Insurance and governance in public-private security cooperation

Notes prepared for Panel Session 16.30-18.00: Public-Private Cooperation: Challenges and Opportunities in Security Governance, International Security Forum, 30 May 2011, Zurich

Beitrag zu Podiumsdiskussion zu öffentlich-privater Zusammenarbeit im Bereich Sicherheitspolitik. Beleuchtet diese Frage aus der Sicht der Versicherungswirtschaft. Drei Aspekte: 1) Ist der private Sicherheitssektor, der nicht zuletzt im Zuge von Irak und Afghanistan in den Fokus der öffentlichen Debatte gerückt ist, für die Versicherungswirtschaft ein attraktives Kundensegment? 2) Inwiefern können versicherungstechnische und -spezifische Instrumente angewandt werden, um Governance-Themen im Zusammenhang mit dem privaten Sicherheitssektor besser in den Griff zu bekommen? 3) Inwiefern üben Nichtregierungsorganisatonen Druck auf die Versicherungswirtschaft aus, in Governance-Fragen eine aktivere Rolle zu spielen bzw. inwiefern reguliert sich die Versicherungswirtschaft selbst, wenn es um den privaten Sicherheitssektor geht? Die Ausführungen werden von einem Vertreter aus der Rückversicherungswirtschaft gemacht.

Inhaltsverzeichnis (Table of Contents)

• The security sector as an insurance business opportunity
• Insurance as a governance steering tool
• Civil society pressure and insurance self-regulation

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

The author analyzes the role of insurance in the governance of public-private security cooperation. The main focus is on how insurance companies can influence the behavior of private security companies through their financial leverage and the potential impact on governance challenges.

• The attractiveness of the security sector as a client segment for the insurance industry.
• The potential of insurance as a governance steering tool for security Public Private Partnerships (PPPs).
• The role of civil society pressure and insurance self-regulation in addressing governance issues in security PPPs.
• The importance of transparency, accountability, and ethical conduct in the security sector.
• The need for a more comprehensive understanding of the security sector's size and profitability.

Zusammenfassung der Kapitel (Chapter Summaries)

The security sector as an insurance business opportunity

The chapter explores the potential of the security sector as a client segment for the insurance industry. It discusses the size and profitability of the security sector, highlighting the difficulty in obtaining reliable data. The author emphasizes the distinction between security sector companies as mere suppliers and those that are involved in sovereign security provision, arguing that the latter are more relevant for governance discussions. The chapter also analyzes the factors contributing to the security sector's reluctance to purchase insurance, including the prevalence of small, privately-held companies, the lack of transparency, and the industry's fragmentation. Finally, it addresses the insurance industry's reluctance to sell insurance to the security sector due to concerns about political risks and the difficulty of managing potential moral hazard.

Insurance as a governance steering tool

The chapter examines the potential of insurance as a tool to address governance challenges in security PPPs. It highlights the role of insurance in incentivizing risk-managing and loss-avoiding behavior. The author discusses the self-regulating impact of insurance companies' ability to grant or withhold coverage. However, he also emphasizes the limited role of insurance requirements in existing legislation and regulation regarding the security sector. The chapter concludes by acknowledging the potential of insurance as a governance tool but highlights its limitations, including its relative bluntness and the potential to increase the financial burden on security sector companies.

Civil society pressure and insurance self-regulation

This chapter focuses on the role of civil society pressure and insurance self-regulation in addressing governance issues in security PPPs. The author discusses the growing influence of non-governmental organizations (NGOs) in holding companies accountable for unethical practices and their increasing efforts to exert pressure on financiers, including banks and insurers. The chapter also explores the potential for insurance industry self-regulation, highlighting the importance of transparency, accountability, and ethical conduct in the security sector. It recognizes the limitations of existing regulations and the need for more proactive measures to address governance challenges.

Schlüsselwörter (Keywords)

Public-private security cooperation, insurance, governance, risk management, transparency, accountability, ethical conduct, private security companies, civil society pressure, self-regulation, political risks, moral hazard, security PPPs, security sector.

Details

• College: Swiss Federal Institute of Technology Zurich
• Course: International Security Forum 2011
• Author: Dr. phil. hist. Rolf Tanner (Author)
• Publication Year: 2011
• Pages: 7
• Catalog Number: V174998
• ISBN (eBook): 9783640958795
• Language: English
• Tags: Corporate Social Responsibility; Versicherung; Public Private Partnership; Security Governance; Insurance; Private military companies; Private Security Companies; Unternehmensethik; Privatisierung;