IRMI Update—Issue #140
An E-mail Newsletter for Risk and
Insurance Professionals
ISSN: 1530-7948
July 12, 2006
In This Issue
Colleague,
At the annual RIMS conference in April, the results of "Chubb's
2006 Loss Control Spending Survey" were released. Based on responses
from more than 125 risk managers, the survey contained some good
news.
-
95% said their organizations would spend the
same amount or more on loss control in 2006 as they
did in 2005.
-
Disaster preparedness, catastrophe management,
and business continuation were at the top of the
list of areas where spending was to be increased.
-
Corporate governance was also at the top of the
list.
On the one hand, I am relieved that business continuity is a
major focus of the risk management community. Disaster preparedness
will pay off in a big way when an organization is hit by a major
natural or man-made disaster. You don't have to have been a long-time
subscriber to IRMI Update to know this is one of my hot buttons.
The work on corporate governance issues is also a good thing that
should reduce the potential for more "management-made" disasters,
such as the one that killed ENRON.
But, on the other hand, seeing the reactionary nature of loss
control spending by corporate America is also disturbing. It reminds
me of the old insurance joke about the blindfolded underwriter racing
an auto down a superhighway while the actuary, looking out the back
window, tells him which way to steer. Letting past events guide
our risk management programs will sooner or later cause us to be
blindsided by something that has never happened before.
Are we, as risk professionals, being as proactive as we should
be? Or are we just reacting to what has happened in the past? Is
this a problem with the risk management community, or is the problem
in the executive suite? Is senior management simply opposed to spending
on preventative measures in areas without some precedent for past
losses? If the latter, is this because we are not properly communicating
with them about risk? [See
reader
responses.]
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Thank you for subscribing to IRMI Update and recommending it
to your colleagues in the industry.
Have a great day.
Jack
Jack P. Gibson, CPCU, CRIS, ARM
President
IRMI
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