Posts Tagged ‘CBI’



March 27th, 2014

Recent Sun Flare Event Is a Reminder of Solar Weather Hazards

Posted at 1:00 AM ET

On Monday, February 24, 2014, the sun once again provided a reminder of the potential hazards of solar weather events. A large solar flare was reported by the National Aeronautics and Space Administration (NASA) measuring at X4.9 (1) (or according to the National Weather Service’s Space Prediction Center, an R3 (strong) Solar Flare Radio Blackout) (2) that could cause severe disruption to satellites and technology on Earth.

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March 4th, 2014

Cyber Review

Posted at 1:00 AM ET

As Guy Carpenter launches its new Cyber Solutions Specialty Practice, we review recent GC Capital Ideas stories on cyber.

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February 6th, 2014

Supply Chain Management

Posted at 1:00 AM ET

Here we review recent GC Capital Ideas stories that have covered issues related to supply chain management.

Emerging Risks:  Managing the Unknown:  Having examined the three emerging risks of cyber, climate change and space in detail, it is clear they present serious threats to businesses and (re)insurers. Not only will the fallout from these risks result in losses we can currently anticipate and predict (such as increased property damage and liability vulnerability), but they also have the potential to trigger costly secondary impacts such as a breakdown in supply chains, reputational damage, disrupted power supplies and possibly others that are more difficult to foresee.

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Supply Chain Risk Management and (Re)insurance Solutions:  Technological advances have resulted in business being conducted all over the world in an instantaneous manner, meaning supply chain failures can significantly impact companies’ revenue, credibility and reputation. Companies are therefore now far more exposed to external risks than ever before. This has raised (re)insurers’ concerns over the ability of the market to understand the risks that are being underwritten and the viability of offering business interruption/contingent business interruption cover. Indeed, some (re)insurers have taken the view that risk management strategies at the company level need to be improved before coverage can be offered.

Read the article >>

 

Causes of Supply Chain Disruption: The Business Continuity Institute’s 2012 Supply Chain Resilience Survey estimates that outsource service provider failure represents one of the most significant causes of supply chain disruption, only lagging behind adverse weather and technology. The particular danger represented by the supplier or service provider, especially if it involves an aspect of critical infrastructure, is that the failure is likely to cut across multiple industries and geographies. For example, the disruption caused by a component part of technology used by a power generator does not just shut the utility down - all commercial and residential operations grind to halt.

Read the article >>

 

Cyber Risk and its Impact on Supply Chains: Cyber risks are not isolated and are usually connected to other risks. Many companies that are exposed to cyber risks are, for example, also exposed in turn to risks to their supply chain. Due to technological innovation and advances, many parts of a company’s or industry’s supply chain have become interconnected and automated. Technology is indeed a critical enabler of a supply chain’s operations. Therefore a cyber attack has the potential to put an entire company’s supply chain at risk. Cyber security and supply chain risk management must therefore be considered in conjunction with one another.

Read the article >>

 

Contingent Business Interruption: Life Support for Industry: Contingent business interruption (CBI) is a generic term for extensions to the standard cover that provide for reduction in revenue as a result of damage at locations other than the insured’s own premises, whether it be suppliers or customers. In some cases insurers are providing cover on a “non-damage” basis, which protects against insolvency or political risk among an array of contingencies that might disturb the supply chain.

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December 10th, 2013

Emerging Risks: Managing the Unknown, Part I

Posted at 1:00 AM ET

Having examined the three emerging risks of cyber, climate change and space in detail, it is clear they present serious threats to businesses and (re)insurers. Not only will the fallout from these risks result in losses we can currently anticipate and predict (such as increased property damage and liability vulnerability), but they also have the potential to trigger costly secondary impacts such as a breakdown in supply chains, reputational damage, disrupted power supplies and possibly others that are more difficult to foresee.

Continue reading…

December 9th, 2013

Space (Re)insurance Solutions: Weather Risk

Posted at 1:00 AM ET

Space weather risks are difficult to quantify due to the lack of understanding and clarity about the likely duration and consequences of extreme events. However, it is clear the interconnected global economy that exists today is vulnerable to the risks posed by space weather. Indeed, extreme solar weather events have the potential to create systemic risk by triggering cascading failures across industries and regions.

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November 20th, 2013

Responding to Climate Change: Part I

Posted at 1:00 AM ET

Although there has been a significant increase in both economic and insured losses from natural catastrophes in recent decades, it is important to put these numbers in context. With the exception of coastal flood, inland flood and drought, the wholesale attribution of rising financial losses to an increase in hazard frequency can be misleading. Statements concerning the influence of global warming on loss trends would be better served if normalized by factors such as inflation, (per capita) gross domestic product, total insured value, population density and annualized property value. Indeed, the IPCC agrees that ignoring these factors leaves an upward trend in losses for purely economic reasons, notwithstanding any behavior in the peril. As an example, the recent “trend” in hurricane losses for the coastal United States loses clarity when normalized by inflation and population density. (1)

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November 13th, 2013

Supply Chain Risk Management and (Re)insurance Solutions

Posted at 1:00 AM ET

Technological advances have resulted in business being conducted all over the world in an instantaneous manner, meaning supply chain failures can significantly impact companies’ revenue, credibility and reputation. Companies are therefore now far more exposed to external risks than ever before. This has raised (re)insurers’ concerns over the ability of the market to understand the risks that are being underwritten and the viability of offering business interruption/contingent business interruption (BI/CBI) cover. Indeed, some (re)insurers have taken the view that risk management strategies at the company level need to be improved before coverage can be offered.

Continue reading…

November 12th, 2013

Risk Awareness

Posted at 1:00 AM ET

Changing business environments and the interconnected global economy have created new risks for organizations, which in turn have prompted the need for greater awareness and protection against supply chain disruption. However, while greater awareness is important, it does not always translate into a true understanding of the risk. For example, a recent study conducted by Oliver Wyman in conjunction with the National Association of Corporate Directors (1) showed that 51 percent of those surveyed indicated that they were not provided with adequate information to deliver IT risk oversight.

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November 12th, 2013

Causes of Supply Chain Disruption

Posted at 1:00 AM ET

The Business Continuity Institute’s 2012 Supply Chain Resilience Survey estimates that outsource service provider failure represents one of the most significant causes of supply chain disruption, only lagging behind adverse weather and technology (see Figure F-1). The particular danger represented by the supplier or service provider, especially if it involves an aspect of critical infrastructure, is that the failure is likely to cut across multiple industries and geographies. For example, the disruption caused by a component part of technology used by a power generator does not just shut the utility down - all commercial and residential operations grind to halt.

Continue reading…

November 11th, 2013

Cyber Risk and its Impact on Supply Chains

Posted at 1:00 AM ET

Cyber risks are not isolated and are usually connected to other risks. Many companies that are exposed to cyber risks are, for example, also exposed in turn to risks to their supply chain. Due to technological innovation and advances, many parts of a company’s or industry’s supply chain have become interconnected and automated. Technology is indeed a critical enabler of a supply chain’s operations. Therefore a cyber attack has the potential to put an entire company’s supply chain at risk. Cyber security and supply chain risk management must therefore be considered in conjunction with one another.

Continue reading…