighted by the Risk and Insurance Management Society at this year's annual conference go from the realm of science fiction stories–how solar storms could threaten power grids in 2012–to the nitty-gritty controversy facing every buyer today–keeping on top of broker compensation.
The 2010 program includes 130 sessions, featuring more than 400 industry experts, who will discuss hard-core topics including captives, claims management, disaster recovery, enterprise risk management, finance, globalization, governance and regulatory compliance, loss control, and other risk management issues, noted RIMS President Terry Fleming.
However, one of the hot topics he cited is how solar storms could have a huge impact on businesses and municipalities because of burgeoning communication and network issues.
Indeed, session coordinator Ashutosh (Rish) Riswadkar, line of business director in the risk engineering department for Zurich in Schaumberg, Ill., told National Underwriter that an 11-year cycle of the sun could affect the Earth in 2012, potentially impacting electrical power grids and telecommunications.
Scientists at NASA monitor the solar storms and make predictions based on their findings, he said. One of their scenarios is potential geo-magnetic activity that could compromise the electrical grid for power distribution on a wide scale, Mr. Riswadkar warned.
A benchmark illustrating the potential exposure was in 1989, in Quebec, Canada, when there was a nine-hour blackout caused by a solar storm, he noted.
In 2003 there were three- to five-day power outages on the East Coast in the United States, he said–adding that while this event was not caused by a solar storm, the outage illustrates dependence on electricity and the potential impact such an event could have on businesses and governments.
Solar storms are recognized as an emerging risk, he noted. Whether this will, indeed, become a reality, he said, remains to be seen, "but the risk is there."
On the broker compensation issue, Mr. Fleming said that RIMS' position is well known. "And with the New York Attorney General lifting the prohibition with the big-three brokers, it's a timely topic–again," he said. New York also has new rules going into effect next year governing broker compensation disclosure.
During the session on broker compensation, senior insurance executives will examine brokerage agreements to help attendees understand fee structures and how to negotiate service-level agreements, according to RIMS.
"We're looking forward to it," Mr. Fleming said. "RIMS is adamant that these contingency fees should be prohibited."
A third hot topic listed on the conference agenda is titled: "Corporate Governance and the 'Shareholders Bill of Rights.'"
Early indications are that federal financial services reform would provide a "Bill of Rights," which would give shareholders greater say on numerous corporate governance matters, such as executive compensation, according to RIMS.
As leaders of publicly traded companies seek to establish policies and procedures to avert the financial straits through which many companies moved over the past two years, the addition of reforms such as this would increase the spotlight on corporate governance in several respects, RIMS said.
Also on the agenda, to address the many ways the business community can manage social media risk, the Chubb Group of Insurance Companies will host an interactive, worldwide discussion during the conference, using a Web-based crowd-sourcing platform by Imaginatik.
In addition to those participating live at the conference, risk professionals can join the dialogue via computer or smartphone from any location worldwide.
The dialogue aims to identify and reduce the emerging risks businesses face as a result of Web 2.0 platforms such as Facebook, YouTube, Twitter and corporate blogs, according to Chubb.
Business professionals are encouraged to register online now at https://chubbsocialmedia.imaginatik.com.
The first 500 registrants will receive a free download of "Perfect Blue," a new album by folk-rock artist Dave Carroll.
Chubb also will award prizes to participants–including for those whose ideas generate the greatest amount of collaboration. Prizes include cash donations to charities, from $500 to $2,000, in the names of the top three scoring participants.
Overall, Mr. Fleming said conference attendance is tracking well ahead of last year–projections are up 20 percent, which should offset the dip in 2009 attendance of about 18 percent, because of the recession and restrictions on travel.
An aspect of the conference that continues to develop is enterprise risk management, according to Mr. Fleming, noting that the track was started about three years ago. "It expands every year and gets more detailed and more specific every year," he added.
A focal point of this year's conference is the 60th anniversary of RIMS. Part of the celebration, Mr. Fleming said, will involve recognizing previous leadership and milestones, as well as "looking forward, at least through the next decade, to where we want to take the Society." He said there would be more specifics on this topic at the conference.
The annual conference also will feature keynote presentations from:
o Gary Loveman–chair, president and chief executive officer of Harrah's Entertainment Inc.
o Nassim Nicholas Taleb, professor of risk engineering at the Polytechnic Institute of New York University and principal at Universal Investments.
o Rebecca Ryan, founder of Next Generation Consulting.
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