Business Risks and External Organizations Affiliated with Marsh

This document discusses the business risks faced by Marsh, a global insurance broking organization, and its affiliation with external organizations like Doremus, IBM, and Beazley. It explores the consequences of defamation and cyber risk for Marsh.

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Marsh: Brief Overview
Marsh Inc is a corporation that is a global leader. It is an insurance broking and innovative
risk management organization. It has a work force of around 35000 employees, who works
together in order to satisfy their customers. Function of the company is to give advices to
their individual and all type of commercial clients. It is present and deals in around 130
countries in 500 offices all over the world. Marsh is a subsidiary of Marsh & McLennan
Companies (MMC) and owned by them completely.
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The main objective of Marsh is to help its clients by removing the phrase “What- ifs” from
their thinking by managing their risks effectively, providing them better quality then others
and transforming uncertainty into opportunities. Its current CEO is Peter Zaffino on the other
hand current CFO is Keith Walsh. The subsidiary organization of Marsh is Bluefin Group
Limited1.
External Organizations and their affiliation with Marsh
Doremus
It is a marketing communications agency, which focuses on providing effective and effect
services to its clients. The client of Doremus can be a business unit or it can be an individual
also. Clarence W. Barron founded the company in 1903. Since 1986 then it has been a
subsidiary of Omnicom. Doremus is an advertising industry and it headquartered in New
York. Besides USA, it also does business in some other countries like UK, Germany and
China2.
Doremus Company launched a global ad campaign for the publicity of Marsh. This is done in
order to restore the Marsh’s historical image and goodwill in front of its clients. The ad
campaign included different forms of Marsh’s advertisement like print, TV, mobile, out of
home and online. This step was taken by the company Marsh few years back with a view to
improve the image of the company in front of its clients3.
IBM
International Business Machines Corporations commonly known as IBM is a corporation,
which has considered as one of the information technology giants in world. Company’s
headquarter is in Armonk, New York and operating in more than 170 countries. IBM had
founded by Charles Ranlett Flint in 1911 and known as Computing- Tabulating- Recording
Company (CTR). In 1924, it had renamed as IBM. Currently the CEO of IBM is Ginni
Rometty and according to CNBC, report in 2018 financial year IBM earned revenue of $ 8.9
billion4.
IBM offers variety of products to its clients. From those products, one is Blockchain
solutions. It is a chain of blocks that are linked by using cryptography. Recently Marsh and
IBM come to a strategic agreement5. According to this Marsh is going to offer insurance
solutions on the Blockchain network of IBM. This strategic relation aims at launching
1 Marsh & McLennan, ‘About Marsh’ (Marsh & McLennan, 2019)
http://www.mmc.com/about-us/overview/about-marsh.html accesses 20th April 2019
2 Doremus, ‘Services’ (Doremus, 2019b) https://www.doremus.com/services/ accessed 20th April
2019
3 Doremus, ‘Ideas that connect’ (Doremus, 2019a) https://www.doremus.com/ accessed 20th April
2019
4 IBM, ‘ Review your Industry with IBM Blockchain’ (IBM, 2019c)
https://www.ibm.com/in-en/blockchain/industries?lnk=mpr_bua_inen&lnk2=learn accessed 20th April
2019
5Jordan, Novet, ‘IBM earnings and 2019 guidance beat estimates- stock jumps’ (CNBC, 2019)
https://www.cnbc.com/2019/01/22/ibm-earnings-q4-2018.html accessed 20th April 2019
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insurance’s commercial version. They will go to use a different platform to streamline every
process of insurance certification by providing speed and transparency6.
Beazley
Beazley is an insurance company that has three decades of experience in providing services
to its clients worldwide. It was founded in 1986 and its current CEO is Andrew Horton.
Beazley’s current CEO is Andrew Horton. It has more than 25 subsidiary agencies. A.M.
Best rates Beazley’s all businesses and services in excellent category7.
Marsh and Beazley both are big companies and recently they come in a strategic
relationship in order to provide cyber insurance cover that will be tailored and the breach its
breach response to help clients addressing evolving cyber risks. It is for manufacturers and
helps them against a range of cyber crimes, which they cannot do by having merely best
systems, controls, procedures in right place. Marsh and Beazley together have designed an
initiative named Marsh and Beazley Breach Response (BBR)8.
Selected Organizations and Business Risks
Business risk as the name suggests is the type of risk, which may or may not be faced by
the organization in its working time. It is the exposure of an organization to some type of
factors, which can be present internally or externally, may lead to loss or solvency of the
organization. In the above given paragraphs relation of Marsh with some other external
organizations is discussed. In this section, with reference to those selected external
organizations, their one major business risk will be discussed in detail.
Business Risk and Doremus
Doremus has already explained above is an advertising agency that deals with a range of
customers9. As it is advertising and market communication based agency, it can face a most
probable risk that is Defamation.
Defamation with context to media or advertising industry means, creating advertisements,
which makes untrue or disregarding statements about the other company, product or idea. In
advertising industry, it can be a very common problem. It can happen if the company has
less knowledge about the product, is doing deliberately or done by mistake. Whatever is the
reason, it can hamper the image of advertising industry severely and the image of innocent
one to some extent10.
6 IBM, ‘Discover a faster, more secure journey to cloud’ (IBM, 2019a) https://www.ibm.com/in-en
accessed 20th April 2019
7 Beazley, ‘Home Page of UK’ (Beazley, 2019a) https://www.beazley.com/uk accessed 20th April
2019
8 Beazley, ‘Who we are’ (Beazley, 2019b) https://www.beazley.com/united_kingdom/who_we_are.html
accessed 20th April 2019
9 Doremus, ‘Work’ (Doremus, 2019c) https://www.doremus.com/work/ accessed 20th April 2019
10 David, Rolph, ‘Defamation by Social Media’ [2013] 117 SLS Research Paper No. 13/81 16
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Business Risk and IBM
IBM is one of the best organizations known for providing information technology solutions to
its clients on a very large scale. Biggest business risk IBM or any other information
technology company can face is the Cyber Risk11.
Cyber risk is the risk that consists of factors that can cause harm to a business on digital
platform. These risk factors are of many types. It can be related to security also like hacking
of accounts or can be related with the details of the things, which are available online. The
software and working of IBM also mostly depends upon digital platform. In order to stay
competitive in nature it has to evolve according to the market needs12.
Business Risk and Beazley
Beazley Company as already explained in above paragraphs, is a well-known insurance
company of UK. The most probable business risk that can be faced by Beazley is the of
Underwriting.
Underwriting insurance risk is the type of risk that is most commonly faced by insurance
firms. While writing an insurance policy, inaccurate assessment of the risk involved in it or by
from some uncontrollable factors. The cost of insurer may increases and exceeds the
standard limit. It is known as underwriting13.
Analysis of Consequences of each business risk for Marsh Company
Defamation and Marsh Company
In above paragraphs it is already discussed that Marsh Inc is one of the large insurance
broking organizations in the world. They manage the risk by analyzing client’s risk profile and
objective than according to that give solutions. On the other hand, defamation is harming the
image and reputation of the other party by communicating the false statements about them.
It can be done in two types that is spoken and other is in written form. Spoken defamation is
known as slander and printed is known as libel14.
In insurance broking firm like Marsh Inc, defamation can exist. As already told defamation is
making false statement about others through advertising and advertising is the part of every
business. Similarly, in Marsh Company also, they need to advertise about their product and
companies present around them in their industry type need to advertise in order to promote
their products. In this way, Marsh or other insurance broking companies may affect or getting
11Nikhilesh, De, ‘ IBM Expands Blockchain Partnership With Insurance Broker Marsh’ ( Coindesk,
2018) https://www.coindesk.com/ibm-blockchain-expands-partnership-with-insurance-broker-marsh
accessed 20th April 2019
12Eling, Martin and Schnell, Werner, ‘What do we know about cyber risk and cyber risk
insurance?’ [2016] 17 TJRF 474
13 Lazar, Dorina, and Denuit, Michel, ‘New evidence for underwriting cycles in US property‐
liability insurance’ [2011] 13 TJRF 4
14 Kate, Maddox, ‘Marsh & McLennan Rolls out Rebranding Campaign’ (AdAge, 2011)
https://adage.com/article/btob/marsh-mclennan-rolls-rebranding-campaign/284231 accessed 20th
April 2019
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affected by other, through defamation15. The consequences of defamation in Marsh
Company can be of various types. Some of them are listed below:
 Insurance broking organizations that are the competitors of Marsh may use false
statements against Marsh in order to increase the sale of their own product. They
can also do it for reducing the sale of Marsh’s products by getting jealous.
 Another consequence can be that is Marsh try to falsely promote its products by
claiming things about it which are not actually real. Hence, in this way the image and
goodwill be Marsh can get hamper drastically.
Cyber Risk and Marsh Company
Marsh is an insurance broking organization that manages risk by analysis business portfolios
of its clients. Marsh is a very big organization, with its branches spread all over the world. It
also has a very large network digitally. On the other hand, Cyber risk as already told is the
risk that can be caused by factors involved in business network digitally and can hamper the
network or image of company, which may lead to loss.
In Marsh Company, they deliver many broking services to a range of industries. Their
business is largely spread in all over the world and dealing with thousands of customers.
This big network is not easy to manage and in order to tack the trading, Marsh have shifted
to digital platform from some years. Now a day’s most of the operational functions of Marsh
are done through online platform. It is always said that technology brings chaos also16. This
digitalization brings cyber risks and turn may leads to cyber crimes. Consequences of cyber
risk for Marsh can be:
 Marsh has a very good reputation in market but due to some type of cyber risk, the
image may get hamper drastically.
 For Marsh one type of cyber risk can be exposure of confidential dates of their client,
due to some hacking in the software. Sometimes a virus in the software and then in
computer can crash the major documents, which may lead to damage of client’s
data. These all can cause serious legal actions against company and in turn can
hamper the goodwill of the company.
Underwriting and Marsh Company
Growing businesses need a well management draft and strategy to manage their various
risks. Marsh as already mentioned is an broking organization that has works for all sizes and
types of organizations weather they are small or big, or of any industry type. On the other
hand Underwriting is the risk of not accessing correct amount of insurance by insurer before
doing insurance. Because of this at the time of maturity, they need to give more amount then
total premium collected. They underwrite it.
15 Marsh, ‘Governance’ (Marsh, 2019a) https://www.marsh.com/uk/about-marsh/governance.html
accessed 20 April 2019
16 Beazley, ‘Beazley and Marsh Launch cyber insurance cover and breach response designs for
manufacturers’ (Beazley, 2019)
https://www.beazley.com/news/2019/beazley_and_marsh_launch_cyber_insurance_cover_and_breac
h_response_designed_for_manufacturers.html accessed 20th April 2019
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In the case of Marsh Company, underwriting risk may arise due to various factors. If the
experts of the company underwrite the calculations of insurance as a broker, then the
company need to born this damage and may get in loss. If this continues then it can shake
the core of Marsh severely. The consequences of underwriting risk for marsh can be:
 Underwriting of broking amount leads to loss for the company. Broking amount is the
percentage taken by Marsh from both insurance parties.
 Sometimes the insurance company also underwrite the premium amount due to this
the broking rate of Marsh company may get affected. If this continues in long run
then it can hamper the image to Marsh in front of its clients.
Conclusion and Recommendations
Some recommendations for consequences of these three risks has suggested here for
efficient and effective working of Marsh.
Recommendations- Marsh and Defamation Risks
Defamation risk is harming the image of the person, product or a company by claiming false
statements about them publicly17. Consequences for Marsh, of these types of risks have
already discussed in above paragraphs. In this section, the recommendation about this risk
with reference to Marsh Company has tried to be given in following sentences:
 There are some defamation laws, which allow speakers, or writer to give their point of
view independently on the other hand also tries to protect the privacy and reputation
of the individuals. Hence, it has recommended to Marsh Company to follow every
rule of defamation.
 Unintentional defamation can be reduced by double and over checking of the content
that is going to be advertised by the Marsh Company.
Recommendations- Marsh and Cyber Risks
Now a day’s most of the people are having internet access and are using it for doing a
number of tasks. Because of this, most of the organizations are trying to getting involved in
digital platforms either as business provider or as a customer. This gives rise to risks related
to digital world. Cyber risk can affect and crash the data of Marsh Company drastically.
Hence, in order to protect it the company needs to take some measures18. Some measures
are also discussed in this report in following sentences:
 In order to protect the cyber risks the company has to protect the attacks from the
hackers. This can be done by using a very good antivirus device and taking help from
an IT expert or company.
 Marsh should take consultation from baking experts, IT experts and Business
Experts, regarding every measure necessary while doing business online. This will
help them to know and understand the digital form of working effectively.
17 Marsh, ‘Who We Are’ (Marsh, 2019d) https://www.marsh.com/uk/about-marsh/who-we-are.html
accessed 20th April 2019
18 Marsh, ‘Our Values’ (Marsh, 2019b) https://www.marsh.com/uk/about-marsh/our-values.html
accesses 20th April 2019
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Recommendations- Marsh and Underwriting Risks
Underwriting risk may arise when the insurer do not access the conditions effectively. In
underwriting condition, the insurer has to hold that part of insured in their custody for a very
long time or sell is at a loss. In case of Marsh, it is an insurance broking organization and
has a set pattern in which they first define the risk then design solutions for them and after
that deliver productive results19. Here are some recommendations which may help Marsh
company to avoid underwriting risks.
 In order to reduce this type of risk Marsh Company should appoint experts to check
and evaluate the percent of amount involved in the agreement between the company
and its client.
 If company somehow faces the underwriting risk then it should try to overcome the
loss as soon as possible. It is good then getting in loss completely loss.
19 Marsh, ‘You are Changing We are Too’ (Marsh, 2019c) https://www.marsh.com/uk/home.html
accessed 20 April 2019.
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Referencing must be completed before submission
All sources must be referenced in the body of your answer as well as in your reference list. See
the 930Specimen coursework assignment and answer for examples of how to reference
correctly in text and in your reference list.
References
Bibliography
Secondary Sources
Articles
Dorina, Lazar and Michel, Denuit, ‘New evidence for underwriting cycles in US property ‐
liability insurance’ [2011] 13 TJRF 4
Martin, Eling and Werner, Schnell, ‘What do we know about cyber risk and cyber risk
insurance?’ [2016] 17 TJRF 474
Rolph, David, ‘Defamation by Social Media’ [2013] 117 SLS Research Paper No. 13/81 16
Websites
Beazley, ‘Beazley and Marsh Launch cyber insurance cover and breach response designes for
manufacturers’ (Beazley, 2019)
https://www.beazley.com/news/2019/beazley_and_marsh_launch_cyber_insurance_cover_and
_breach_response_designed_for_manufacturers.html accessed 20th April 2019
Beazley, ‘Home Page of UK’ (Beazley, 2019a) https://www.beazley.com/uk accessed 20th April
2019
Beazley, ‘Who we are’ (Beazley, 2019b)
https://www.beazley.com/united_kingdom/who_we_are.html accessed 20th April 2019
De Nikhilesh, ‘ IBM Expands Blockchain Partnership With Insurance Broker Marsh’ ( Coindesk,
2018) https://www.coindesk.com/ibm-blockchain-expands-partnership-with-insurance-broker-
marsh accessed 20th April 2019
Doremus, ‘Ideas that connect’ (Doremus, 2019a) https://www.doremus.com/ accessed 20th
April 2019
Doremus, ‘Services’ (Doremus, 2019b) https://www.doremus.com/services/ accessed 20th April
2019
Doremus, ‘Work’ (Doremus, 2019c) https://www.doremus.com/work/ accessed 20th April 2019
IBM, ‘ Discover a faster, more secure journey to cloud’ (IBM, 2019a) https://www.ibm.com/in-en
accessed 20th April 2019
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IBM, ‘ Review your Industry with IBM Blockchain’ (IBM, 2019c)
https://www.ibm.com/in-en/blockchain/industries?lnk=mpr_bua_inen&lnk2=learn accessed 20th
April 2019
IBM, ‘IBM Blockchain’ (IBM, 2019b) https://www.ibm.com/in-en/blockchain?
lnk=mpr_bua_inen&lnk2=learn accessed 20th April 2019
Maddox, Kate, ‘Marsh & McLennan Rolls out Rebranding Campaign’ (AdAge, 2011)
https://adage.com/article/btob/marsh-mclennan-rolls-rebranding-campaign/284231 accessed
20th April 2019
Marsh & McLennan, ‘About Marsh’ (Marsh & McLennan, 2019) http://www.mmc.com/about-
us/overview/about-marsh.html accesses 20th April 2019
Marsh, ‘Governance’ (Marsh, 2019a) https://www.marsh.com/uk/about-marsh/governance.html
accessed 20 April 2019
Marsh, ‘Our Values’ (Marsh, 2019b) https://www.marsh.com/uk/about-marsh/our-values.html
accesses 20th April 2019
Marsh, ‘Who We Are’ (Marsh, 2019d) https://www.marsh.com/uk/about-marsh/who-we-are.html
accessed 20th April 2019.
Marsh, ‘You are Changing We are Too’ (Marsh, 2019c) https://www.marsh.com/uk/home.html
accessed 20 April 2019.
Novet, Jordan, ‘IBM earnings and 2019 guidance beat estimates- stock jumps’ (CNBC, 2019)
https://www.cnbc.com/2019/01/22/ibm-earnings-q4-2018.html
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Glossary of key words
Analyse
Find the relevant facts and examine these in depth. Examine the relationship between
various facts and make conclusions or recommendations.
Construct
To build or make something; construct a table.
Describe
Give an account in words (someone or something) including all relevant characteristics,
qualities or events.
Devise
To plan or create a method, procedure or system.
Discuss
To consider something in detail; examining the different ideas and opinions about
something, for example to weigh up alternative views.
Explain
To make something clear and easy to understand with reasoning and/or justification.
Identify
Recognise and name.
Justify
Support an argument or conclusion. Prove or show grounds for a decision.
Outline
Give a general description briefly showing the essential features.
Recommend with reasons
Provide reasons in favour.
State
Express main points in brief, clear form.
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