By DAN REYNOLDS, managing editor of Risk & Insurance®
It's no secret that the size of risk management departments are on the decline and have been on the decline for a while. Meanwhile, the interconnectivity of economies and of risk is increasing daily.
We also know that insurance can't cover everything, especially in the burgeoning area of supply-chain risk, and neither should it try. Adding to the drama is that cyber and reputational risks seem to be leaping ahead of the business world's ability to manage them.
The good news in general -- and the good news for FM Global in particular -- is that just as technology presents risks, technology presents solutions. Insurers and their risk management partners are finding more and more solace, when they can find solace, in their ability to collect, analyze and act on data -- if it is good data. And it is in this context that FM Global Chairman and CEO Shivan Subramaniam thinks he has something.
Subramaniam, the leader of a firm with a strong engineering focus, said FM Global is walking into a sweet spot as more and more companies depend on data collection and analysis to help them navigate the world of risk and communicate that risk threat among company officers.
He said that is where his technology-strong firm has an advantage.
"Technology enables risk managers to aggregate and analyze information faster and so there is a whole bunch of things that risk managers can do now that they couldn't do 25 years ago," Subramaniam said during a sit-down talk with Risk & Insurance® at the Risk and Insurance Management Society Inc.'s annual conference and exhibition in Philadelphia in mid-April.
"FM Global is an engineering-based property insurer focused on loss prevention and our competitors are actuarially focused," Subramaniam said, to build on his point.
"Two very, very different models," he said.
"The reality is FM Global and our competitors offer clients two very different underwriting and service offerings," Subramaniam said.
The business property insurance leader announced in late March that it had ended 2011 with $5.1 billion in gross premium, an increase of 5.4 percent over the previous year.
With the supply chain lessons of Japan and Thailand fresh in everyone's memory, Subramaniam said the time is now for risk managers to sell the importance of their increased ability to collect, manage and interpret data to the rest of their organizations.
"Risk managers need to strike while the iron is hot," he said.
"Looking at the impact 2011 catastrophes had on many company's supply chains, they have some great examples in the last six to nine months," he said.
For its part, on the management side, FM Global is making moves to better align with the business needs of its insureds.
Subramaniam points to the upcoming transfer of a senior management official to Singapore as an example of how the company is moving to address the needs of its Fortune 1000 customers who are investing more and more in Asia and Australia.
"Every one of them has new territories," he said, "and we are recognizing this is where the clients are."
May 1, 2012
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