cover and reduce costs.

Insurance costs this year have been budgeted at about $6.4 million, with $4.6 million alone in premium for an all risk policy for Government's $1 billion property portfolio and hurricane cover.

Authorities have been told they can better manage risk by taking a more comprehensive approach. And now a risk manager will be hired to spend a year carrying out recommendations contained in a consultant report completed by Johnson & Higgins (J&H) Global Risk Management in London.

The J&H unit and the Commercial Union Plc (CU) company, Commercial Union Risk Managers, which now provides risk management services to some parts of Government, may also be considered for the job.

The report which has come out of the risk management review has suggested new directions in general risk management, strategic risk consulting, insurance placements, claims management, loss prevention, training/educational services, and, risk management information systems.

The review has indicated that while in some areas government was quite adequately covered, insurance was tackled by each individual ministry, instead of in a comprehensive manner.

Government is now inviting tenders from established providers of risk management services and is prepared to sign an initial contract for 12 months.

Finance Minister Grant Gibbons said one issue raised in the report centred around whether or not Government was retaining enough risk.

Dr. Gibbons said: "The consultants felt that based on their comprehensive study of all of the Government insurance policies out there -- and there are a lot -- we could actually save money if we retained a higher level of risk, without really dramatically increasing our loss potential.

"The report found little benefit to Government setting up a captive, which was one of the other considerations.

"Also we have a lot of smaller policies, and it was felt that we might be able to affect savings by consolidating some of them across government. That's why a risk manager would be useful to look across the entire portfolio of risk.

"Government should look at total risk management, as opposed to a number of isolated policies. The resulting savings could pay for a risk manager for a period of time to implement a number of the suggestions.'' Other matters raised included a suggestion that a fund should be set up to make allowances for increased risk retention. It was felt that there were perhaps other areas where government is not insured to the degree that it should be.

Key areas here are professional liability and public officers liability, where increased coverage will probably be needed.

But Government could also consider other types of insurance it has previously avoided, including cover related to business interruption.

Dr. Gibbons pointed out: "It is worth looking at insuring against loss of revenue. It was Hurricane Felix, I believe, which impacted Government revenues. There were losses on departure taxes and any number of other sources of tourist-related incomes because visitors were not here.

"The consultant report touched on a lot of areas across the spectrum of risk management. We now want an individual, possibly associated with some insurance consulting operation of some sort, who would be brought into government.'' More attention to Government risk comes after Government's property portfolio swelled beyond $1 billion in value with the addition of the Base lands and new responsibilities for the Airport. Property cover has long been insured by Argus Insurance-owned Centurion Insurance Services.

Where Government's insurance payments go, in thousands of dollars: Property and hurricane $ 4,600 Professional & public liability cover $800 Marine cover $500 Airport liability $188 Motor Insurance $200 Personal accident $70 Grant Gibbons