Canadian Underwriter

New risks challenge insurers and corporate clients

November 11, 2003   by Canadian Underwriter

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As Canadian businesses face a new host of risks, the applicability of insurance as the proper means to cover those risks is coming into question, according to experts from KPMG LLP.
SARS, blackouts, floods and hurricanes experienced through 2003 have put the spotlight on new risks face by the nation’s corporations, and highlighted the need for disaster planning. As well, insurance companies are less willing to cover the entirety of these new risks, leading to higher retentions, higher premiums and new exclusions/policy limits.
“Businesses today are far more sensitive to their exposure to disaster than two-to-three years ago,” says Neil Parkinson, partner in KMPG’s insurance practice. And insurance is only one alternative for transferring this risk, he adds, with many companies opting to retain larger portions if not all of certain risks.
But, perhaps more significantly, KPMG points out, businesses are looking to disaster planning and mitigation to combat these emerging risks. “What is now apparent is that the ability to recover depends not so much on the arrangements that companies put in place the day of, but rather the organization that companies make available prior to disaster,” says Mike Moszynski, senior manager at KPMG. “Getting the right people into a room to make decisions using the right information is the most important thing. It’s important to give decision makers the tools to react quickly and effectively.”

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