In an increasingly complicated economic world, providers of risk and insurance solutions are expected to offer highly specialised expertise.
A major force drawing risk managers and their risk management/insurance broking partners into a closer relationship is the application of specialist expertise to newly emerging client exposures. This development is vital in an economic world where new opportunities are inevitably accompanied by new risks.
Specialisation is nothing new, for certain. At the turn of the 20th century, Donald R. McLennan, one of the pioneers of Marsh & McLennan Cos, travelled on a railroad car for 30 consecutive days and nights to learn about the burgeoning railroad industry and the exposures it faced. As a result, he became probably the most authoritative expert of his time on railroad risk. Interestingly, our rail practice remains an important part of our transportation specialty. Today, there are many counterparts to the railroad of Mr McLennan's time. New risks relate to the deployment of new technologies and the use of e-commerce; globalisation, mergers and acquisitions, new product introductions, increased emphasis on corporate governance and the appearance of new liabilities. Each of these areas – and others – demand the application of highly specialised risk knowledge. At Marsh, we have responded to this imperative by developing and organising specialty practices that focus on all the major areas of risk exposures faced by our clients.
In addition, providers of risk and insurance solutions are expected to have in-depth knowledge of the business operations that their risk manager clients work for – in fields ranging from entertainment to high-tech to healthcare and all the other major industries that now make up the world of global commerce. This is why Marsh now is placing an emphasis on employing professionals who do not necessarily have extensive experience in risk and insurance, but have operating experience within the industries we serve.
Another approach to specialisation at Marsh reflects the way our clients want their risk solutions and services delivered. This factor generally reflects the size or type of the client organisation. Again, we have developed practices that focus on small, mid-sized and large organisations. We also have practices devoted to high net worth and affluent individuals, affinity groups, and professional associations. Each of these classes of clients has a distinctive buying style and wants us to work with them in different ways. Organising our operations into specialty practices enables us to respond effectively to these preferences. Rounding out our specialty focus based on the character of the client is our Guy Carpenter subsidiary, whose professionals focus on insurance and reinsurance companies.
Placement of client risks into the insurance and financial markets is another basis for our specialist strategy at Marsh. We have created the global broking practice, whose professionals work with the markets in close concert with our client executives and their clients. There is further specialisation within this organisation, with the brokers focusing on individual carriers, product lines and client industries. This approach provides unmatched insights into the worldwide markets and enables us to optimise programs to fit our clients' risk profiles.
Working in teams
In the real world, our specialty practices frequently work in teams under the co-ordination of our client executives. This enables Marsh to mobilise our specialists in innovative ways. Some cases in point:
These are just a few of the ways Marsh's specialist risk expertise is being organised and applied, but they illustrate a fundamental business dynamic: as companies reach out to grasp new opportunities for growth, they inevitably confront new, more complex risks. Risk managers and their partners – particularly the risk specialists – are playing a central role in this economic scenario.