MMC Experts Say Economic Crisis Has Affected In...
Recession, Combined with Last Season’s Catastrophic Hurricanes, Provides Added Impetus for Effective Preparedness, Planning and Risk Management Best Practice
MMC Experts Say Economic Crisis Has Affected Insurance Industry’s Ability to Manage Severe Hurricanes
Media:
MMCMMC
Laura Cora, 212-345- 2731Laura Cora, 212-345- 2731
laura.cora@mmc.com
oror
Investor:
MMCMMC
Mike
Bischoff, 212-345-5470Mike
Bischoff, 212-345-5470
jmichael.bischoff@mmc.com
A panel of experts from Marsh & McLennan Companies, Inc. (MMC) today convened to provide insight and analysis on how companies with operations or properties along the U.S. Eastern Seaboard and the Gulf of Mexico should be preparing for the 2009 Atlantic hurricane season, which begins June 1, 2009.
The panel, comprising executives from Marsh, Guy Carpenter and Oliver Wyman, discussed a range of issues including: challenges facing the U.S. energy sector in the coming season; the impact of Hurricane Ike in 2008 and what a similar storm might mean in the changed economic and insurance environment this year; and the latest developments in reinsurance pricing and capacity.
According to Kevin Stokes, Executive Vice President with Guy Carpenter and head of its Florida Operating Committee, a further tightening of the market is anticipated as the Florida property-catastrophe reinsurance renewal comes to a close at June 1, with rates expected to be slightly higher than the 13-to-14 percent increase experienced at April 1.
Mr. Stokes also remarked on the fine balance between supply and demand, noting: “Capital constraints have led to increased prices, but they’re not as severe as many anticipated. We think this trend will continue through July 1. A bad cat year or another financial market shock, of course, could change this. But, for now, the balancing act between supply and demand is working.â€
With respect to the energy sector, an active hurricane season could pose significant challenges: “Last year, many oil companies operating in the Gulf of Mexico had adequate insurance coverage and cash to cover the cost of – and quickly make – the significant repairs needed to address the damage caused by Hurricane Ike,†said Bertil Olsson, Energy Leader for Marsh’s U.S. Energy, Mining and Power Practice. 'This year, however, with the price of oil and natural gas dramatically lower, cash flows are severely restricted – and insurance coverage for hurricane damage to the oil industry is dramatically limited compared to a year ago. That could translate into significantly longer repair periods, which in turn could impact production volumes and domestic oil and natural gas supplies should we have an active hurricane season that damages the region's oil assets.'
“Now more than ever, it is vitally important for us to understand the nature of the challenges posed by severe weather systems,†said Gerry Yurkevicz, Associate Partner in the Energy practice of Oliver Wyman. “There is a clear need to clarify and focus response capabilities across locations, functions, crews and supply base partners -- as well as focusing on the development of response strategies and the organization for the energy infrastructure of the future.â€
MMC is positioned strongly to provide a range of management, operational, and financial advice on natural disaster risks through its various operating companies, which are active in providing risk solutions across a range of professional disciplines.
An audio replay of today’s panel will be available tomorrow, May 29, at www.mmc.com.
About MMC
MMC is a global professional services firm providing advice and solutions in the areas of risk, strategy and human capital. It is the parent company of a number of the world’s leading risk experts and specialty consultants, including Marsh, the insurance broker and risk advisor; Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of HR and related financial advice and services; Oliver Wyman, the management consultancy; and Kroll, the risk consulting firm. With approximately 54,000 employees worldwide and annual revenue exceeding $11 billion, MMC provides analysis, advice and transactional capabilities to clients in more than 100 countries. Its stock (ticker symbol: MMC) is listed on the New York, Chicago and London stock exchanges. MMC’s website address is www.mmc.com.
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Media: |
| MMC |
| Laura Cora, 212-345- 2731 |
| or |
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Investor: |
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MMC |
| Mike Bischoff, 212-345-5470 |
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