Marsh provides “Top Six Risk Management Tips for 2011”
to help Chinese companies prepare for next year
Beijing , December 23, 2010 – Marsh, the world’s leading insurance broker and risk advisor, today issued its Top Six Risk Management Tips, providing companies with practical insights to navigate in the risk landscape in China heading into next year.
With uncertain global economic conditions set to continue, Marsh said that companies should ensure they have the appropriate risk management and insurance programs in place to withstand any economic swings and turn risk into opportunity.
The Central Economic Working Conference, which just concluded, pointed out the world economy will still be volatile and face many uncertainties and risks next year.
Paul Wilkins, Chairman and CEO of Marsh Greater China, commented: ”Chinese companies face both risks and opportunities in 2011. With more overseas investment, public listings and M&A activities by Chinese companies as well as the increasingly stringent regulatory supervision, Chinese companies face unprecedented risks.”
“These risk management tips will help companies prioritise their risk exposures, ensuring they are better prepared for any unexpected events heading into 2011.”
Marsh issued the following risk management tips for Chinese companies:
Update your risk profile
A successful risk management and insurance program will help to reduce the possibility of loss and maximize the profits and shareholder value. The most critical aspect is understanding your company’s basic risk profile. Marsh’s Risk Explorer is an innovative online tool that provides businesses with an easy-to-understand risk assessment at no cost.
Strengthen environmental risk management
The new tort law, which became effective on 1 July 2010, established a “no fault principle” for environmental pollution tort liability, dramatically changing the risk profile and potential liability costs for businesses operating in many industries. Companies should proactively manage their environmental risks by developing effective management and control systems, and purchasing environmental liability insurance.
Directors’ and professional liability
In 2010, the overseas IPOs and financing by the Chinese companies reached a new peak and Directors & Officers’ (D&O) liability has become an exposure that companies can not ignore. A properly constructed D&O insurance program protects your senior management and board of directors for any claims or allegations that may arise when companies list overseas, especially in more litigious markets. This is also true for professions such as fund managers, lawyers, engineers and architects where Professional Indemnity Insurance enables practitioners to deliver service with confidence.
Reduce employee benefits costs
A company’s largest asset is also its largest expense: employees. Contain the cost of employee benefits and retain employees through health prevention measures, flexible benefits and smarter insurance purchasing.
M&A risk due diligence and insurance
According to the latest ThomsonReuters data from the first-half of 2010, Asian M&A deal values increased 67% compared to the same period last year. Hong Kong alone saw an increase of 275% in completed M&A deal values. As M&A activities come back in Asia, companies and private equity funds should engage Marsh to conduct risk and insurance due diligence to uncover all the potential hidden liabilities. Companies should also consider an array of transactional risk insurance products now available in Asia, such as Warranty & Indemnity Insurance.
Manage supply chain risk
Understanding your entire supply chain, from raw materials to the end consumer is the first step in managing supply chain risk. Know your suppliers and make sure you have mitigation strategies in place such as business interruption insurance, product recall protocols and back-up suppliers.
Contact:
Valen Lin
+8610 6533 4008
valen.lin@marsh.com
About Marsh
Marsh, the world’s leading insurance broker and risk adviser, has over 24,000 employees and provides advice and transactional capabilities to clients in over 100 countries. Marsh is a member of Marsh & McLennan Companies, a global professional services firm with over 50,000 employees worldwide and annual revenue of $10 billion, which is also the parent company of Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of HR and related financial advice and services; and Oliver Wyman, the management consultancy. Its stock (ticker symbol: MMC) is listed on the New York, Chicago and London stock exchanges.
