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Organisational context: Multinational Insurance

'That's something I've not mentioned at all which I should do because it's absolutely fundamental to this business. Re-insurance ... I mean if an ICI factory goes up in France you're looking at millions of pounds worth of damage. X-Group can't afford to incur losses like that, on a one off basis it could but not in general, so we re-insure this business and the way that we deal with this is that we say that we're prepared to lose a million pounds on any one claim and we're prepared to lose 10 million pounds on any particular catastrophe. And so, ... that is our re-insurance strategy and we organise our re-insurance arrangements to ensure that we don't ever expose ourselves to anything over and above those figures.

... [To do that you've got to aggregate what] your exposures are at locations ... Which is very difficult. And equally if you can't do it you can't buy the re-insurance because the re-insurers will say well hang on we don't know what we're letting ourselves in for here if you can't give us the information in terms of your exposures. So that itself presents a big problem. Because the business really stands or falls by how successfully it's re-insured and ultimately that, I think, is the key thing. So that was the problem, I'm sure there are other problems that I've not mentioned but it was all a bit of a mess really.'

X013 page 011.01 (tape 02..) Gordan Notes/Trans/Tape 30/09/93

Social influence: Organisation: Systems
Technical influence:


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