Under the long-term coinsurance program established by M200, members created a layer of coverage for their most crucial insurance need by accessing the net capacity of insurers and reinsurers. That way, corporations weren't subject to the ups and downs of the insurance and reinsurance markets.
These companies, such as Asea Brown Boveri, got the guaranteed, although pricey, coverage they sought.
"We ran this program for seven years until the market fell apart and regular insurance became so cheap," says Paul York, the M200 founding member who put the program together while at ABB as vice president of risk management. "It was expensive--you pay for quality--but we gained double-A and triple-A credits as a result, and it was well worthwhile."
M200 members agree there's no reason successes like these can't keep on coming as long as the group retains the meeting format it has had from the get-go--and continues to both limit the total size of its membership and keep a close eye on whom it admits.
"The M200 was an instant success--and remains so," says Herbert M. Harrell, 60, the group's founder, who has no formal title but runs M200's day-to-day affairs out of his Alexandria, Va.-based offices as a "consultant" to the group. "It took blood, tears, toil and sweat to get the M200 going; before it existed, it was beyond most people's power of imagination," he says.
Most members of M200 are no less passionate. "There's no question that we've had a positive influence on the risk management profession and insurance and reinsurance marketplaces," says Paul McDonald, director of group risk management at London-based BAE Systems and a member of M200's policy board. "That's because wherever you look around the world, we have a core of individuals who are advocates for best practices. In some ways we're pushing the boundaries for the insurance model."
"In the end I would prefer to focus on M200 rather than other risk associations and groups," says James D. Noble, vice president of risk management and insurance at Colgate-Palmolive Co. in New York. "In terms of logistics we feel it's more global."
December 1, 2005
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