Guy Carpenter & Company has launched the public sector specialty practice, a global team focused exclusively on the risk management needs of governmental agencies and entities.
The company has stated that the creation of private sector pre-financing options will not only relieve the burden on taxpayers and in turn, public finances, but will migrate the management of natural catastrophes to insurance and reinsurance companies where claims handling and risk management is core to their operations.
Guy Carpenter’s public sector specialty practice currently advises approximately 100 public sector engagements that entail pre-event reinsurance mechanisms around the world that address a variety of loss causes including earthquake, hurricane, flood, and terrorism.
The company has engagements that also address a variety of segments in the public sector arena including property, workers compensation, credit, healthcare, and micro-reinsurance.
“Given the increasing challenges associated with risk management and the impact that catastrophic loss can have on the fiscal position and tax base of government entities across the globe, we believe greater coordination is required to manage this risk across the public and private sectors,” commented Britt Newhouse, chairman of Guy Carpenter and chair of the Public Sector Specialty Practice.
“With our extensive experience, global resources and market insight we are uniquely positioned to help public entities identify the best solutions to transfer this risk to the private sector,” he added.
Approximately 73 percent, or $2.7 trillion of natural catastrophe losses globally between 1970 and 2014 were uninsured.
Unfunded exposure to uninsured property, health, life and employment losses extends well beyond natural catastrophes and includes disasters stemming from man-made and other emerging risks.
Cyber-attacks, infectious disease, and environmental accidents are just some of the areas in which public entities are expected to respond despite fiscal constraints.
Jake Clark, managing director and leader of the practice in North America, said: “Public sector entities are grappling with a host of challenging societal pressures that are being exacerbated by changing demographics, such as aging populations and growing exposure to natural and man-made catastrophes.”
“Guy Carpenter believes there is a growing need to build and expand effective public-private partnerships to more effectively manage the challenges associated with catastrophic loss because of the fiscal constraints brought on by unprecedented economic and budgetary burdens, including expanding public sector debt.”
“In many cases these represent unfunded loss exposures that fall on the backs of taxpayers or communities that lack the fiscal resources to efficiently manage them.”
Peter Book, head of Agriculture Practice for the Asia Pacific region, will lead this effort in Asia Pacific and Aidan Pope, CEO of Latin America and Caribbean (LAC) operations, will oversee the team for the LAC region.
