Former Secretary of Defence Michael Portillo put the value of risk management into a wider perspective when he spoke at the annual AIRMIC dinner. Portillo described the critical balance governments today have to make between fighting terrorism and preserving civil liberties. "It is all about measuring risk," he said.
Portillo addressed more than 600 AIRMIC members, their guests and AIRMIC partner organisations, mainly about the pleasures and perils of life as a politician, and then as an ex-politician in his present-day role as a broadcaster.
His fellow after dinner speaker, Evening Standard city editor Anthony Hilton, raised the question of risk in the context of financial markets, which he said were so awash with liquidity that the cost of debt issued by developing countries no longer reflected a proper risk premium. The normal market function regulating the cost of credit was not working, and he predicted "a painful adjustment" some time in the near future.
A powerful body
AIRMIC members control more than £5bn in insurance premiums, chairman Geoff Taylor announced at the annual dinner, which was held at the Royal Lancaster Hotel in London. The association has been able to put the weight of this market position behind its campaigns to improve the agreement and production of insurance contracts, known as contract certainty, and to make the broker compensation more transparent.
In both cases, explained Taylor, a lot has been achieved, but AIRMIC remains concerned about the possibility of a two tier market, where large insurance buyers get the commission disclosure they need but smaller companies do not. AIRMIC prefers to see less rather than more regulation, he said, but unless all brokers are transparent about commissions, more regulation may be what happens.
December 2006 marked the 43rd annual AIRMIC dinner, said Taylor, and revealed that he had not been alive when the first one took place.
