Taisei Fire and Marine Insurance Company
Time Frame: 2001 to 2002
The case happened on between 2001 to 2002.
Taisei Marine and Fire InsuranceIn November 2001, following the September, 11th 2001 (“9/11”) terrorist attack on the World Trade Center, Taisei Fire and Marine Insurance Co (TFMI) collapsed, due to catastrophic insurance claims of $2.5 billion.
TFMI, together with two other Japanese companies, had a management agreement with Fortress Re, which pooled the funds of the companies to share the risks of reinsuring aviation portfolios. All four planes that crashed on the World Trade Center and other sites during the 9/11 attack were reinsured in the Fortress Re pool.
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, Ltd. offers property and casualty insurance services. The company's services include underwriting of insurance policies falling into the following categories: fire, marine, personal accident, voluntary automobile, compulsory automobile liability, earthquake, machinery risk, contractors' risk, general liability, workers' compensation, miscellaneous pecuniary, loss and medical expense. The company was founded in 1920 and is based in Tokyo, Japan.
This study builds upon the Consultant Perspective to predict and provide resolution to Taisei Fire and Marine Insurance Company. Regardless of the current crisis, risks have always been a problem for business administration but tend to be ignored since they have been perceived as unavoidable. Given recent dynamic waves of internationalization, globalization, deregulation and integration, however, risks can cause significant impacts on business administration where managers can no longer ignore risks. Observing cases in which effective and efficient risk management contribute to business success when business failure was a real possibility; managers learn to manage and control risk as critical strategic issues.
Statement of the Problem:
Failure to keep effective track of growing risk concentrations and used parties to broker business, subject to delegated authorities.
Objective: To identify a cohesive core strategies by recognizing and managing the risks through displaying strong underwriting and reserving policies, competitive cost structure and investment returns, and prudent risk management structures and risk appetite.
Areas of Considerations:
a. Japanese Risk Management
Taisei Fire and Marine Insurance Company used J-type model of Risk Management.
This demonstrate that the individuals and businesses in societies that place a greater
emphasis on solidarity are less likely to seek legal redress for perceived wrongs. In countries such as Japan, a strong sense of group look for stable and balanced, rather than quick and decisive, solutions and for less need for detailed written contracts. Japanese people live in dependent relationships and thus rely on each other relative to risks. These findings are consistent with the characteristics of Japanese risk management in the society
where the people and corporations tend to be insensitive to risks and the management of risks.
b. TMFI was Japan’s 15th in the list of top non-life insurers. TMFI’s solvency margin (assets over liabilities) was 815%. The norm set by Japanese authorities being 200%. This margin was calculated to assess financial strength. TMFI had large volumes of domestic Japanese property and casualty business. It also had a large volume of inward reinsurance (reinsurance business accepted by the insurer or reinsurer, but not given up to another insurer) through its US reinsurance pool managed by Fortress Re, a North Carolina based reinsurance managing agency.