|By Green, Paula|
Premiums for most insurable company risks have come down in price, but organizations will need to ensure that they have sufficient coverage and limits to deal with an increasing range of issues-including changes in regulations and legislation.
Risk managers should have no problem finding ample capacity and stable prices this year as they seal insurance contracts meant to secure their company's reputation, financial assets and property. But whether securing cover for managers or manufacturing plants, or a crucial financial buffer against potentially costly liability claims, risk managers face greater scrutiny from government officials around the world.
<p>"Countries are enforcing rules and regulations," says
By not complying with local regulatory regimes, companies can expose themselves to fines or time-consuming tax investigations or even significant reputational damage. "And in the current climate, tax authorities are increasingly diligent in monitoring tax revenues from insurance programs," adds Condie.
Most multinationals spread round the globe use a controlled master program to work with a global insurer and broker to ensure that their liabilities and property are properly covered. A global insurer will underwrite local policies in the countries in which it is admitted or licensed to do business.
But global insurers are not admitted into every country in which their clients operate, and for certain lines of compulsory insurance, such as auto liability and employees' liability-known as workers' compensation insurance in
That's where insurance purchasing can become tricky, says Burns, as there is the risk of fines and penalties. "And then there's the reputational risk to deal with if you're not following regulations."
FM Global is well placed to witness challenges in emerging markets as it writes commercial and industrial property insurance in 130 countries. Its global reach has seen the
According to a recent survey carried out by German insurer
The third annual survey gathered insights from 400 corporate insurance experts working at
Gage agrees that risks are emerging on every front for multinationals: operational, financial, social, environmental, technical and political. While environmental-based risks have been around for many years, the frequency and severity of extreme weather events such as tsunamis, hurricanes and floods means these risks have to be more actively managed than in the past.
"Economic issues are always out there creating uncertainty," says Snow, who is also president of the
Industry experts agree that in the overall property and casualty insurance market, surplus capacity and capital is driving fierce competition among insurers and, increasingly, creating a buyer's market.
Cyberrisk insurance may be the only area in which risk managers might run into capacity restriction and higher premium prices. "Given the increased dependency on technology and the interconnected nature of business and government today, the impact of cybercrimes can be significant," says Gage."More products are available. However, capacity is still a concern as more small and midsize businesses purchase the coverage."
Otherwise, multinational risk managers will find reduced premiums in most markets, including
The ample coverage and stable pricing in today's market means risk officers are zeroing in on their coverage details and the claims-paying reputation of their insurer. "There's less concern on price. The shift is,'Do I have adequate coverage and limits,"'says Hall of FM Global. *
|Copyright:||(c) 2014 Global Finance Media Inc.|
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