After the drama of the Oxford and Cambridge boat race, the other summer sporting curtain raiser, the Grand National was equally full of incident and controversy. The debate continues about the race’s safety, although interestingly the motivation seems to be the welfare of the horses rather than the jockeys. Incredibly Tony McCoy, who fell off Synchronised (twice) before the horse was later put down, has been unsaddled over 700 times in his career and he is a 16 times champion so knows what he is doing. For accident & health underwriters the equine world is as tough as it gets yet it will be the nation’s love of animals that will prompt risk management improvements rather than what the insurers think or desire.
In Gibraltar this week for a couple of days and can report that her majesty’s loyal subjects in the territory are already putting up a good show, signs everywhere celebrating the Queens Diamond Jubilee. Back in the UK, with 3,500 applications for street parties it is all set for a right royal knees-up. Good on the Association of British Insurers for entering the spirit publishing their guide to planning an event and of course insuring it. The street party set for our corner of Dulwich is some achievement as evidently 3.5m people in UK have never even seen their neighbours and in frosty old London just a third of us are willing to describe our neighbours as friends.
Somewhat more alarmingly the threat of pandemic continues to attract media interest. If terrorists and cults were not enough to worry about, it seems the experiments that garage scientists get up to are what should concern us most. Amazingly for a few dollars these amateur molecular biologists can source on eBay the equipment necessary to duplicate pieces of DNA. With limited expertise, ethics or security, the DIY genetic engineers could easily be the next source of a mutant virus with devastating consequences for our clients and the wider economy.
Less scary but nonetheless interesting were the findings of Aon’s Risk Maturity Index published this week. Contrasting views expressed of the main challenges facing organisations depending on where they are situated in the world. In Western Europe logistical and geographic factors topped the list and in North America human resources were cited as being a critical issue. Interestingly in the emerging markets where some of the newest and modern physical assets are now located cultural factors remain a big obstacle in setting a risk management framework. The difficulty here unfortunately is that it takes a long time to alter people’s attitudes to safety and compliance.
Internationally, political risks insurance is back in the spotlight. Whilst by no means unique, remember Yukos seized in Russia a few years ago, nevertheless the Argentine Government nationalisation of the stake Spanish oil company Repsol owns in YPF is as brazen as it comes. Thankfully underwriters dodged the bullet as no insurance was in place and indeed they should benefit as more companies will now buy policies and premiums may improve. However the wider consequences, particularly for the substantial volume of Spanish investment in Argentina, of this short-sighted expropriation are bound to reverberate. This news, taken with the reported impact that the unavailability of marine coverage is having on the enforcement of sanctions in Iran, just demonstrates how critical our industry is in global geopolitical affairs.