Risk Control

A growing number of insurance and risk control professionals perceive a direct correlation between Going Green and risk control.  

“Travelers believes that commercial property owners who embrace ‘green’ technologies are likely to be more risk management-minded, practicing greater care in building maintenance and operation.” Michael Klein, President of Commercial Accounts 

"Overall, we do believe that green buildings are better physical risks than traditional buildings."  Steve Bushnell, Product Director at Fireman’s Fund

 “Green customers tend to present better risk profiles, which can be translated into lower rates”  AXA Insurance Group Website 2008

 

AGPOM agrees completely with these statements.  Indeed buildings and managers that enforce green standards benefit from higher employee productivity, reduced absenteeism, improved product safety and lower energy bills.  All of which contribute to the overall management of company-wide risk; risk that includes not only bodily injury and property damage, but business profitability risks, environmental risks and geo-political risks. By joining AGPOM, members can inherently improve their overall control of risk.

The following is en excerpt from a 2008 report headed up by Evan Mills, Ph.D. with the University of California entitled From Risk to Opportunity:

"Win-win approaches to risk-management include a whole class of strategies that capture the insurance loss-prevention benefits of certain energy-efficiency and renewable-energy strategies. Nearly 80 technologies and practices have been identified that can lower greenhouse gas emissions while reducing the direct risk of property damage from mechanical equipment breakdown, professional liability, builders’ risk, business interruption, and occupational health and safety.

Many risk-management benefits have been associated with green buildings ranging from improved indoor air quality to enhanced disaster resilience, and there are numerous ways in which insurers could capture these benefits. The disaster-resilience link is particularly pertinent… e.g. the ability of facility-integrated solar power systems to avert business interruptions following outages on the electricity grid or the resistance of foam insulation (as opposed to less-efficient fiber-based products) to water-logging after floods.

Commissioning of building envelopes has been noted to not only support improved indoor air quality and energy savings, but also to reduce moisture damage following severe hurricanes.

Another win-win opportunity is the reduction in rooftop “ice dams” caused by excessive heat loss. Energy-efficient construction mitigates the ice dam hazard (a major source of insurance claims in northern climates) while reducing the greenhouse-gas emissions associated with heating energy use.

A clear example pertaining to fire safety—a familiar concern for insurers—is the elimination of fire hazards with energy-efficient lighting solutions that give off less heat. FM Global has recognized this in its promotion of fire-safe and energy-efficient compact fluorescent replacements for halogen lights.

With rising concerns about occupational health and safety, as well as business interruptions, risk managers will find particular opportunities in industrial and high-technology settings. Recent work in data laboratories and data centers has identified strategies that enhance safety and reliability while reducing energy use and greenhouse gas emissions. Downtime in these facilities can yield large business-interruption insurance claims."

 

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