By DAN REYNOLDS, senior editor of Risk & Insurance®
Why is the big guy the big guy?
That question came to us as we watched Greg Case, the president and CEO of Chicago-based Aon Corp., take his seat as part of a morning panel discussion at the Philadelphia All Industry Day, which was hosted March 26 by the Insurance Society of Philadelphia, local chapters of the CPCU Society, and the Delaware Valley chapter of the Risk and Insurance Management Society Inc.
Case, reasonably fresh having just gotten off a plane after visiting many parts of the civilized world, presented a five-point observation of the insurance business based on his global conversations during the event's morning insurance roundtable.
Point One is that the global quantity of risk is increasing, Case reported after having talked to personages in Spain, Australia, Asia and other locales.
"The magnitude of risk is flat-out going up," said Case.
Point Two is that the complexity of risk is increasing. Think of the fragility of global supply chains, or of the speed with which pandemics can spread from one part of the world to another. And in insurance, complexity has a multiplying factor on quantity, Case claimed.
These aren't necessarily bad things, mind you, if you make your living managing risk. Arduous, perhaps, but not negative.
Point Three is that the scrutiny has never been heavier on what risk managers and insurers do. There was plenty of worry on the executive panel at Philly I-Day--as there has been at other panels we have attended recently--that efforts to better regulate banking will sweep insurance into the mix as well.
"We don't pose the same systematic risk. Our products are not on-demand products," said Brian Dowd, the CEO, Insurance-North America, for ACE, whose comments preceded Case's on Friday's morning panel in Philadelphia.
Case's Point Four, and one he said Aon are spending plenty of money to improve, is that technologies exist to help brokers, insurers and risk managers quantify risk. Operations risk, volatility risk and balance-sheet risk are just three types of risk that can be quantified, Case said.
Point Five is that all of this represents a world of opportunity. Remember, this isn't Case telling you what he thinks in the deepness and darkness of his own mind. This is Case telling you this as a man who has the resources to travel the planet talking to insurance professionals and bringing back a road report that probably has more value than the whisperings coming from cubicles nearby in your office.
"These observations are real and compelling," said Case.
And to answer our question from above, which was: Why is the big guy the big guy? The big guy is the big guy because he sees the big picture and he keeps it simple.
March 29, 2010
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