Magazine article Risk Management

Japanese Risk Management

Magazine article Risk Management

Japanese Risk Management

Article excerpt

According to a recent Tillinghast-Towers Perrin study,the risk management practice in Japan apparently lags behind that of other industrialized nations. The survey of 595 Japanese companies reveals that, on average, their knowledge and implementation of key concepts and programs do not measure up to current standards.

These shortcomings are particularly evident in the area of self insurance. For example, only 12 percent of the respondents own captive insurance companies, compared to the U.S. Fortune 500 company average of 50 percent. Twenty-one percent, however, express a strong interest in captive ownership if it would help their business.

"Only forty percent of Japanese respondent companies currently have a staff function dedicated specifically to insurance," reports Hiroyki Takahashi, a Tokyo-based senior consultant for Tillinghast. "Most Japanese companies assign the insurance responsibility to either administration or treasury/accounting, rather than to a separate risk management function.

"While our companies have been slow to increase their level of self insurance, we expect this to change as the potential cost savings are recognized and companies become more comfortable with their ability to take on risk," he adds. …

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