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The global marketplace has created a whole new set of financial risks for corporations, ranging from greater competition in emerging economies, where the rules of investment and taxation remain fluid and uncertain, to problems companies face in dealing with the media in the wake of a major accident.

Such risks cannot always be identified in advance, observed Philippe Carle, co-president of Paris-based broker CECAR. The costs become known only after the loss. "We are dealing with events that are not quantifiable and therefore not insurable," Mr. Carle said, speaking late last month at a conference in Paris, organized by SCOR Reassurance.

"The more global a basis there is for business the more we seek security," said Florence Aelion, risk manager at Lyons-based state-owned car maker Renault.

One hazard of globalization is that lack of knowledge of local conditions and indigenous companies has created large losses for some corporations investing in emerging economies. For example, many joint ventures of French companies in Asia "have resulted in only the Asian partner making a profit," Mr. Carle said.

Decisions to invest were usually made before conducting a risk assessment of the venture in question. To avoid this, companies must be active in acquiring information, Mr. Carle said.

Corporations investing overseas can also face financial exposures due to the politics of their own governments. "When France resumed nuclear tests in the Pacific, there was a call to boycott French products by many people and governments. Even large stores in Paris were subjected to bomb attacks," Mr. Carle noted.

And, it's not only in emerging countries that companies must be wary.

Financial losses that arise from a major disaster, such as fire, can snowball into even larger losses, perhaps bankrupting the company, even though it may hold business interruption insurance, according to Klaus Bocklaff, department director at Wiesbaden, Germany-based R&V Allgemeine Versicherung A.G. Reconstructing a company's damaged buildings can often take longer than the usual 12-month period provided in many business interruption insurance policies.

If toxic substances are involved, site cleanup and toxic substance disposal cause additional delays. Such matters also can cause severe public relations problems for the company if it is publicly perceived as a polluter.

"If the public turns against the company, then the government tends to do likewise," Mr. Bocklaff said.

In Germany, awareness of security and safety in corporations is limited mostly to the larger players, Mr. Bocklaff said.

"The concept of risk management has been misinterpreted for some time in Germany. Smaller companies believe that risk management is just insurance and loss prevention. Only a few small companies think that risk management should be part of the company's management," he observed.

Meanwhile, risk managers in larger multinational corporations are asking their insurers to be more flexible and are calling for longer-term, multiline, multirisk policies.

"They want more stability in terms of risk financing," noted Rick Hudson, deputy managing director of Global Risks at London-based Royal & Sun Alliance.

But the real problem is cost. "Insurers have not been good at explaining costs to clients," Mr. Hudson added. While clients have sought stability in insurance costs and policies for the past three to five years, insurers still are reluctant or even unable to provide catastrophe coverage in areas such as earthquake-prone California or Japan.

"Size is important for an insurer but large insurers are not necessarily global," noted Jacques Blondeau, chairman and chief executive officer of SCOR S.A. Mr. Blondeau was referring to large U.S. and Japanese insurers that generally concentrate on their domestic markets and lack the international expertise to provide truly global services for multinational clients.