Sophistication in practice required for good risk managment

In light of today’s demanding global economy corporate risk managers must begin implementing more sophisticated loss prevention policies and processes, according to a presentation at the recent 2006 Industrial Fire World Conference in Baton Rouge.The speaker, chemical technical specialist for GE Insurance Solutions Gloal asset protection services unit Luis Arango, says that such endeavors will leave companies better positioned to meet shareholder, regulatory and insurance provider expectations and requirements.Arango recommended companies embrace the Highly Protected Risk (HPR) concept to help management properly mitigate risk exposures. The HPR concept is based on six key principles: * Proper risk management programs and “concerned” management * Construction exposure protection * Adequate interior protection * Protection against special hazards * Adequate exterior protection and water supply * Protected surveillance Arango cautions that while the absence of some of the above elements may not lead to a large loss, not having all elements in place can result in a higher potential for property loss and subsequent business interruption. “A loss usually affects many of a company’s stakeholders,” Arango says. “In many cases, it can tarnish the image or goodwill of the business, and require significant resources to help it recover.” Arango continues to explain that out of today’s corporate mergers to increase synergies and enhance performance for shareholders there has emerged a demand for proper risk evaluation and loss control.