Asian risk managers under less pressure on cyber, D&O and climate change than international peers

Cyber coverage is being extended across Asia-Pacific and big investment is being made in raising awareness of the risk by authorities across the region, but risk and insurance managers still seem unwilling to recognise the need for the cover, according to Franck Baron, chairman of the Pan-Asia Risk Management and Insurance Association (Parima) and group general manager – risk management and insurance at International SOS. Despite the big problems faced by risk and insurance managers across Europe, North America and Australia with directors and officers (D&O) coverage following a significant spike in class actions and social inflation, risk professionals in the Asia-Pacific region as a whole place D&O and wider liability questions still quite low on the agenda (unless they are part of a multinational organisation) because of a comparatively less litigious environment, added Mr Baron in interview with Commercial Risk Asia. The impact of climate change, meanwhile, should be high on the agenda of every company based in the Asia-Pacific region this year, especially as the region (not least Australia as evidenced by the recent bushfire catastrophe) is bearing the brunt of the impact. But risk and insurance managers may face opposition from commercial colleagues if they try to impose a more sustainable strategy in a still-challenging regional and global economic environment, suggested the Parima founder and leader. The good news is that there are positive signs from the Chinese and other governments in the region that suggest they are waking up to the fact climate change is real and needs to be tackled, according to Mr Baron. “Cyber coverage is gradually expanding across the region and we are seeing regional investments in underwriting expertise to support such a trend. A lot of investment is being made by the [insurance] market to raise awareness and educate insurance buyers and risk managers across Asia. Penetration still remains quite limited though,” Mr Baron told Commercial Risk Asia. Meanwhile, the hot topic of D&O in Europe and North America is not so hot in the Asia-Pacific region, said Mr Baron. “Liability risks are on the rise as businesses are more and more connected to overseas corporations through complex supply chain patterns. Asia remains less impacted by litigation compared to North America or Europe. The region is less litigious overall,” he added. Asked what Parima’s members should be doing to help their companies prepare for and mitigate climate change risk, Mr Baron responded: “This is the $1bn question and does not apply only to Asia. The key challenge in our region is the fact that the economic development needs remain the main priority. This being said, we are seeing countries like China starting to balance their economic development with a growing focus on environmental issues.” Parima now has 2,153 members from 2,211 companies across the Asia-Pacific region. The association was launched in April 2013 and held its first meeting in Singapore, hosted by Commercial Risk Asia editor Adrian Ladbury, later that month. The ethos of the association has always been to create a platform that was designed “by risk managers, for risk managers”, in Mr Baron’s words at the time. “The goal of Parima is to strengthen and enhance the Asian risk culture. We believe that this is accomplished primarily through the creation of opportunities for education and dialogue within the risk management community,” said Mr Baron at launch. “Parima’s board of directors is intent on creating a programme that will enable its members and associated parties to share their risk management knowledge and experiences with others in Asia who either hold the title of risk manager, or who have related responsibility without the title,” he continued. Mr Baron and his colleagues have clearly managed to achieve these goals, based on the rapidly rising number of members and awareness of the need for a professional approach to risk and insurance management across the region. This year, Parima will hold five core events for members. The main conference will be a two-day event held in Singapore, 26-27 October. This will be backed up by four one-day 'Masterclass' events. The first is planned for Manila, Philippines on 30 April. The next will be in Beijing, China in June, followed by Tokyo, Japan on 1 September. The final masterclass will take place in Kuala Lumpar, Malaysia in November. Commercial Risk Asia, in partnership with sister publication International Programme News, will hold its first conference in Asia on Wednesday 29 April in Singapore, on the hot topic of global programmes. Built on the success of our annual global programmes event in London, this high-level conference will inform risk and insurance managers of the latest news and issues that impact the way cross-border programmes could and should be designed and structured to cover core risks in the most consistent, cost-effective and compliant manner. We are the only publishing and events company worldwide to focus on this critical matter for multinational risk and insurance managers globally. Attendance is free for risk managers/risk officers and Parima members. Please email awhite@commercialriskonline.com to secure your place, or visit the event page for more information.

Asian risk managers under less pressure on cyber, D&O and climate change than international peers

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