GLOBAL RISKS PANEL'S PRIORITYPosted On: Oct. 19, 1997 12:00 AM CST
MONTE CARLO, Monaco-Access to information about overseas exposures, variations in health and safety practices and international fraud are among the most pressing issues for risk managers of multinational companies.
That was the conclusion of a roundtable discussion on international risk management held as part of the recent Risk Management Forum in Monte Carlo, Monaco, co-sponsored by the Federation of European Risk Management Assns. and the Risk & Insurance Management Society Inc. of the United States and Canada.
More than a dozen risk managers from European companies outlined problems and came up with steps that might help in addressing them. Sharing information was a common denominator mentioned to help solve the problems.
Other "hot topics" they identified included international crisis management, business interruption, the Year 2000 computer problem, the establishment of a single European currency and the international risk management implications of mergers and acquisitions in the insurance industry.
Risk managers discussed the legal, risk and risk financing issues of health and safety variations, especially in Europe. One suggested a summary of the different practices across European countries be made available to multinational risk managers.
Cross-border fraud, with an emphasis on the problems that organizations face when they try to recover any assets, also
worries risk managers of multi-nationals. Speaking from experience, one risk manager said that international law enforcement agencies such as Interpol "can't contribute to any of these problems."
International crisis management also proved a headache to a number of the risk managers present. Crisis management in one's home country is not a problem, commented one, because the risk manager knows what to do and what services are available. But the situation can be different overseas, and often the risk manager has little knowledge of the crisis management resources in other territories.
Business interruption practices in different countries-and consequently the sums insured for such claims-vary widely, and the delegates said they need more information on the variations. Often local companies will have different meanings for reinstatement costs, risk managers at the session said, and this can compound problems for the organization.
Although Europe for a number of years has permitted companies to trade across borders without needing an office in each country, risk managers said the freedom of services regulations need to be clarified.
As in the United States, the Year 2000 problem, or "millennium bug," concerned the delegates attending the roundtable. Everybody recognizes countries are at different stages of reviewing their computer systems and hopes their decisions will prevent catastro-phic collapses when the date changes to 2000, but the risk managers want more information on just what has been done.
In addition, if the fixes in place by the end of the century do not work, what are the contingency plans, asked a risk manager. Another questioned the availability of insurance coverage and the exclusions that may result in exposures.
Almost in the same breath, the issue of European Economic and Monetary Union arose. Cost expectations for implementing a single currency across European countries, the planning needs for successfully putting EMU into place and the contingency requirements should an organization not be prepared for EMU when it happens all concern risk managers, they said.
Plenty of information on all these subjects is available, pointed out a number of the risk managers present. It's more a case of being able to identify a source.
Roundtable moderator Paul Taylor, corporate risk manager with NFC P.L.C. in London and chairman of the special interests group on international committee at the U.K. Assn. of Insurance & Risk Managers, suggested that a formal or informal network be set up across Europe. Perhaps AIRMIC and its French equivalent, Assn. pour le Management des Risques et des Assurances de l'Entreprise, could hold joint meetings, said Mr. Taylor, a member of both organizations. However, his idea met with little enthusiasm.
Alternatively, the various countries' risk management associations could swap membership lists and expertise lists, or identify expert contacts in each country for risk managers to access for information on specific subjects.
Mr. Taylor's final suggestion was that the issues that had been identified by the roundtable audience should be raised in each of the national risk management organizations, with the resulting information collated and distributed to the other organizations.