About Emily Holbrook

Emily Holbrook is a former editor of the Risk Management Monitor and Risk Management magazine. You can read more of her writing at EmilyHolbrook.com.
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Volcanic Eruption Disrupts Airlines and Business Again

The Grimsvotn volcano, Iceland’s most active, began erupting Saturday, sending large plumes of ash into the atmosphere and halting air traffic in the region. As of this morning, Iceland’s main airport in Reykjavik remained closed while airlines and airports across Europe brace for possible disruptions. This brings back unpleasant memories of last year’s volcanic eruption as Europe clings to hope that the effect will not be nearly as dreadful.

Officials appeared to be responding to the ash with a radically different approach than last year, when European aviation authorities were sharply criticized for closing large swathes of airspace in response to the April 2010 eruption of another Icelandic volcano. Many airlines said authorities overestimated the danger to planes from the abrasive ash, and overreacted by closing airspace for five days. Thousands of flights were grounded, airlines lost millions of dollars and millions of travelers were stranded, many sleeping on airport floors across northern Europe.

Though meteorological officials predicted the ash to miss the European mainland, recent news reports claim that the Civil Aviation Authority expects disruption to UK flights.

We here at the Monitor followed last year’s eruption of the Eyjafjallajökull volcano very closely, posting about it’s amazing power with pics and video, about airports closing and how it was one of the top 10 disasters of the past decade, according to Zurich.

Stay tuned as we continue to post about Grimsvotn’s most powerful eruption in 100 years and its effects on travel and business. And visit The Atlantic for some amazing images of the eruption.

News Desk

There are times when we search fruitlessly for a news piece to inspire a blog post good enough for you readers. And then there are the rare times when we log on to various news sites and are inundated with headlines relating to this industry. Today is one of those days.

  • It looks like Munich Re has gotten itself into some hot water over a raunchy party hosted by Munich Re-owned Ergo Insurance. Though the party was held back in 2007, the reinsurance giant is still feeling the reputational sting (and likely will for a long time to come) over a party that rewarded top salesmen with prostitutes. The management in charge of organizing that event are no longer employed at Ergo.
  • There were about 100 guests and 20 prostitutes were hired. A German business newspaper said the prostitutes had worn colour-coded arm-bands designating their availability, and the women had their arms stamped after each service rendered.

  • On the completely opposite side of the spectrum, it was announced today that executives at Lloyds Banking Group will be handing back bonuses. This is due to the ₤3.2 billion hit the bank took for “mis-selling payment protection insurance.”
  • In the world of insurance rates, Hardy Underwriting Bermuda Ltd. reports that insurance and reinsurance that renewed during the first quarter of the year saw “average rate increases of 1.5%.”
  • This morning, I stumbled across this management blog, which proves to be quite the resource for managers in any industry, listing the 50 people to follow on Twitter that will provide you with a windfall of information to help you succeed.

Cavalcade of Risk #131: All Things Risk

Welcome to the Cavalcade of Risk blog carnival, an aggregation of some of the best risk management and insurance-related blog posts out there. Before I get to the rundown of posts, thanks go out to David E. Williams at Health Business Blog for his insightful hosting of Cavalcade of Risk #130.

  • Let us begin with Dave Ingram‘s post regarding risk management entertainment systems (RMES), where he states, “The Risk Management Entertainment Systems create a very strong impression that ERM is a talking and paper shuffling activity.  A waste of scarce corporate time, resources and dollars. ERM needs to be about action.  If in the end, ERM does not result in any changes to a firm’s treatment of risks or selection of risks, then there was no real business reason for ERM.”
  • Claire Wilkinson writes about protecting your personal information on Terms + Conditions, the Insurance Information Institute’s blog regarding all things risk and insurance. She states, “the average organizational cost of a data breach increased to $7.2 million in 2010 and cost companies an average of $214 per compromised record up from $204 in 2009.”

And a few more from around the blogoshpere:

The next host is Russell Hutchinson at Chatswood Consulting — he’ll host the 5th anniversary edition of Cavalcade of Risk on June 1st. Don’t miss it!

UPDATE: Zurich Talks “Ring of Fire” at RIMS 2011

(This post now include a video of the presentation given at RIMS 2011–definitely worth a view)

Zurich held a press conference this morning regarding a topic that has been in recent news more time than we would like — earthquakes. In “Epicenter Pacific Coast,” three CEOs from Zurich and one geologist from Simon Fraser University discussed the risk of a major earthquake in the United States and what can be done to prepare for such an event.

Mike Kerner, CEO of Zurich Global Corporate in North America, stressed the importance that individuals and companies in the States know:

  • Their exposures, and all of them
  • Are informed of risk engineering
  • Acknowledge that traditional policies may not cover all losses
  • What you can’t mitigate, insure
  • Understand specific policy terms (for example, the definition of “tsunami”)

Brent Ward, quaternary geologist professor, discussed the “ring of fire” that is known for being an earthquake hotspot — approximately 90% of all earthquakes occur in the ring of fire.

Ward stated that the Pacific Northwest, which lies within the ring of fire zone, has a similar configuration as that of Japan and Chile, where two of the worst earthquakes in history have recently struck.

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“On average, a major earthquake of 9.0 magnitude or greater only happens every 500 to 600 years in the United States, but when it happens, it’s going to be bad,” Ward said.

Following Ward, Mike Foley, CEO of Zurich North America Commercial, mentioned the frequency with which the world has experienced horrific natural disasters, especially in the populated ring of fire area. “Four of the five costliest quakes in the past 30 years occurred in the last 13 months along the ring of fire,” Foley said.

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“While we can’t predict, we can prepare.”