Corporate Risk & Insurance – The Case For Placement Reform14 March 2011
This report is the second part of a major programme of research by Mactavish into corporate risks in the UK. The ﬁrst instalment, published in January 2010, analysed how the forces of globalisation and recession had caused UK ﬁrms to make unprecedented strategic and operational changes to protect themselves against economic downwinds. The speed, scale and concurrence of these changes have had a material impact on the risk exposures of British businesses, an impact that was neither adequately recognised by corporate Britain nor properly explained to insurers.
This follow-up report looks in detail at the insurance protection companies have in place against these risks and the consequences of the widespread lack of understanding of how risks are changing. It sets out a very strong case that most companies in the UK today, particularly the mid-size ﬁrms that compose around half of private sector GDP, are left desperately exposed when it comes to their insurance arrangements. In addition, it puts forward key recommendations about how to reform the insurance placement system.
The report paints an alarming picture of Boards of British companies failing to properly govern their insurance arrangements.