By Andrew Cave

IT’S become popular to say we live in riskier times than a decade ago; that risk management should be on the boardroom agenda and needs to feature high up.

Behind all the rhetoric, I’ve been wondering if this is true; however. If you’re running a widgets manufacturer in Birmingham, are the 2008 markets any more dangerous than those of 1998, when Russia was in serious crisis and the ‘Tiger’ economies caught a serious case of Asian flu?

Is the credit crunch fallout from America’s sub-prime mortgage folly any worse than the near seizing-up of US market liquidity that led America’s Federal Reserve to bail out over-leveraged hedge fund manager Long Term Capital Management?

Similar questions can be asked about the collateral damage to insurers. Will the liability claims from the credit crunch be any heavier than those after the crash of the dotcom boom that started in 1998?

Times like these call for some perspective and that’s what I’ve been seeking to do in a series of articles for The Daily Telegraph.

We asked people in business, sport and diplomacy to spell out what risk management means to them, illustrated by a recollection of the biggest risk they’ve taken in their careers.

The results are illuminating. First come the business risks. Tim Smart, President of BT Global Services, recalled being put in charge early in his career of changing the London telephone code to 01 to 071 and 081 and switching BT’s charges to a time-based, rather than unit-based, tariff.

If the first project had gone wrong, the risk was that nobody would be able to call anyone in London, he said, while a failure of the second would have meant BT would not have been able to charge any customers.

Prudential chief executive Mark Tucker recounted the risks of the company’s investment in Asian markets, which he built up from a tiny base to today’s position where they represent half the group’s business.

Aviva Chief Executive Andrew Moss recalled how before the 2006 acquisition of AmerUs, he weighed up the poor track record of British companies making big US acquisitions against the potential cost of failing to be in the world’s biggest and fastest growing life insurance market.

Then there were the more personal career risks. Former Aviva Chief Executive, Richard Harvey, spoke from Ghana of deciding to retire at the age of 57 and work to give something back to society by helping with water and infrastructure projects in some of Africa’s poorest regions.

Lloyd’s Chairman, Lord Levene, recounted the personal career risk he took when, after successfully building up his defence business United Scientific Holdings, he took the unusual step of moving into the public sector as a civil servant because he was looking for a new challenge. He ended up as an adviser for former Prime Minister John Major.

Then there were the tales from individuals who have put their very lives in danger.

Record-breaking yachtswomen Dame Ellen MacArthur knows that when she’s solo-sailing, she’s most likely dead if she goes over the side of the boat at sea.

When she’s competing, she considers the risks of shinning up the mast to control the sails.

If she doesn’t make the climb, she may not be fast enough to win a race or break a record. If she does, she may be unable to control the boat for up to three hours.

Finally, Simon Collis, British ambassador to Syria, know what it is like to put one’s life on the line.

Whilst consular-general in Basra, he once learned of a plot to kill him, including the proposed place of the attack. On a separate occasion, he discovered that a militia group had videotaped all his movements. Even in his current posting, the embassy is moving to a safer location after an attack on the US Embassy.

So is today really that much riskier than the recent past? No, said Smart, citing living through the Cold War as a palpably more dangerous experience.

Yet the events of 9/11 were the most visible signs yet of a new global terrorism; the growth of the internet means hackers have the ability to paralyse networks. And global warming threatens to change the geophysical character of the very world we live in, with potentially cataclysmic results.

Sometimes, it seems that today simply feels riskier than the business environment of a decade ago.

As Moss pointed out, the flows of information around the world are many times faster than ten years ago. We are what we know and if we know risk then we have to choose how to deal with it.

That’s no bad thing. Risk may rise and fall but it will never disappear; as Lord Levene illustrated with an anecdote about a tricky period of communication with the Financial Services Authority, soon after Lloyd’s came within the regulator’s remit.

Lloyd’s, the regulator admitted, was the single riskiest organisation it ever dealt with. Levene was swift to reply. “I’m glad that’s the case,” he countered, “If we weren’t risky, we wouldn’t have a business.”

If Christmas didn’t exist, would insurers invent it? I ask partly because someone may need to if my local paper’s survey of school nativity plays are anything to go by.
Of 35 schools surveyed, only a handful are putting on traditional Nativity plays; the rest vary from The Most Disgruntled Snowman to The Lucky Owl and The Hoity-Toity Angel. There’s even Hosanna Rock, featuring angels disguised as tax collectors.

At least even these have something to do with the traditional meaning of the festive period but the risks of Christmas have been growing in recent years.
Whether it’s a perceived fear of appearing politically incorrect or insufficiently ethnically diverse or a public liability worry about the town centre Christmas tree toppling over, the Christmas lights catching fire or unseemly behaviour at office Christmas parties, those 12 days carry more risk.

Or maybe they just seem riskier. After all, people have been taking risks at Christmas ever since the first one.
Did Mary and Joseph have travel insurance when they set out on that long road to Bethlehem?
What potential health and safety claims did that innkeeper let himself in for by renting out an unlicensed stable to a woman in the middle of labour?

And just how clever were those so-called wise men who ventured into the desert on unprotected camels carrying uninsured gold and valuable perfumes?
In comparison, our homely Christmas celebrations seem safe and secure but how many carol singers have personal liability cover when they venture onto expensive patios or fire risk cover when they carry lanterns or candles?
What about the risk of giving someone food poisoning by under-cooking the turkey or the danger of a sexual harassment lawsuit from giving someone a peck under the mistletoe?
At the domestic level, most householders will happily take on such risks but most do have cover for the occasion that the Christmas lights set the house on fire or the heartbreak of having their presents stolen in a burglary.
If your car is wrecked on the way home from a candlelit Christmas service; if flash floods or freak storms mean you have to be re-housed or if that Christmas holiday of a lifetime in Disneyland has to be cancelled because of illness, insurance cover ensures that it is a drama, not a crisis.

As Caroline Rowlands and Arnie Skelton of Cheadle, Cheshire, discovered a few years ago, even the Christmas rubbish carries risks.
In preparation for their forthcoming wedding, gifts for bridesmaids and others taking part, plus wedding clothing, accessories and the marital rings were mistakenly taken to the local authority tip, mistaken for discarded bags and boxes left over from Christmas.

Fortunately for them, a £45 premium paid for wedding insurance, underwritten appropriately enough by Ecclesiastical Insurance, put matters right and the couple received £1,020 for the lost rings, £965 for wedding attire, £375 for lost presents and an express courier charge of £211 to deliver replacement shoes in a hurry.
At the corporate level, insurance is again the ingredient that gives councils, communities, churches, hospitals and schools the reassurance and comfort levels needed to organise major Christmas events.
When something goes wrong, insurers form part of the social safety net that cleans up the mess and pays for it – something often ignored when premiums are rising or no-claims bonuses disappear after payouts.
Media attention will no doubt focus this Christmas on those families who are celebrating in caravans outside their still-inhabitable homes, wrecked in the summer floods. But in many cases insurers are footing the bills.
Insurance may also cover you if you have to fly home early from that Christmas holiday, order a complete recall of your company’s Christmas hampers because of a health and safety risk or cope with a risk in your supply chain at a time when there are few alternative suppliers, threatening your ability to continue trading.
It’s all business as normal for insurers, whose job is all about giving society the freedom of mind to continue operating as normal.

Whether it stretches to actually inventing a risky event that didn’t previously exist is another matter, however. No doubt, if insurance risks advisers had been around at most of the original occasions that have given rise to modern festivals, from Easter to Guy Fawkes Night, they would probably have advised against going ahead.
But, despite the grey image that insurance still struggles with, underwriters and brokers are innovators in protecting risks, pioneering everything from kidnap insurance (invented by a Lloyd’s insurer in 1932, shortly after Charles and Anne Lindbergh’s baby was kidnapped) to specialist cover for lapdancers (don’t ask). I dare say that if one of the industry’s forebears had encountered the Wise Men 2,000 years ago, he or she might even have worked out a deal with them to cover for their return trip home.
Here’s to a happy insured Christmas.

How sexy can insurance really be? I only ask because I’ve been rather taken aback by the advertising campaign seeking to relaunch the former Liverpool Victoria Friendly Society as a trendy general insurer for bikers and lovers worldwide.

They say that in the aspirational world of advertising you can be whatever you want to be and LV, as the 164-year-old society prefers to be known as these days, is rather pushing the envelope.

When I met chief executive Mike Rogers two years ago, he was disparaging the heavy antique furniture in the organisation’s City office (he said it made the place look like a museum) and bemoaning a corporate name so long that it wouldn’t fit on the stumps in its English cricket sponsorship.

What could be done with this long moniker, he questioned wearily. Would people think the firm made luncheon vouchers if it shortened its name to LV or that it was a pub if it renamed itself “The Vic”.

Now the rebranding guys have been in and convinced the organisation that LV is a kind of text message shorthand for love and aren’t they meant to be a friendly society anyway?

The result is a new logo that sees the V become a heart and an ad with romantically-entwined young lovers roaring about on motorbikes that are presumably insured by what used to be Liverpool Victoria.

Now direct insurers’ ads have always been somewhat at the tabloid end of the scale, whether they feature red telephones or householders screeching because they’ve just been quoted happy for home or car insurance.

It’s difficult to see commercial insurers feeling the need to do anything similar to attract business to business customers.

But actually, isn’t what they do much more cosmopolitan, exciting and glamorous than the mere business of covering cars and homes for consumers?

First, there is the simple activity of getting on with life. In the world of hi-tech media and communications, how many satellites would get launched if insurers weren’t there to underwrite the chance that they might go out of orbit and never be seen again?

So you might say goodbye to your TV digibox and your summer holiday and favourite pastimes might have to go too.

Would airlines be able to operate without insurance? Would big football matches kick off or sound systems buzz into action at major rock concerts? Would you even be able to take a stroll in a park if the public liability insurers suddenly refused coverage?

You get the picture and I haven’t even mentioned disasters yet. Where would the victims of the California fires, Hurricane Katrina in New Orleans, the floods in Yorkshire, Tewkesbury and Oxford and yes 9/11 itself be without someone to pick up the tab?

If you’re reading this, I’m probably preaching to the converted but the point is this: squeezed as they are by cyclical pricing and needing to be able to attract the best new talent, why don’t insurers spend more time and money raising the profile of what they do?

Commercial Union had a decent go at this a while ago and people still remember its tagline of never making a drama out of a crisis.

More recently Zurich has followed up along a similar theme with its reminder that it exists “Because Change Happenz”.

However, the industry could go a great deal further. It’s not enough for it to bemoan that it is still regarded as grey, dull and uninteresting, despite employing hundreds of thousands of people and making a huge contribution to the national and global economies.

It needs to work hard with public perceptions to reverse and redress the negative image that people have of insurance and to start to realise that it is the unregarded cog that keeps the global machine functioning.

Insurance is about life and about death but it’s also about being able to take all kinds of risks at personal and commercial levels because if things go wrong there will be someone to pick up the tab.

It allows motorists to brave the M25. It permits Manchester United to let Wayne Rooney to play for England even though they know he might come back injured. And it ensures that container ships, arguably the engines of globalisation, can function despite the risk that their cargos might join the hordes of treasure under the sea.

Insurance also plays a part in preparing for the future, whether it’s dealing with climate change or putting a spacecraft on Mars. And it underpins human relationships, from buying an engagement ring to buying a home.

Is that sexy enough a script for some enterprising insurer to take to adland? If they can produce pink hearts from the stuffy old Liverpool Victoria, there must be a way of revitalising the image of commercial insurance.

It’s that time of year again. The pubs are strangely emptier while reservations in the classier restaurants are suddenly possible at short notice.

That’s as long as you’re in Leadenhall Street, of course. Over the Cote d’Azur in Monaco, brokers and underwriters queue for Eu5 cups of coffee, wrestle to get to the bar at the evening receptions and can’t move for reinsurers, whether they be from Munich, Montpellier or Moscow.

It’s one of the delicious little ironies of the insurance market. For 51 weeks a year, London’s commercial insurers have to be offered gold-plated incentives to step more than five minutes away from Lime Street during working hours. For the remaining week, they’re a whole nation away.

If you want to find a leading broker or underwriter this week, there’s a good chance he or she will be in the Monte Carlo Casino rather than the Lloyd’s tower. And they don’t even normally have the excuse of going off to watch the rugby.

Rendez-Vous de Septembre, the reinsurance industry’s annual boondoggle, is under way again. The question really is why.

Every year since 1957, the major players in the world reinsurance market have gathered in this city more renowned for gambling and the Monte Carlo Rally.

Ostensibly reinsurers, insurers, brokers, lawyers, bankers, accounting and rating companies and specialist journalists come to discuss issues that concern the market and to kickstart the annual negotiation process prior to the renewal of reinsurance treaties.

This is an important business. As many reinsurance contracts are automatically renewed on the 31st of December, possible cancellation of these contracts must be announced by the end of September. In theory, the event also encourages high level contacts which can lead to strategic alliances.

So long live the Monte Carlo Rendez-vous. If it didn’t happen here, it probably wouldn’t happen at all but brokers get to compete with each other as to who can host the most lavish parties

In practice, it’s rare to meet anyone who remembers actually doing any business in Monte Carlo. The serious money gets talked about in earnest a bit later in the year, across the Alps and the Rhine in Baden Baden.

Rendez-vous is a strange event, not so much a conference – there are hardly any speeches –as an excuse to turn up to socialise like a girl with an old-fashioned dancecard.

It’s questionable, however, whether the reinsurance community needs to go away to become sociable.

There are plenty of coffee shops near the Lloyd’s trading floor, which of course was one itself a few hundred years ago. And in this electronic age, couldn’t much of this bonhomie be conducted over emails, text messages and blogs?

Then there’s the issue of why the meeting place is always Monte-Carlo – apart from the fact that it’s perfect if you like hanging around in Ralph Lauren polo shirts and chinos, showing off your Ferrari or latest Bentley or partying on yachts.

The website of the event, run by an organising committee with representatives from 15 nations and always presided over by the chairman of the Assurances Générales de France, does its best to come up with some reasons.

Firstly, Monte-Carlo is a neutral country with no local insurance company. Then, there are the excellent hotels all near each other so insurers can walk to most appointments.

Never mind the fact that rooms start at about Eu650 in the Hotel de Paris, where you’ve got to book a year in advance if you want one of the Eu3,500 suites with a good view.

Moreover, Nice international airport is a mere helicopter ride away – why go by taxi when it’s all on expenses?

Finally, the principality is one of the safest areas in the world – just as well when some of the world’s biggest financial risk-takers are in town.

But here’s another reason why we’re rendez-vousing in Monte Carlo, not Morecambe. The conference is managed jointly by the Rendez-Vous de Septembre Secretariat and the Direction du Tourisme et des Congrès de Monaco.

After all, with 2,500 professionals from 80 countries converging at the same time, it’s the principality’s second biggest annual event after the Monaco Grand Prix – and probably more lucrative as Formula One fans generally come for the day, sleep well out of town and bring their own baguettes.

So long live the Monte Carlo Rendez-vous. If it didn’t happen here, it probably wouldn’t happen at all but brokers get to compete with each other as to who can host the most lavish parties.

With any luck, all attendees also get a suntan, a sprinkling of new contacts and bragging rights over dinner for managing more 30-minute meetings in a day than their counterparts.

London gets a rest and next week, the pubs and restaurants around Lime Street will be back to normal, with stressed insurers hard at work. There is, after all, an estimated $20bn of reinsurance renewal business to discuss.