Having witnessed the tsunami disaster first hand, the chairman of Lloyd's made a call for early warning systems, which, he said, were vital to prepare for global risks, both natural and corporate.
Lord Levene of Portsoken, who recently was named to a second term as the insurer's chairman, spoke to senior industry officials in Boston on the need for better risk management and increased efforts to mend the industry's reputation. “It is not only the insurance industry and corporate boards that need to address risk management,” he said. “The world needs to prepare for the most unthinkable disasters. Risk management should be addressed by everyone.”
Levene, who was vacationing in Malaysia with his family when the tsunami struck, noted that the event came at the end of a record year for natural catastrophes, with insured losses of more than $50 billion. Major disasters in 2004 included a record typhoon season in Japan and the four hurricanes that damaged one in five dwellings in Florida. This was a sharp reminder that the risk from natural catastrophes is increasing and that insurers need to rethink how they evaluate financial risks, Levene warned.
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