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 Successfully managing the unique risk profile of the forest products industry is critical to providing a competitive advantage in a global marketplace.
The Forest Products Industry Practice of Marsh blends insight and experience with innovative thinking to provide solutions that create real economic value for clients. These clients benefit from Marsh's extensive network of contacts and relationships that includes virtually every insurer in the world, capital markets, thousands of client organizations, and countless service providers.
Marsh's Risk Consulting specialists address recurring risk issues in the forest products industry to help clients effectively develop and implement risk solutions when managing a business. Our innovative solutions for the forest products industry include:
See our best practices on property and casualty programs and other risk management topics.
- Risk Fusion - The volatility in the price of both raw materials and finished goods has long had a highly disruptive effect on the forest products industry. Risk Fusion packages many uncorrelated risks together to take advantage of the natural portfolio effect. Uncorrelated risks tend to offset each other to some degree. By packaging traditionally insurable risks with financial risks such as currency, interest rate, and various commodity price risks, we can create a portfolio whose overall volatility is less than that of its parts and, therefore, more economical to insure. While this may not cancel out all the volatility a company faces, it can provide some element of control on a more economical basis than the traditional practice of treating each risk on its own.
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- Dual trigger programs - Dual triggers take a different approach to incorporating financial risks into traditional insurance programs. The client's retained risk is structured on an aggregate basis across all lines of insurance. The amount of this retention is designed to be reduced when a second risk, such as interest rates, increases above a given range. In this way, the client's overall exposure to all risks is kept within predetermined limits.
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- Mergers and acquisitions / due diligence - Further consolidation in the forest products industry is to be expected. At the same time, shareholders are demanding a higher return on their investment. This creates a need for fast, thorough due diligence in order to avoid investment surprises. Marsh's M&A experts have extensive experience at evaluating exposures on short notice to help integrate new operations and realize cost savings quickly with minimal loss of productivity.
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- Environmental - Recent deals structured for forest products industry clients demonstrate our ability to deliver a broad range of services associated with providing environmental clean-up, cost capping, and risk strategy development. Substantial staffing commitments by the Environmental Practice at local and regional levels demonstrates our focus in this key strategic area.
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- Best Practices - The Forest Products Practice has benchmarked best practices extensively on property and casualty programs, in addition to a variety of other risk management topics. The result is a database of best practices information about policy forms, retentions, pricing, and other issues. This information is kept in a secure format to protect clients' proprietary information. The information is available to Marsh professionals to help them make sure we deliver the best service to our clients every time we go to market.
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