Daily Market Update - July 7, 2014

​Risk management is at the heart of a revision of international environment standard… Big business focuses on risk… Insurers support new code of practice… Australian government introduces ‘across the board’ risk management policy… And UK insurance body criticizes weakened indemnity policies for lawyers…

Risk Management News


Risk management key focus of revised international standard
The ISO (International Organization for Standardization) has begun a consultation period on ISO 14001, one of the most widely used standards for managing environmental impact. Central to the new standard is greater focus on risk management and ensuring that leaders within organizations promote environmental management. The ISO standard is seen as highly important in setting goals for companies in managing their environmental impact, and for ensuring compliance in an ever- increasing area of concern. Read the full story.

Big business focus on risk
Big business in South Korea, which includes some of the world’s biggest brands, are increasing the importance of risk management in their companies. The Federation of Korean Industries says that at the end of last year only 10 per cent of the businesses they surveyed were looking to consider moves to create greater stability and manage risk. Now that figure is 80 per cent. Economic and management-related risks are the top concerns among the businesses, which include names like Samsung, Hyundai and and LG. Read the full story.

Insurers support code of practice
Insurance professionals in Australia and New Zealand have been showing great interest in an ‘update’ course following a new code of practice launched by the Insurance Council of Australia. With the industry keen to avoid government regulations it’s important that there is a genuine willingness to ensure that self regulation can work. The Australian and New Zealand Institute of Insurance and Finance says it has received ‘unprecedented interest’ in its course to bring professionals up to speed on the new code, even though they have a year to ensure compliance. Read the full story.

Life insurance for children raises concerns
Parents buying life insurance are often insuring their own lives to protect their children if the worst should happen. Those insuring the lives of their children are a very small part of the market, however in the past week this kind of cover has made the news in tragic circumstances. USA Today reports that a man in Georgia was in court accused of killing his 2 year old son from leaving him in a hot car; the child’s life was insured for a total of $27,000. The insurance was mentioned in the case, but was not a key part of the prosecution. Less than 1 per cent of the life insurance market is for child policies and many feel uneasy at the idea. Etti Baranoff, associate professor of insurance at Virginia Commonwealth University, added, "The nature of life insurance is to provide for economic security if the parent dies, not the other way around." Read the full story.

Australian government introduce risk management policy for staff
The Australian government has introduced their Commonwealth Risk Management Policy which applies across all areas of government. The aim is to ensure uniformity of risk management procedures including making it clear who is responsible for particular risks. The government says that it is important to have strong risk management policy because apart from the obvious benefits to the organisation, it helps with productivity. They are keen that ministers, officials and staff engage with risk management in a positive way and their insurer Comcover will be working with officials to ensure best working practice. Read the full policy.

UK insurance body reacts to weaker indemnity cover for lawyers
Commenting on the decision by the UK’s Solicitors Regulation Authority to reduce the level of professional indemnity insurance solicitors are required to have, James Dalton, the ABI’s Head of Liability Insurance said: “Reducing the minimum level of PII cover for solicitors does not change the risk profile of the firm and only increases the risks to consumers if things go work. Consumers will end up paying the price because the SRA thinks solicitors should save money rather than protect consumers. The SRA is misguided in thinking that lowering the limit will lead to a meaningful reduction in premiums for small firms.

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