Europeans Place Emphasis on Risk Management

Executives at European companies seem to be a bit more confident about their use of the risk management discipline than many other countries. The Federation of European Risk Management Associations’ fifth biennial benchmark surveyed 782 risk managers at companies and public organizations in 19 European countries. The following are the results:

78% of European risk managers say they believe risk management is properly embedded within their companies, according to a survey released Wednesday.
45% percent of respondents said risk management reports to the company CEO while 35% said risk management reports to the chief financial officer.
47% said the financial crisis had increased the standing of risk management within their organizations.
Concerning insurance rates, 48% said they were concerned about a “looming hard market” and one-third said they would like to lock in the price of their insurance program for the long term.
Of respondents that operate captives, 60% described Solvency II as potentially a “major issue;” 42% said they were concerned about Solvency II’s potential effects on capacity and rates.
  • 78% of European risk managers say they believe risk management is properly embedded within their companies
  • 45% percent of respondents said risk management reports to the company CEO while 35% said risk management reports to the chief financial officer
  • 47% said the financial crisis had increased the standing of risk management within their organizations
  • Concerning insurance rates, 48% said they were concerned about a “looming hard market” and one-third said they would like to lock in the price of their insurance program for the long term
  • Of respondents that operate captives, 60% described Solvency II as potentially a “major issue;” 42% said they were concerned about Solvency II’s potential effects on capacity and rates

Solvency II, also known as the “Basel for insurers” is slated to go into effect in 2012

Geoengineering the Climate

geoengineering

I was lucky enough to attend a lecture Friday afternoon at Columbia University on the topic of geoengineering. Speaking on the issue were Eli Kintisch, author of Hack the Planet — Science’s Best Hope — or Worst Nightmare — for Averting Climate Catastrophe and Scott Barrett, Lenfest-Earth Institute Professor of Natural Resource Economics, School of International and Public Affairs, Columbia University.

Geoengineering, if you are unaware, is the the term used to describe methods, or proposed methods, to deliberately alter the Earth’s climate to counteract the effect of global warming from greenhouse gas emissions. It has become a much-debated topic among scientists, environmentalists and politicians. The fact that 2009 marked the end of the warmest 10 years ever measured, only gives more credibility to global warming as a serious, worldwide problem. It also places a focus on geoengineering.

Eli Kintisch talked about the different types of potential geoengineering methods:

  1. Carbon removal: this method calls for the mixing of iron into the ocean to encourage algae growth. As algae blooms, dies or is eaten, it uses up carbon dioxide.
  2. Air capture machines: just like the name says, these enormous machines would capture air inside cylinders lined with a special substance to absorb carbon dioxide.
  3. Aerosol spraying: this method entails the spraying of sulfate aerosols into the stratosphere to reduce the amount of sunlight reaching the earth’s surface.

Of course, there are several risks that could arise from such scientific experiments.

Kintisch touched on a few, including:

  • Side effects (potentially disastrous ones)
  • The difficulty of connecting experiments to effects
  • Assigning blame
  • Could alienate the public
  • Could lead to a ban

But, as Scott Barrett stated, “the whole point of geoengineering is to reduce risk, but these things we would also carry risk. We’re in a world, unfortunately, where there is always a risk/risk tradeoff.”

Barrett also stressed that the key issue in geoengineering is governance — the question of who gets to decide if and when geoengineering should be tried. Barrett also voiced his concerns over the lack of a geoengineering protocol, reiterating that, currently, there are no rules regarding any aspect of these potential experiments, or the idea of geoengineering in general.

Clearly, there is much to be done.

But if full-scale geoengineering is too drastic or unfeasible to pull off, there are some other tech-related solutions that could help mitigate some of the world’s more dire problems.

Jeff Zucker Leaving NBC Post-Comcast Merger

NBC chief exec Jeff Zucker today told his employees that he will be leaving the network — not of his own volition — as soon as the company’s pending merger with Comcast is complete, something that is expected to occur right around the end of the year.

Even as he said he accepted the logic of a new owner seeking to install its own chief executive, Mr. Zucker also described his departure as both “incredibly emotional” and “gut-wrenching in the sense that you have spent your whole life here at NBC.”

In the face of persistent rumors that Comcast would seek to remove Mr. Zucker the first chance it got, Mr. Zucker had said in previous interviews that he had in no way foreclosed the possibility of staying on. G.E., which retained 49 percent of the company, had done its part by locking Mr. Zucker into the position, awarding him a new three-year contract seven months ago that was designed to take him into and past the takeover by Comcast.

Aaahhh … Mergers: Always messy, always difficult, always tumultuous.

Especially during the transition period, the uncertainty among employees can have a significant effect of morale, stress and, ultimately, productivity. Even Zucker himself has been unsure of the company’s direction for some time.

“Look, I knew from the day this was announced that this was a possibility,” Mr. Zucker said. “I wasn’t going to shut the door on anything. But in the last nine months it became increasingly clear that they did want to put their own team in place — and I didn’t want to end up being a guest in my own house.”

While he often faced withering criticism in Hollywood circles for his leadership of the entertainment division of the NBC network — in his note to the staff he mentioned the “ups and downs” the company had experienced — Mr. Zucker said he did not detect “any particular reason” beyond the broad desire for new leadership for Comcast’s inclination to make a change.

Change inevitably happens.

And obviously when two companies come together, there is going to be a lot of deliberation and lag time in major announcements. The process of merging is just that — a process. But companies need to know that this uncertainty can lead to a working environment that is less than optimal.

That effects all mergers. But specifically when it comes to media companies, there are a bevy of other risks involved.

In fact, we broke down the NBC/Comcast merger in our May cover story, detailing the liability, intellectual property, data security, privacy and insurance integration issues associated with a media merger.

We also took a look at the epic failure of the AOL/Time Warner merger and Google’s acquisition of YouTube.

conan obrien

Jeff Zucker’s decision to reinstall Jay Leno into The Tonight Show over Conan O’Brien will go down as one of the last stamps he put on the only company he has ever worked for.

Vote for the Best Commercial Insurance Companies

Today is your last chance to weigh in on Business Insurance‘s 2010 Readers Choice Awards for the best in commercial insurance. They have been doing the awards since 2005 and they always receive a lot of debate.

Vote now or forever hold your peace.

These were the 2009 recipients.

Do you agree with these?

Or are you looking for change in 2010?