Magazine article Risk Management

Picking Your Risk Partner: Global, Local or Both?

Magazine article Risk Management

Picking Your Risk Partner: Global, Local or Both?

Article excerpt

Global competitors need global risk management strategies, services and support. But even the largest global players need local expertise and insight as well.

Hurricane Katrina caused localized supply disruptions along the Gulf Coast, spiking energy prices around the globe and affecting every petroleum user. All businesses and organizations with operations in the Gulf region had to abandon the area for days or even weeks. One corporation that owned a New Orleans hospital was quick in sending relief supplies to the New Orleans airport, but the shipment was held up by red tape and rerouted to another airport. From there, the corporation needed locally based transportation to move it where it was needed.

The lesson? No matter how prepared they are, global competitors continually must evaluate their needs and determine which risk management resources will work best. Regardless of global leverage, a local connection is often imperative to success.

Today's risk management landscape has a few large public brokers and many mid-sized and small agents and brokers. But there is also another option: networks of affiliated independent brokers.

The benefits of affiliated risk management networks are plenty. Made up of independently owned entities operating in countries and regions around the world, this option can be a smart, safe choice for many risk managers. What follows are some of the biggest reasons why.

Innovation. The entrepreneurship of the affiliated network drives innovation, which drives best practices. Whether a broker is in Peoria, Peru or Poland, how does an affiliated network capitalize on a risk management innovation? The local affiliate allows the idea to take root. Then, it is tested by the needs of the client and the local marketplace and the innovation's merits push it forward and outward.

Financial strength. Networks typically choose affiliates based on performance criteria for the owners of those affiliates. The performance criteria include growth and size among other factors. Once chosen, affiliates periodically undergo an in-depth evaluation to ensure they continue to meet stringent qualifications including growth, creativity and professional services.

Technology. Uniform information technology systems are vital. …

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