I don’t know where the 10,000 attendees at RIM’s annual conference were on Tuesday afternoon, but they certainly weren’t on the exhibition floor.
Innumerable bowls of chocolate remained uneaten, promotional personal battery operated fans and other show floor free booty remained unused, and sales people and other company representatives seemed to be huddled in nervous clutches, like Emperor penguins who just got wind that there might be a leopard seal prowling in their midst.
At one end of the exhibition space, at the dozens of tables set aside for insurance buyers and sellers to eat their conference floor lunches, lone wolves in rumpled shirts sat one to a table, staring at the anti-social screens of their laptop computers.
At the other end, those lunch tables were slightly more populated, but in between it was a grisly scene. There were so many sales people standing around with nothing to do that a passerby had to avert their gaze, more out of compassion than anything.
Now and then one of the more aggressive booth workers would lurch out at a pedestrian, coming on like a barker trying to lure a drunken sailor into a peepshow, but they quickly got the message. There are so many of you, and there is only one of me, and I’m afraid you’re going to rend my garments in your desperation.
One service provider reported that foot traffic as of mid-afternoon on Tuesday was off more than 90 percent from the previous day.
So where was everyone? Were they all sitting raptly in RIMS sessions? Had Tuesday’s more humane temperatures lured them out onto the region’s beaches and golf courses?
No one was sure. All they knew was that it was slow, painfully slow, in the exhibition space on Tuesday afternoon.
Tuesday, April 29, 2008
Live Blog: Risk Management Belongs in the C-Suite
12: 40 p.m.
This is a live blog from Tuesday's luncheon keynote address, "Risk Management Belongs in the C-Suite." Today's speaker is Lauralee Martin, CFO and COO of Jones Lang LaSalle Inc.
1:13 p.m.
Martin sees the C-suite as becoming crowded. It's no longer a place solely for the CEO, COO and CFO.
1:15 p.m.
Current events point to the need to put risk management at the top. The credit crisis proves that the basics of risk management were forgotten. "Where were our risk managers," Martin asks.
1:20 p.m.
The rules have changed, says Martin. "Not only about how you play the game but how you win."
What's different about today's risk environment than the one Martin grew up in is that companies have more to lose today if they don't experiment with risk management strategy.
1:25 p.m.
Back to the credit crisis. Martin says she is continually shocked by what transpired. The sorting out of what went down is still going on because of the reluctance by some companies to embrace transparency. Interestingly enough, Martin says she is convinced that the C-suite will pay attention now more than ever. Its members may not have much time or patience, and they clearly want answers. But their ears are open, she insists.
1:32 p.m.
"I believe we'll be required to do more risk transfer," Martin says. "We can't be experts in everything." Involving others who are experts in certain fields means you'll be getting it right.
1:35 p.m.
Comforting to know, this CEO and COO says risk management processes cannot be just a report gathering dust on your desk. "It must live and breathe" throughout your organization, Martin says.
1:40 p.m.
Leaving attendees with some parting thoughts, Martin again insisted that risk management indeed belongs at the top of an organization and that those C-suite-rs will listen to concerns about their company's risk management program. But before she left the podium she issued a challenge to the audience. "I'm told you guys are the best." What she meant was, here's the kick in the pants risk managers need to speak up to their superiors. After all, change can't occur in the C-suite if risk managers remain silent.
1:44 p.m.
As applause followed Martin from the stage and audience members rose to gather their belongings and head down to the exhibit hall for a much needed wine and cheese reception, there was some positive chatter among those departing. One risk manager attendee was impressed that RIMS booked a C-suite-r to speak for the keynote address. He was also pleased that Martin's observations were pretty spot-on. Communication between the risk manager and C-suite is the key, he said. As long as you've got the data and the research to put in front of your CEO, they will listen to you. They will do their part, he said, if you do yours.
This is a live blog from Tuesday's luncheon keynote address, "Risk Management Belongs in the C-Suite." Today's speaker is Lauralee Martin, CFO and COO of Jones Lang LaSalle Inc.
1:13 p.m.
Martin sees the C-suite as becoming crowded. It's no longer a place solely for the CEO, COO and CFO.
1:15 p.m.
Current events point to the need to put risk management at the top. The credit crisis proves that the basics of risk management were forgotten. "Where were our risk managers," Martin asks.
1:20 p.m.
The rules have changed, says Martin. "Not only about how you play the game but how you win."
What's different about today's risk environment than the one Martin grew up in is that companies have more to lose today if they don't experiment with risk management strategy.
1:25 p.m.
Back to the credit crisis. Martin says she is continually shocked by what transpired. The sorting out of what went down is still going on because of the reluctance by some companies to embrace transparency. Interestingly enough, Martin says she is convinced that the C-suite will pay attention now more than ever. Its members may not have much time or patience, and they clearly want answers. But their ears are open, she insists.
1:32 p.m.
"I believe we'll be required to do more risk transfer," Martin says. "We can't be experts in everything." Involving others who are experts in certain fields means you'll be getting it right.
1:35 p.m.
Comforting to know, this CEO and COO says risk management processes cannot be just a report gathering dust on your desk. "It must live and breathe" throughout your organization, Martin says.
1:40 p.m.
Leaving attendees with some parting thoughts, Martin again insisted that risk management indeed belongs at the top of an organization and that those C-suite-rs will listen to concerns about their company's risk management program. But before she left the podium she issued a challenge to the audience. "I'm told you guys are the best." What she meant was, here's the kick in the pants risk managers need to speak up to their superiors. After all, change can't occur in the C-suite if risk managers remain silent.
1:44 p.m.
As applause followed Martin from the stage and audience members rose to gather their belongings and head down to the exhibit hall for a much needed wine and cheese reception, there was some positive chatter among those departing. One risk manager attendee was impressed that RIMS booked a C-suite-r to speak for the keynote address. He was also pleased that Martin's observations were pretty spot-on. Communication between the risk manager and C-suite is the key, he said. As long as you've got the data and the research to put in front of your CEO, they will listen to you. They will do their part, he said, if you do yours.
Sessions: Are You Passionate?
The light went off in Robert Pastore’s head when he analyzed 10 years of Wal-Mart Stores Inc’s pay-outs and pay-ins on its insurance program. You know what the difference was? 1 percent.
That’s right ladies and gentlemen, 1 percent.
That’s just one more occasion when it hit Pastore, the director of global risk management for the mammoth retailer that hit $375 billion in revenue in its most recent fiscal year; why was he paying for insurance when he could use his company’s massive financial strength to self-insure in at least some cases?
Pastore was laying down this creed in a RIMS session on self-insurance on Tuesday morning, but when you think about the financing of insurance in this respect, it’s really no different than what financial consultants and sages remind you about your own money management.
For after all, what do they say about taxes? It is far better to hold onto as much of your tax payment money throughout the year as you can and realize the benefits of investing it in a money market account or some other instrument, than have the U.S. government hold your money for the year and issue you their patronizing tax rebate at some point every spring.
Warren Buffet and others have been very clear on this concept for years, haven’t they? It’s not the profits on the underwriting, they say, it’s the fact that they get to hold onto other people’s money for them and profit by investing it: profit greatly by investing it, we might add.
But how was Pastore, who has only been in risk management for a few years, to get to that holy place where he could put his theories about self-insurance into practice?
For one, he had to overcome, or at least engage, to be fair, a corporate culture at the Arkansas-based retailer that tended to look at risk management as a dyed-in-the-wool budget item, not the fluid hybrid of art and science that some practitioners believe it to be.
“We were looked at for the longest time as a budget item,” Pastore explains. The degree to which Wal-Mart’s corporate culture took that approach was a little shocking. Employees in Wal-Mart’s garden centers would leave plants outside in heat waves, with the expectation that they company had insurance for some losses, so why not use it?
Pastore has changed all of that line item thinking, and boy are the petunias happier.
“We haven’t had a plant loss in three years,” he said. And he said insurers are welcoming his new approach.
“They don’t want to be swapping dollars anymore than you want to be,” Pastore said.
In getting to the place that Pastore has arrived at, one needs to take a much more active role in assessing the financial strength and corporate culture of one’s company, according to David North, the president and CEO of Sedgwick Claims Management Services Inc., who shared some podium time with Pastore on Tuesday in San Diego.
That means, according to North, that you need to be able to assess management’s appetite for risk, understand the financial strength of the company, its administrative competence, and what North called executives' “emotional readiness” to take on risk.
It’s not something you do in your sleep. It means being active about what you are doing, and in fact being passionate about what you are doing.
“The concept of self-insurance and retaining risk is not easy,” is the way North puts it.
But just look at those numbers that Pastore unearthed: 1 percent, over 10 years, at the biggest company anyone can think of.
So now we just have one question for you gentle readers. To quote from the album title by Neil Young, “Are You Passionate?”
That’s right ladies and gentlemen, 1 percent.
That’s just one more occasion when it hit Pastore, the director of global risk management for the mammoth retailer that hit $375 billion in revenue in its most recent fiscal year; why was he paying for insurance when he could use his company’s massive financial strength to self-insure in at least some cases?
Pastore was laying down this creed in a RIMS session on self-insurance on Tuesday morning, but when you think about the financing of insurance in this respect, it’s really no different than what financial consultants and sages remind you about your own money management.
For after all, what do they say about taxes? It is far better to hold onto as much of your tax payment money throughout the year as you can and realize the benefits of investing it in a money market account or some other instrument, than have the U.S. government hold your money for the year and issue you their patronizing tax rebate at some point every spring.
Warren Buffet and others have been very clear on this concept for years, haven’t they? It’s not the profits on the underwriting, they say, it’s the fact that they get to hold onto other people’s money for them and profit by investing it: profit greatly by investing it, we might add.
But how was Pastore, who has only been in risk management for a few years, to get to that holy place where he could put his theories about self-insurance into practice?
For one, he had to overcome, or at least engage, to be fair, a corporate culture at the Arkansas-based retailer that tended to look at risk management as a dyed-in-the-wool budget item, not the fluid hybrid of art and science that some practitioners believe it to be.
“We were looked at for the longest time as a budget item,” Pastore explains. The degree to which Wal-Mart’s corporate culture took that approach was a little shocking. Employees in Wal-Mart’s garden centers would leave plants outside in heat waves, with the expectation that they company had insurance for some losses, so why not use it?
Pastore has changed all of that line item thinking, and boy are the petunias happier.
“We haven’t had a plant loss in three years,” he said. And he said insurers are welcoming his new approach.
“They don’t want to be swapping dollars anymore than you want to be,” Pastore said.
In getting to the place that Pastore has arrived at, one needs to take a much more active role in assessing the financial strength and corporate culture of one’s company, according to David North, the president and CEO of Sedgwick Claims Management Services Inc., who shared some podium time with Pastore on Tuesday in San Diego.
That means, according to North, that you need to be able to assess management’s appetite for risk, understand the financial strength of the company, its administrative competence, and what North called executives' “emotional readiness” to take on risk.
It’s not something you do in your sleep. It means being active about what you are doing, and in fact being passionate about what you are doing.
“The concept of self-insurance and retaining risk is not easy,” is the way North puts it.
But just look at those numbers that Pastore unearthed: 1 percent, over 10 years, at the biggest company anyone can think of.
So now we just have one question for you gentle readers. To quote from the album title by Neil Young, “Are You Passionate?”
Sessions: The Future Is Now, Risk Managers
Peter Breitstone, managing principal and CEO of Aon Environmental Services Group, broke the tension in the room after his presentation with a, "I'm a fun guy, right?"
He'd spent the last 20 minutes or so in the Tuesday morning session titled "The Future is Now: Upgrading from ERM to Sustainability" talking about how the "intangibles" now make up 71 percent of the balance sheet for corporations. Risk managers better "embrace" the intangibles, he said. Otherwise, their company's sustainabiliy officer will decide that tacking on "insurance buying" onto their to-do lists would be better than paying a whole other person's salary (hint, hint ... your salary).
"Once we turn into insurance buyers, we're marginalized. We know that," he said.
Intangibles? They're green consumerism, governments, activist shareholders, vendors/suppliers, the dreaded media.
Embrace intangibles, and the sustainability that comes from doing so. Breitstone said that
"embracing sustainability offers risk managers to broaden their role."
"Be a sponge, not Sponge Bob," he said, adding that sustainability is fun and it's good business.
Dan Anderson, professor of risk management and insurance, University of Wisconsin-Madison, gave the audience some techniques of strong sustainability:
-- it has to become a top management priority
-- it has to be CEO driven
-- ERM should be expanded to include sustainability risk
-- consider producing a sustainability report, first thing by figuring out where you're at. About 67 percent of the largest 200 global companies have made sustainability reporting part of their risk manageemnt
-- waste reduction. DuPont made a 74 percent reduction in toxic releases and cut annual waste tratement bill by $200 million
-- prevention and reduction of pollution and emissions
-- increase water efficiency
-- voluntary reductiuon of greenhouse gases
"There's a very high probability in 2009 that we'll have rules, regulations, requirements," he said about the three presidential candidates.
Companies should also figure out their "triple bottom line" -- their financials minus their environmental risks and social responsibility performance risks.
All this sound expensive? Anderson cited the Stern Report from the British government, which calculated the cost of mitigation of global warming at 1 percent of gloal GDP ... but without mitigation, global warming will lead to loss of 5 percent to 20 percent of GDP.
If that's not enough, the panel also included John Vargo, who manages risk for Johnson Controls. Sustainability has become one of his company's five vore values, as well as integrity, customer satisfaction, its employees, and innovation and improvement.
Track down Vargo if you want proof that sustainability -- including making global warming a priority -- works.
"If you align yourself with what society wants and what your customers want, your're going to do better," he said.
He'd spent the last 20 minutes or so in the Tuesday morning session titled "The Future is Now: Upgrading from ERM to Sustainability" talking about how the "intangibles" now make up 71 percent of the balance sheet for corporations. Risk managers better "embrace" the intangibles, he said. Otherwise, their company's sustainabiliy officer will decide that tacking on "insurance buying" onto their to-do lists would be better than paying a whole other person's salary (hint, hint ... your salary).
"Once we turn into insurance buyers, we're marginalized. We know that," he said.
Intangibles? They're green consumerism, governments, activist shareholders, vendors/suppliers, the dreaded media.
Embrace intangibles, and the sustainability that comes from doing so. Breitstone said that
"embracing sustainability offers risk managers to broaden their role."
"Be a sponge, not Sponge Bob," he said, adding that sustainability is fun and it's good business.
Dan Anderson, professor of risk management and insurance, University of Wisconsin-Madison, gave the audience some techniques of strong sustainability:
-- it has to become a top management priority
-- it has to be CEO driven
-- ERM should be expanded to include sustainability risk
-- consider producing a sustainability report, first thing by figuring out where you're at. About 67 percent of the largest 200 global companies have made sustainability reporting part of their risk manageemnt
-- waste reduction. DuPont made a 74 percent reduction in toxic releases and cut annual waste tratement bill by $200 million
-- prevention and reduction of pollution and emissions
-- increase water efficiency
-- voluntary reductiuon of greenhouse gases
"There's a very high probability in 2009 that we'll have rules, regulations, requirements," he said about the three presidential candidates.
Companies should also figure out their "triple bottom line" -- their financials minus their environmental risks and social responsibility performance risks.
All this sound expensive? Anderson cited the Stern Report from the British government, which calculated the cost of mitigation of global warming at 1 percent of gloal GDP ... but without mitigation, global warming will lead to loss of 5 percent to 20 percent of GDP.
If that's not enough, the panel also included John Vargo, who manages risk for Johnson Controls. Sustainability has become one of his company's five vore values, as well as integrity, customer satisfaction, its employees, and innovation and improvement.
Track down Vargo if you want proof that sustainability -- including making global warming a priority -- works.
"If you align yourself with what society wants and what your customers want, your're going to do better," he said.
Sessions: EMP 202: Workplace Bullying
This isn't an issue just for high school locker rooms. Bullying is an issue in the workplace and it concerned enough RIMS attendees that they packed the room for Session EMP 202 "Workplace Bullying: The 'New' Type of Harassment" on Tuesday morning.
Adeola Adele, a senior vice president and EPL practice leader at Marsh, set the record straight at the outset, confirming that "bullying" is not illegal in the United States. However, when she surveyed the audience to see who knew about the risk associated with the issue, well over half the room raised their hands.
She shared some interesting statistics from the National Workplace Bullying Institute, stating that 37 percent of Americans--54 million people--have been bullied in the workplace. In addition, workplace bullying is four times more prevalent than other types of harassment, including sexual and racial harassment. Women are the targets of the behavior, more often than men. By the same token, women were the perpetrators of workplace bullying in 71 percent of cases.
Johan Lubbe, partner at Jackson Lewis, said during his presentation that when he defends workplace bullying claims in the U.S.--and yes, there are claims being made despite the behavior not being expressly prohibited by law--he asks the employers if the bullier singled out the individual or group that he or she bullied.
"I am usually pleased to find out that the perpetrator bear hugs everyone, is touchy-feely with everyone," said Lubbe. This defense is known as the "equal opportunity harassment" defense, or as Lubbe prefers to call it: the "equal jerk" defense.
Lubbe was quick to point out that this defense is falling by the wayside. "Whether the person does it to everyone is irrelevant," he said. "It's really whether or not this behavior has occurred, period."
While legislation is being looked at in several states, Lubbe said much of his research has covered European countries where workplace bullying is increasingly being looked at as a type of harassment. The crux of what constitutes workplace bullying is that the behavior causes chronic stress and anxiety that causes a person to lose their dignity. The challenge in identifying when workplace bullying has occurred is that the line between a tough management style and abuse can be a fuzzy one.
Although no legislation has passed yet in the U.S., Lubbe said there have been attempts to look at workplace bullying from an OSHA standpoint, or to apply it to existing statutes. A case this year in Indiana involving a bypass surgery support staff member who sued a bullying doctor went in favor of the victim. The jury awarded the person $325,000, and it was the first time that workplace bullying was rolled into the concept of intentional infliction of emotional distress, Lubbe said.
The "Healthy Workplace" bills that have been making their way through various stages of legislature intend to make unlawful employment practices that subject an employee to an abusive work environment. A cap of $25,000 on emotional distress damages could be seen as attractive to legislators, Lubbe said. However, bullying could be seen as just one of several causes of action.
"In my perspective, it only adds $25,000 to your financial risk," he said. "I think it will take one state to be bold and to pass this legislation. Other states will follow."
Catherine Padalino, a vice president and national EPLI product leader at Chubb Specialty Insurance, said that even though workplace bullying is not illegal in the U.S., underwriters are continuing the monitor the issue as an emerging exposure.
"The frequency of claims will increase," she said. "We don't view this as a severity issue, but simply because of the media attention and the legislation activity this will be another cause of action that will be brought."
Padalino said that as an underwriter, one of the surprising statistics to her was that in 62 percent of cases, when made aware of bullying employers worsen the problem or do nothing. "One of the reasons I think that number is alarmingly high is because it is tough to determine the difference between a tough management style and bullying," she said.
From the underwriter's perspective, Padalino said that the term "bullying" does not have to be mentioned expressly in an employment practices policy, but that companies should certainly have broad language that covers any non-sexual harassment. Adele said that as a broker, she would prefer that bullying be mentioned explicitly so that the client is covered whether the behavior has been deemed illegal or not.
"Just because workplace bullying is not illegal doesn't mean the behavior won't be alleged," she said. "Claims will come and you need to at least be able to cover your defense costs."
These bits of advice came at the end of the session, during which Lubbe expressed his prediction that bullying will take on a life of its own, even before laws pass to make the behavior illegal.
"I think you will see a standalone 'bullying' case before legislation is passed because of all the attention being brought to the issue," he said.
OK risk managers. Start reviewing your employee handbooks and EPLI policies.
Adeola Adele, a senior vice president and EPL practice leader at Marsh, set the record straight at the outset, confirming that "bullying" is not illegal in the United States. However, when she surveyed the audience to see who knew about the risk associated with the issue, well over half the room raised their hands.
She shared some interesting statistics from the National Workplace Bullying Institute, stating that 37 percent of Americans--54 million people--have been bullied in the workplace. In addition, workplace bullying is four times more prevalent than other types of harassment, including sexual and racial harassment. Women are the targets of the behavior, more often than men. By the same token, women were the perpetrators of workplace bullying in 71 percent of cases.
Johan Lubbe, partner at Jackson Lewis, said during his presentation that when he defends workplace bullying claims in the U.S.--and yes, there are claims being made despite the behavior not being expressly prohibited by law--he asks the employers if the bullier singled out the individual or group that he or she bullied.
"I am usually pleased to find out that the perpetrator bear hugs everyone, is touchy-feely with everyone," said Lubbe. This defense is known as the "equal opportunity harassment" defense, or as Lubbe prefers to call it: the "equal jerk" defense.
Lubbe was quick to point out that this defense is falling by the wayside. "Whether the person does it to everyone is irrelevant," he said. "It's really whether or not this behavior has occurred, period."
While legislation is being looked at in several states, Lubbe said much of his research has covered European countries where workplace bullying is increasingly being looked at as a type of harassment. The crux of what constitutes workplace bullying is that the behavior causes chronic stress and anxiety that causes a person to lose their dignity. The challenge in identifying when workplace bullying has occurred is that the line between a tough management style and abuse can be a fuzzy one.
Although no legislation has passed yet in the U.S., Lubbe said there have been attempts to look at workplace bullying from an OSHA standpoint, or to apply it to existing statutes. A case this year in Indiana involving a bypass surgery support staff member who sued a bullying doctor went in favor of the victim. The jury awarded the person $325,000, and it was the first time that workplace bullying was rolled into the concept of intentional infliction of emotional distress, Lubbe said.
The "Healthy Workplace" bills that have been making their way through various stages of legislature intend to make unlawful employment practices that subject an employee to an abusive work environment. A cap of $25,000 on emotional distress damages could be seen as attractive to legislators, Lubbe said. However, bullying could be seen as just one of several causes of action.
"In my perspective, it only adds $25,000 to your financial risk," he said. "I think it will take one state to be bold and to pass this legislation. Other states will follow."
Catherine Padalino, a vice president and national EPLI product leader at Chubb Specialty Insurance, said that even though workplace bullying is not illegal in the U.S., underwriters are continuing the monitor the issue as an emerging exposure.
"The frequency of claims will increase," she said. "We don't view this as a severity issue, but simply because of the media attention and the legislation activity this will be another cause of action that will be brought."
Padalino said that as an underwriter, one of the surprising statistics to her was that in 62 percent of cases, when made aware of bullying employers worsen the problem or do nothing. "One of the reasons I think that number is alarmingly high is because it is tough to determine the difference between a tough management style and bullying," she said.
From the underwriter's perspective, Padalino said that the term "bullying" does not have to be mentioned expressly in an employment practices policy, but that companies should certainly have broad language that covers any non-sexual harassment. Adele said that as a broker, she would prefer that bullying be mentioned explicitly so that the client is covered whether the behavior has been deemed illegal or not.
"Just because workplace bullying is not illegal doesn't mean the behavior won't be alleged," she said. "Claims will come and you need to at least be able to cover your defense costs."
These bits of advice came at the end of the session, during which Lubbe expressed his prediction that bullying will take on a life of its own, even before laws pass to make the behavior illegal.
"I think you will see a standalone 'bullying' case before legislation is passed because of all the attention being brought to the issue," he said.
OK risk managers. Start reviewing your employee handbooks and EPLI policies.
Sessions: RMG 211: Global warming's gonna getcha
Don't read this if you don't believe in global warming. Keep your head in the sand ... until your beach gets eaten by the sea and you have no choice to face your climate change crisis. Or perhaps where you live, climate change will lead to desertification, and then you'll have even more sand to shove your head into.
On the other hand, if you want to know about how your whole company, your top product line, or your hometown could become obsolete because of the effects of climate change, if you are concerned about the thousands of billions of dollars in conceivable exposure that could result from climate change, read on about session RMG 211.
David Dybdahl of American Risk Management Resouces LLC spoke at this Monday afternoon session titled "Global Warming Litigation's Impact on Insurance Coverage and Risk Management" with a calm that did not match the profundity of the facts, figures and notions coming out of his mouth. It was a dry wit and matter-of-fact presentation with the message: "we're screwed."
Dybdahl brought up the village of Kivalina in Alaska, which is bringing suit against 23 U.S. companies for the damage done to their community because of global warming. Why those 23 companies? Because they are putting out 22 percent of the world's CO2.
The village is demanding $50,000,000 to $100,000,000 to pay for relocation costs. The community is becoming obsolete … and not in 2100. Today. They want out of the coast.
Dybdahl talked about Topsail, North Carolina. It's already eroding into the sea, he said, and is a top 10 hurricane spot on top of it. Yet the 850 people who live there own property with $1.3 billion in appraised value. Is that the American can-do spirit at work? Gotta love it.
The effects of global warming are visible today, not decades from now as the U.N. Intergovernmental Panel on Global Warming contemplated in its report, said Dan Anderson, professor of risk management at the University of Wisconsin-Madison.
Anderson said climate change is happening and human activity is helping it along. The science is not nearly as vague as some "experts" would like you to believe. Instead, the scientific consensus points to scary stuff. The U.N. report is actual conservative in its take on global warming, Anderson said. Do you disagree with all these Ph.D.s? Why? Because your town had its coldest winter last season in years? Those arguments only show your ignorance and perhaps inability to grasp the argument. You probably also argue that evolution is only a "theory."
So risk managers, you best have listened up to Dybdahl when he listed the major risks of global warming. There are property risks (increased risks of catastrophes), but the truly scary risk is that of obsolescence -- places, towns, cities, states, all that can become impossible to sustain.
Take Atlanta and its long-lasting drought. There is no way to get water there if they run out, and they are running out. Anderson said that Atlanta has only months of water in its Lake Lanier reservoir. What happens at your company in Hotlanta when there's no water for your toilets, your fountains, your business operations? Or how is Nevada going to get its water if they don't eventually run a pipeline to Lake Michigan. Lake Mead is not bottomless.
For companies, the problem could be product line obsolescence … or legislated obsolescence.
And the question with all these risks, and the risk of global warming litigation, said Dybdahl, is: When did you know or when should you have known that you activities were causing harm? In other words, when did you start to try to reduce your CO2 emisions (the best and perhaps only way at the moment to mitigate your global warming exposure, according to Anderson).
As it stands now, we know what is happening. Some people tend to argue against global warming. They can't get their head around the idea. They don't believe the scientists. They cling to doubts about climate change that are as obsolete as their businesses and communities may soon be.
On the other hand, if you want to know about how your whole company, your top product line, or your hometown could become obsolete because of the effects of climate change, if you are concerned about the thousands of billions of dollars in conceivable exposure that could result from climate change, read on about session RMG 211.
David Dybdahl of American Risk Management Resouces LLC spoke at this Monday afternoon session titled "Global Warming Litigation's Impact on Insurance Coverage and Risk Management" with a calm that did not match the profundity of the facts, figures and notions coming out of his mouth. It was a dry wit and matter-of-fact presentation with the message: "we're screwed."
Dybdahl brought up the village of Kivalina in Alaska, which is bringing suit against 23 U.S. companies for the damage done to their community because of global warming. Why those 23 companies? Because they are putting out 22 percent of the world's CO2.
The village is demanding $50,000,000 to $100,000,000 to pay for relocation costs. The community is becoming obsolete … and not in 2100. Today. They want out of the coast.
Dybdahl talked about Topsail, North Carolina. It's already eroding into the sea, he said, and is a top 10 hurricane spot on top of it. Yet the 850 people who live there own property with $1.3 billion in appraised value. Is that the American can-do spirit at work? Gotta love it.
The effects of global warming are visible today, not decades from now as the U.N. Intergovernmental Panel on Global Warming contemplated in its report, said Dan Anderson, professor of risk management at the University of Wisconsin-Madison.
Anderson said climate change is happening and human activity is helping it along. The science is not nearly as vague as some "experts" would like you to believe. Instead, the scientific consensus points to scary stuff. The U.N. report is actual conservative in its take on global warming, Anderson said. Do you disagree with all these Ph.D.s? Why? Because your town had its coldest winter last season in years? Those arguments only show your ignorance and perhaps inability to grasp the argument. You probably also argue that evolution is only a "theory."
So risk managers, you best have listened up to Dybdahl when he listed the major risks of global warming. There are property risks (increased risks of catastrophes), but the truly scary risk is that of obsolescence -- places, towns, cities, states, all that can become impossible to sustain.
Take Atlanta and its long-lasting drought. There is no way to get water there if they run out, and they are running out. Anderson said that Atlanta has only months of water in its Lake Lanier reservoir. What happens at your company in Hotlanta when there's no water for your toilets, your fountains, your business operations? Or how is Nevada going to get its water if they don't eventually run a pipeline to Lake Michigan. Lake Mead is not bottomless.
For companies, the problem could be product line obsolescence … or legislated obsolescence.
And the question with all these risks, and the risk of global warming litigation, said Dybdahl, is: When did you know or when should you have known that you activities were causing harm? In other words, when did you start to try to reduce your CO2 emisions (the best and perhaps only way at the moment to mitigate your global warming exposure, according to Anderson).
As it stands now, we know what is happening. Some people tend to argue against global warming. They can't get their head around the idea. They don't believe the scientists. They cling to doubts about climate change that are as obsolete as their businesses and communities may soon be.
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