claim and the level of scrutiny from insur ers We re promoting the inclusion of claims preparation clauses in policies This allows the client to instruct someone to help them prepare and document their claim Now that s often a forensic accounting team and we see that as an increased cost as a result of an incident It should be part of the claim We re promoting the inclusion of those clauses FM Global policies have as far as I m aware nearly always had them You mentioned you were improving existing policies and developing new ones Yes with regards to PD BI there are five key issues that have been around for some time in relation to value calculation sup ply chain wide area damage indemnity periods and the claim process We are trying to provide solutions to those once and for all The approach that FM Global takes is usually on a gross earnings basis But there is the option of gross profit too which is very good because it improves people s understanding of claims from around the world The United States is different from the international region in that regard It s making sure that people are comfort able with whichever basis they re used to Also it helps with the indemnity period issue already mentioned On a gross profit basis you have to identify up front what your period of interruption might be and lots of scenario work is essential to make sure that window of opportunity to claim is long enough We quite often see a standard 12 month indemnity period But it s rarely sufficient I ve seen enough major losses and natural catastrophe events to know that isn t enough for a devastating event If you re on a gross earnings basis the period is based on reinstatement it should therefore provide cover for however long it takes to reinstate the assets That option can help particularly in certain industries with long lead times for specialist assets So it s critical to have options Right and also accurate values anything that can assist people in getting the right val ues to avoid any under insurance is a good thing The solutions to most of the issues identified is pre loss work don t wait for a claim to happen before quantifying your potential losses and testing the policy Loss scenario work is vital for improving cover and managing expectations How do you sell this How do you get the word out and to what end The ultimate benefit is certainty That s all anyone can really hope for At the end of the day we are looking at risk and we want to help risk managers manage out that risk as much as possible We want to make sure that their insurance works as expected Part of this work that we re doing is managing expectations Actually it s also about iden tifying the limitations It may appear a bit negative sometimes but actually everybody has got to be aware of the limitations of their existing cover If we re talking about PD BI it s a contract like any other You have to look at the wording We have to make sure everyone understands what is covered and more importantly what isn t covered Everyone appreciates the honesty and is instantly more comfortable with existing insurance Then we move on to other risk This approach is gaining the support of risk management associations around the The ultimate benefit is certainty That s all anyone can really hope for At the end of the day we are looking at risk and we want to help risk managers mitigate risk as much as possible We want to make sure that their insurance works as expected world starting with AIRMIC FERMA and PARIMA which helps us gain traction What motivates you What inspires you to do this I spent 15 years in claims both the investiga tion of claims for insurers and then helping Marsh clients and preparing their claims I know what can go wrong I know how tough it is for a business to survive a major loss The insurance money can be a lifeline the insurance money will fund all of the miti gating actions and business continuity plans therefore I want to make sure it s sufficient I think it s important to improve the claims experience having seen what can happen I know what changes are needed Marsh has given me the opportunity to make a differ ence We ve got the ability to do that and that s why we re reshaping the industry in relation to BI The response across the industry has been very positive But this isn t the typical role that Marsh assumes as the broker Some of these projects go beyond I sup pose the norm of a traditional insurance broker This puts us in the position of being a true risk advisor If we look at natural catas trophe risk for example I ve seen firsthand from a claims perspective just how bad it is for people involved At Marsh we re doing everything we can to help people and advise them in relation to natural catastrophe risk We want to make sure that the risk manage ment and preparation is strong and that insurance is in place We have a very clear view of best practices in relation to natural catastrophe risk management and transfer To be honest we re raising the profile of insurance to ensure the money is available post loss If the insurance funds aren t in place what happens What happens to the community This is where we move on to Marsh not just being a risk advisor but a member of these communities We try to help organizations such as the UNISDR United Nations International Strategy for Disaster Reduction to make cities more resilient to natural catastrophe risk 24 REASON ISSUE 2 2015

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