While these concern all European risk managers, the approach taken by some in France contrasts with that in other countries. For example, having been told by insurers that premiums would continue to increase, there was surprise, indeed almost disappointment, at the start of last year when some large corporations experienced a significant drop in property premiums, in some cases ranging from 20% to 50%. The disappointment arose from the feeling that the market had given misleading forecasts which risk managers in turn had passed on to their chief executive officers.
Saying that premiums will rise and there is nothing you can do and then seeing a complete reversal does not promote internal credibility.
Similarly, revelations in the US arising from New York Attorney General Eliot Spitzer's enquiry into brokers' remuneration have caused some French CEOs to wonder whether their own organisations are being treated unfairly by their brokers. In fact, the situation with contingent commissions in France is different to that in the US. French brokers are mostly remunerated through commissions on premiums and only a few large brokers benefit from contingent commissions.
However, in order to dispel doubts in the board room, French risk managers are calling for a far higher degree of transparency from brokers.
