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Certificate insurance of the international risks

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A damage concerning a business will generate a domino effect. Its partners will be directly and indirectly affected. In a post-industrial society, the actors are less autonomous than before (service organization). There are many more dependencies between customers and suppliers. Thus any failure in one has implications for others.

The damage caused by an event is more expensive. The concentration of the population and the capital has significant effects. Thus, some estimates show that the damage of a hypothetical earthquake in Beijing costs around 100 billion dollars.

This concentration value is evident on container ships that can carry up to 13,000 containers whose unit value is between 100000 dollars and 150000 dollars. The disengagement of the state: Governments are trying to move away from risk. Financial costs have become too much. The precautionary principle enshrined in the constitution is a way to offload responsibility on players of the society.

But the state is always involved in many areas like terrorism, for example. Disengagement benefits insurance companies, as the state wants to avoid random compensation/

As a result of significant loss for businesses, therefore, to avoid an incident turns against them. The reaction of shareholders has a leverage effect on the losses associated with the incident, because they added to the stock price that made it go in to a decline. The paradox is that it is also the return required by shareholders who questions the policy of risk prevention.

In addition, the media amplifies their risk perception by different actors. Perrier's misadventure after the discovery of benzene in some bottles is an example. Today one is in a world where the anticipation of the threat leads to economic responses even though the risk did not occur.

It peaked in the U.S. where it is difficult to control the popular diktat . The class-action would have increased by 10% of processing claims. The amount of penalties to RC and the EU is even a barrier to entry for SMEs. This particularly affects insurers as they are often regarded as the "Deep Pocket" to the EU.

The consequence of the two previous points is the need for the company to treat product quality and environmental products. The quality must be beyond reproach and requires the establishment, by design, quality management systems of the product. As for the environmental product (advertising and printed materials) must be approved by lawyers.

For the risk manager within the company, the problem is to take note of the customer and the perception of risk. His responsibility is important in defining the likely risks. It is always to deepen the field of knowledge. The failure of a party or event can have serious economic consequences. It is also evaluating the best solution in terms of coverage (list of risks to be insured, captive insurance, risk reduction).

Tags: International risks; consequences; certificate of insurance; precautionary principle;

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