Terrorism needs to be given a higher insurance priority, says a recent survey - but the true benefit to a client may be in what can save their life, says one expert.
“We do a lot of training seminars. Training is the most cost-effective way of dealing with risk. It stays with people,” says Mike Ackerman, president and CEO of The Ackerman Group. “Unfortunately we are in a society today that is very taken with technology – technology has its place, but it doesn’t replace training.”
A new survey of captive directors – released by
Aon Risk Solutions at the RIMS 2014 Annual Conference & Exhibition in Denver – shows that as the Terrorism Risk Insurance Act (TRIA) expiration approaches, the majority of respondents agree terrorism should be ranked higher.
Aon Risk Solutions, the global risk management business of Aon plc, notes the findings, detailed in the 2014 Underrated Threats report, highlight concerns over the top 50 key risk ranking in Aon’s 2013 Global Risk Management Survey (GRMS). More than half of respondents to underrated threat survey said a ranking of 46 was too low for terrorism risk, given the pending expiration of TRIA.
For Ackerman, who does a lot of work in hostage and extortion situations with insurance clients around the world, he cites the example of how many people view armoured cars, and how executives working in foreign countries have “fallen in love” with armoured cars. (continued.)
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“But what does an armoured car do for you exactly?” Ackerman asked Insurance Business. “It buys you time to make an escape, a quick escape from assault. So if you have people with AK-47s that are assaulting your vehicle, it would take them if they know what they are doing and can group their shots, it would take them about five seconds to shoot through an armoured car.
“Those five seconds can be crucial – if your driver knows what he’s doing. If he is exquisitely trained to escape from the situation.”
A smarter solution – and better advice for a top-flight client – is to present a low profile.
“Given the choice of sitting in the back seat of an armoured Mercedes, or sitting in a Toyota, I’ll take the Toyota every time” says Ackerman. “I just want to get around as anonymously as possible.”
The survey gathered input from 1,415 respondents – including risk managers, chief financial officers and CEOs – from 70 countries and from companies of all sizes. GRMS ranks the top five risk as follows:
• economic slowdown/slow recovery;
• regulatory/legislative changes;
• increasing competition;
• damage to reputation/brand;
• failure to attract or retain top talent;
Terrorism/sabotage was ranked 46.
“It is barely conceivable that a little over a decade after one of the most impactful risk events in recent world history, the ranking for terrorism is so low,” states the report. “The sad truth is that terrorism attacks are not confined to politically or economically unstable regions. They can happen anywhere, anytime and without reason, but their horrible commonality is that the results are almost always devastating.”
Asked if respondents are surprised terrorism/sabotage is ranked at 46, 52 per cent said yes, absolutely; 40 per cent said no, not really; and 7 per cent were unsure.
The RIMS 2014 Annual Conference & Exhibition runs from Apr. 27-30. The RIMS Canada conference will be held in Winnipeg, Man. this year in September.
