ACE Report: Imagination is the Key
to Proactive Catastrophe Management
BY ANYA KHALAMAYZER
AS BUSINESSES develop globally, risks multiply exponentially— and in response, ACE USA has
published the “Global Catastrophe
Guide: New Challenges to Casualty
Risk Management,” which outlines
the enormous perils faced by risk
managers within the U.S. and beyond
its borders.
Part of the ACE Progress Reports
collection and co-authored by Lori
Brassell-Cicchini, vice president of ESIS
Catastrophe Services; Connie Germano,
senior vice president of ACE Express
Casualty; and Carol Laufer, executive
vice president of ACE Excess Casualty,
the white paper addresses a range of
catastrophic events and details how risk
managers can protect their investments both
by demonstrating a culture of compliance
with existing regulations and by proactively
shaping their insurance programs.
“Companies that proactively develop
and test a catastrophe-management plan
have an advantage,” Brassell-Cicchini
says. “When a disaster occurs, they can
be completely focused on executing that
plan and managing the intricacies of crisis
communications. This can make or break a
company’s reputation, especially in today’s
world of sound bites and social-media
networks.”
Large companies already engage in many
of the risk-management practices that would
help them stay ahead of emerging risks, the
report notes, including maintaining accident-
reporting procedures and compliance
hotlines as well as regularly reviewing their
accident statistics and loss runs.
But they often miss the warning signs of
the next catastrophe, ACE says, not because
of a lack of data but because of what the
report calls “a failure of imagination”—the
inability to see the risks that could emerge
outside their comfort zone.
HOW BAD COULD IT GET?
U.S. overseas investment has grown from
$270.5 billion in 1986 to $3.9 trillion
in 2010, the report notes—a period in
which the world has been reshaped by
technological advancements, global trade
and a host of novel dangers.
SHIFT TO A PROACTIVE MODEL
The best-prepared company, the report
asserts, is proactive and self-regulates
before an outside agency becomes
involved; protects itself with a compliant
insurance program; creates a catastrophe-management plan that is well-known
throughout the corporation; and is not
afraid to admit fault, should an accident
occur.
These companies establish relationships
with local law agencies, medical experts and
reconstruction experts.
“Proactive companies invest time
and money in self-regulation, and their
investment can have many positive
effects,” says Germano. “A strong culture
of compliance may improve a company’s
defensive position during and after a
catastrophe and reduce the likelihood of
onerous reactive regulations.”
These relationships, along with efficient
post-event communication, combine to
create the influential leverage needed to
respond to catastrophes quickly and to
effectively reduce the overall consequences
of a disaster, the report adds. NU
