Single E.U. currency, multiple risks?

LONDON - Employers and insurers should start to assess what the risks might be if and when a single currency is implemented in the European Union, a report says.

There are less than 500 working days to go until the expected start Jan. 1, 1999, in Europe of the Economic and Monetary Union, which could give rise to the single currency, known as the "euro," on Jan. 1, 2002.

"Effective risk management means that businesses must identify the wide and diverse changes that need to be made to accommodate the euro," warned the Assn. of British Insurers late last month in its Quarterly Statistics and Research Review. "Many of these changes will have to be made within the three year transition period when the euro and national currencies are in operation simultaneously."

The ABI admits it is difficult to plan ahead for such an event, given there are still uncertainties over whether a move to a single currency will happen in the United Kingdom. However, the ABI has estimated the switchover could cost the British insurance industry as much as [pounds]1 billion ($1.62 billion), and "delays in planning can only increase this cost."

Policyholders …