IFRIMA Members Furnish Country Reports
Oshins, Alice H., Risk Management
The International Federation of Risk and Insurance Management Associations has asked its members to furnish reports on developments in their respective countries at the association's biannual meetings. What follows is culled from reports submitted at IFRIMA's recent meeting in New Orleans.
According to the Association of Insurance and Risk Managers in Industry and Commerce in the United Kingdom, whose report was based on Post Magazine accounts, 1990 saw a dramatic rise in British claims volume, particularly due to storms in January and February, a midyear drought and the worst fire losses since record keeping for these losses began in 1958. Gross fire losses for the year exceeded L800 million, and related business interruption losses are likely to top L1 billion. The rise in fraudulent and arson-related fire claims has prompted the establishment of the Arson Prevention Bureau, which is being funded and operated by the Association of British Insurers (ABI) and the government's Home Office.
On the liability front, several legal decisions have affected British insurers. The Liverpool High Court held that nine people who watched televised accounts of the Hillsborough football disaster in April 1989 and who had family members at the game are entitled to sue for damages related to posttraumatic stress disorder, as is a fan who from the stands watched his two brothers being crushed to death. In another case, four firefighters were awarded damages for posttraumatic stress they suffered while battling a London subway fire, marking the first time emergency service personnel have received such compensation. In two other cases, children who sustained brain damage at birth were each awarded damages close to L1.2 million.
In November, the United Kingdom passed the Environmental Protection Act, which provides industry with an impetus to improve risk management procedures. Many insurers responded by restricting their pollution liability coverage to sudden unintended and unexpected events, as recommended by the ABI, which also suggested wording for a broader coverage known as the Single Event Pollution Trigger Insurance Clause. SEPTIC, providing coverage up to an aggregate limit per period, requires an insurer to be responsible for all claims arising out of a risk once an insured becomes aware of it and notifies its carrier. Most insurers do not believe SEPTIC will be widely available, and the extent to which insurers will employ the unintended and unexpected restriction in a competitive market remains uncertain.
Directors' and officers' liability coverage has become increasingly popular not only because directors and officers are more aware of their responsibilities and duties, but because the Companies Act was amended to allow firms to pay D&O premiums. In the past, D&O coverage was voidable, and directors had to buy the insurance in their own names at their own expense.
In France, according to the Association Professionnelle des Charges de Ia Gestion des Risques et des Assurances des Entreprises Francaises (ACADEF), 1990 was a record loss year, with a 30 percent increase over 1989 helping to create an industry combined ratio of 104. Nevertheless, January 1991 renewals were accompanied by intense competition among brokers and insurers.
Mergers and acquisitions continue to affect the French market: Allianz's French subsidiary and Via have merged, making Allianz France a significant local player; Zurich France and Saltiel, an industrial risk underwriter previously linked with Royal, have also merged; and UAP recently acquired full control of Royle Belge.
ACADEF membership increased 30 percent to 202 during 1990, a sign of heightened interest in risk management in France and a recognition of the association's role within the risk management community. The association is working on defining the role of French risk managers. With the support of the French Ministry of Transport, it is also trying to bring loss prevention techniques to corporate automobile fleets. …