Lloyd’s Chairman, Lord Peter Levene, has called for insurers to contribute to the debate about the future of financial markets, citing better regulation as the key way forward.
In an article on the Lloyd’s web site (www.lloyds.com) Levene stated: “What the current crisis proves is that we are all part of a global market. What we therefore need is closer cooperation across borders, more harmonization of standards and greater mutual recognition between different territories.”
He was speaking to over 100 professionals from the Boston insurance and financial community in Boston on Thursday last week about global risk challenges for 2009. Levene warned that, even in light of the global economic challenges, businesses must not lose sight of other top risks, including liability risk, climate change, terrorism and political risk, each of which may be further exacerbated by the current economic climate.
He noted that liability risks could be on the rise, pointing out that the recession could create “the perfect breeding ground” for a new increase in litigation activity. But he added that it was important for businesses not to let litigation and the fear of it stifle innovation.
“Insurers and intermediaries are well placed to help boards focus on these important areas,” he stated. “It is vital that companies carefully consider whether they have the right processes in place to manage liability risks.”
Levene also discussed the ongoing concerns over climate change, particularly in light of the $200 billion plus losses in 2005 and 2008. “We know that weather-related catastrophes are costing the insurance industry more than ever before,” he indicated. “It would be an environmental and business disaster to lose our strategic vision on climate change now.”
Levene stressed that homegrown terrorism is probably the greatest security threat we face and there is an urgent need to get a better understanding of how to tackle it.
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