About Caroline McDonald

Caroline McDonald is a writer and former senior editor of the Risk Management Monitor and Risk Management magazine.
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Low Insurance Impact Expected from Haiyan

Damage in the Philippines from Typhoon Haiyan is widespread, with new information emerging daily. Insured losses, however, are expected to be low, with the greatest impact on smaller reinsurers, according to insurance industry reports.

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A.M. Best said in a briefing that it expects insured losses to be minimal, as non-life insurance is less than 1% of the country’s gross domestic product.

“Insured losses in the Philippines will be spread across many segments, including per­sonal lines, fire and property, and marine hull. Fire/property and marine hull will be well reinsured through the major global reinsurers and through Lloyd’s, which will also absorb some marine losses on a primary basis. Net losses to primary insurers will be limited, and some commercial losses also may be covered through captives or other forms of self-insurance,” the report said.

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A.M. Best expects Haiyan to be an “earnings event for reinsurers” – more substantial for smaller, regional reinsurers. While it is expected to have minor impact on larger global companies, it is “yet another loss on top of recent catastrophes in Europe.”

In an update, Dr. Robert Hartwig of the Insurance Information Institute said that economic damages will be significant, with Haiyan having a “major negative impact on the Philippine economy.”

He noted two reasons why insured losses from Haiyan are likely to be low:

• The storm did not have a direct impact on Manila, the capital and largest city in the Philippines, well to the north of the track of Typhoon Haiyan.

• The Philippines is a small market for property/casualty insurance, with premiums of just $1.23 billion written in 2012. This amounts to $12.70 per person, compared to $1,223.90 per person in the U.S. “Even compared with the rest of Asia, the penetration of insurance in the Philippines is relatively low,” Hartwig said in the report, adding that per capita premiums in Asia were $91.90 in 2012.

In 2012 the Philippine’s GDP per capital was ranked 124th out of 184 countries by the International Monetary Fund, he said. The Philippine economy has grown steadily, however—at an annual rate of 7.

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5% as of the second-quarter of 2013—and should become better insured in the future.

Philippines Life and Nonlife Insurance Premiums, 2012

 

Direct premiums written

Nonlife premiums *

$1,231

Life premiums

$2,265

Total premiums

$3,496

Percent of total world premiums

0.08%

* Includes accident and health insurance.

Source: Swiss Re, sigma, No. 3/2013.

CFOs More Confident About Risk Management

Nearly two-thirds of CFOs are more confident in their ability to manage risk, with 25% reporting an increased appetite for risk, according to a new national survey from TD Bank.

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A number of respondents said their organizations have managed risk proactively since 2008 through internal controls and procedures and increased accountability.

“What we’re seeing, both through this survey and in our interactions with clients, is a more positive outlook about the economic environment and the business opportunities coming out of the recession,” Greg Braca, executive vice president and head of corporate and specialty banking at TD Bank said in a statement. “Well over a third of the CFOs surveyed expressed that they’re more confident in the U.

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S. economy, and more than half viewed their organizations’ prospects in the same vein. CFOs feel better equipped to manage risk, which will enable them to take a more active approach to investing and expansion, even if the economy improves at a slower pace than we’d like.”

CFOs are also apprehensive about the regulatory climate, with more than a third of respondents indicating that regulation is a top concern going forward.

The survey was conducted in September and October 2013 by ORC International.

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A total of 150 executives were surveyed, half at companies with annual sales of $50 million to less than $250 million (middle-market) and half at companies with annual sales greater than $250 million (corporate).

Security a Focus after N.J. Mall Shooting

The most recent mall shooting, just a few days ago at the Garden State Plaza in N.J., again heightened the focus on risk management and security nationwide.

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Parents have trusted that malls would be safe for teenagers to meet with friends, but places for public gathering can become targets for violence. The pressure is on for organizations to examine their security measures and contingency plans.

David Boehm, with Security USA said in an interview with CBS New York that the U.S. can learn from security experts in Israel. Similar to Israel, he said, our country heading in the direction of having officers stationed at entrances and exits to malls.

In an article written for Security Management, Donald W. Story, a former police chief and director of corporate security for two major shopping center developers observed that if even one shopping center is targeted in the U.S., all malls will be seen as unsafe. The public will need to be reassured, and “for that reason, it is imperative that every mall manager begin to think about how security should respond to an attack.”

The Israeli model offers lessons for U.S. malls in contingency planning, he said, adding that shopping malls, considered “soft targets” in Israel, are monitored externally by motorized and foot patrols. Vehicles entering mall property are subject to search, as are people entering malls. To do this, officers use explosion detection technology, including bomb sniffing dogs, he said, adding that unlike many mall security guards in the U.

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S., all Israeli security are armed.

Going by the Israeli model, contingency plans should be incorporated and implemented only if a heightened security posture is needed, he said.

Good contingency plans should examine coverage of the shopping mall, access, reassignment of staff’s tasks and deliveries and contractors in case of an emergency, Story said. Preventative measures should also be in place.

Because obtaining additional security officers and relying on local police for assistance might be difficult, an option would be for security officers and other staff to work longer shifts under predetermined circumstances, Story said.

The plan should address shopping center access, under what circumstances the mall would heighten control over entry, and how this would be done. Since many malls would not have adequate staffing to monitor all entrances, for example, the plan might call for closing some entrances under an elevated threat level.

Similarly, the safety plan should determine under what conditions the use of explosive-scanning technology and/or bomb-sniffing dogs would be warranted—and how this equipment would be obtained in an emergency.

Because officers would be taken from their normal duties during an emergency, minor security tasks could instead be completed by management, operations or housekeeping staffs.

Deliveries should be restricted to specific time periods when the appropriate employees are available to verify documentation, he said. Contractors, their supplies and materials should also be checked.

Officers would need to be trained to recognize certain behaviors and intercept potential terrorists. Story said they would also need instruction on proper procedures for making these assessments without being accused of profiling.

He added that some mall properties have already taken moderate and inexpensive steps to tighten mall security. Those include fire lane parking enforcement, visible waste containers, limited and guarded access to roof hatches and closer monitoring of deliveries and contractors. The Garden State Plaza, which has been praised for its preparedness, instituted security training on Sundays when the mall is closed. Shop owners also followed protocol, locking customers inside stores for safety.

The Cost of Workplace Bias

There are many costs associated with workplace harassment and discrimination—monetary, reputational and the morale of employees to name a few. In 2012, the U.S. Equal Employment Opportunity Commission (EEOC) reported filing 122 lawsuits including 86 individual suits, 26 multiple-victim suits (with fewer than 20 victims) and 10 systemic suits. The EEOC’s legal staff resolved 254 lawsuits for total monetary recovery of $44.2 million.

The agency added that it secured monetary and non-monetary benefits for more than 23,446 people through administrative enforcement. These methods include mediation, settlements, conciliation and withdrawals with benefits. The number of charges resolved through successful conciliation, the last step in the EEOC administrative process before litigation, increased by 18% over 2011.

Harassment & Discrimination: Do You Know the REAL Impact?
By The Network Inc., the leader in providing integrated ethics, risk and compliance solutions

Read more: http://www.tnwinc.com/solutions/discrimination-and-harassment/infographic-workplace-harassment-training/#ixzz2jDmSPiiH