Academic journal article Journal of Risk and Insurance

The Global Environment of Insurance

Academic journal article Journal of Risk and Insurance

The Global Environment of Insurance

Article excerpt

The Global Environment of Insurance, coordinated by Leonard J. Watson, 1999, New York: The McGraw-Hill Companies, Inc.

Reviewer: Karl C. Ennsfellner, Vienna University of Economics and Business Administration, Austria

The increasing international and global exposure of the insurance industry of the United States motivated the Insurance Institute of America to produce a textbook with an international focus. The objective of this text is to provide an overview of the global environment of insurance, thus helping to prepare managers for their international responsibilities.

To achieve this objective, the authors and coordinators combine source materials from selected chapters of two other books; add material and create a new, customized text responding to requirements revealed by a survey, done by the CPCU Society's International Interest Section before the book was written. The survey showed that 15 subjects should be covered-leading to the text's 15 chapters. The source material for four chapters is taken exclusively from the book International Business: The Challenge of Global Competition, by Donald Ball and Wendell McCulloch, while the source material for five chapters originates from Harold Skipper's text International Risk and Insurance. The source material for one chapter is taken from both texts, one chapter has been written by Leonard Watson, one by Dale Gianturco, and one chapter by Leonard Watson in cooperation with Albert Camardella, and two chapters are co-authored by Leonard Watson and Dominic Davison-Jenkins.

Chapter One provides an excellent introduction to the global aspects of the risk management process. It explains why it is necessary to concentrate on the international aspects of risk management. Beginning with a historical overview of global trade, Chapter One discusses the reasons organizations become increasingly international and shows the different approaches to international activities. A brief history of insurance leads the attention of the reader to the importance of the role of insurance in risk management. Then the text suggests a framework to assist risk managers in evaluating global risks, with the identification of the exposed location as the first step, the identification of differences in the five primary forces affecting each country involved as the second step, and the application of the risk management process as the final element.

Chapters Two through Six deal with the five forces that form the environment of the insurance business in different countries. Chapter Two concentrates on the economic and socioeconomic factors. The reader learns which economic indicators to use but also how to use them in the process of decision making and how to avoid misinterpretations. At the same time, this chapter provides a rich impression of the world's most important problems regarding the economic environment of insurance markets, thus helping the reader to understand international differences in the global marketplace. Chapter Three explains the consequences of location, topography, climate, and natural resources for businesses and products, while Chapter Four is packed with information on sociocultural forces in various countries. Chapter Four helps the reader to understand the significance of culture for international business as well as showing the significance of religion to businesspeople. It discusses the importance of the ability to speak local languages and presents Hofstede's four cultural value dimensions.

Chapter Five provides an indication of the types of risks to private businesses resulting from political forces. It describes the major political ideologies, examines government ownership of businesses, and deals with the trend towards privatization. Terrorism is also discussed in the chapter; it also gives advice on how to minimize risks of being a victim of a terrorist attack while abroad. The chapter ends by providing an introduction to country risk assessments. …

Author Advanced search


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.