BOSTON--(BUSINESS WIRE)--A presentation at the Insurance Risk Management Institute’s Energy conference (March 16 – 18 in Houston) will help energy companies refine their risk management programs in light of record low oil prices.
“Oil prices have fallen to historic lows from record highs in just nine months,” notes Alex Beaver, an energy underwriter with Liberty Mutual’s National Insurance Specialty – Energy operation. “This is forcing energy companies to dramatically change their operations and strategies to compete – even survive – in the new market. Fine tuning risk management programs to cost-effectively protect companies from the new exposures and risks inherent in today’s market should be a major focus of these efforts.”
During his presentation, Beaver will recap the factors that led to historic declines in the price of oil, review the impact of lower prices on energy companies – many of whom may be highly leveraged from taking on debt to exploit the boom – and highlight the key issues insurance buyers and brokers should focus on when updating risk management programs.
Those issues include:
- Communicating early – Understanding an energy company’s debt repayment services and leverage position is essential in fine-tuning that firm’s risk management program.
- Reviewing risk management program structure – Given the company’s new operations and existing debt, are there other structures that might better protect the firm? For example, lowering deductibles may help reduce the need for letters of credit.
- Rightsizing employment – It is important that compliance with safety policies be included in the process of evaluating employees to select those best able to help the company succeed in the new market. For example, the new market may create an opportunity to improve driver performance, by re-focusing on the way the company selects and manages commercial drivers, which is so important given the financial impact of auto claims.
- Focusing on workers compensation claims – Understand how current or pending layoffs may impact workers compensation claims, and what can be done to continue to keep employees safe, prevent fraudulent claims, and effectively manage legitimate ones.
Beaver will present the Oil Price Volatility: Impacts on Risk Management and Insurance Coverage presentation on Tuesday, March 17.
About Liberty Mutual Insurance
Liberty Mutual Insurance helps people preserve and protect what they earn, build, own and cherish. Keeping this promise means we are there when our policyholders throughout the world need us most.
In business since 1912, and headquartered in Boston, Mass., today Liberty Mutual is a diversified insurer with operations in 30 countries and economies around the world. The company is the third largest property and casualty insurer in the U.S. based on 2013 direct premium written as reported by the National Association of Insurance Commissioners.
Liberty Mutual is ranked 76th on the Fortune 100 list of largest corporations in the U.S. based on 2013 revenue. As of December 31, 2014, the company had $124.3 billion in consolidated assets, $104.0 billion in consolidated liabilities, and $39.6 billion in annual consolidated revenue.
Liberty employs more than 50,000 people in approximately 900 offices throughout the world, and we offer a wide range of insurance products and services, including personal automobile, homeowners, accident & health, commercial automobile, general liability, property, surety, workers compensation, group disability, group life, specialty lines, reinsurance, individual life and annuity products.
You can learn more by visiting www.libertymutualinsurance.com.