TheWalt DisneyCompany RISK MANAGEMENT Western Regional RIMS Conference September 17, 2013 Media Networks Studio Entertainment Consumer Products Disney Interactive Media Group Parks & Resorts Worldwide Theme Park Attendance 2012 Attendance 1. Magic Kingdom WDW, Florida 17,536,000 2. Disneyland Anaheim, California 15,963,000 3. Tokyo Disneyland Tokyo, Japan 14,847,000 4. Tokyo DisneySea Tokyo, Japan 12,656,000 5. Disneyland Paris Marne-La-Vallee, France 11,200,000 6. EPCOT WDW, Florida 11,063,000 7. Disney’s Animal Kingdom WDW, Florida 9,998,000 8. Disney’s Hollywood Studios WDW, Florida 9,912,000 9. Universal Studios Japan Osaka, Japan 9,700,000 10. Island of Adventure Universal Orlando, Florida 7,981,000 11. California Adventure Anaheim, California 7,775,000 Per Themed Entertainment Association (TEA) and Economics Research Associates (ERA) Performance Excellence Total Quality Leadership Management & Training Delegation & Team Empowerment Building Performance Excellence Continuous Customer Improvement Service Productivity Cost & EfficiencyEffective Risk Reduction Management Our Three Key Messages Our reputation is our greatest asset Almost every accidental loss is preventable Every Cast Member is a part of the Risk Management Process Elements of the Disney Show Safety Courtesy Efficiency Show Our Purpose in Risk Management As part of the organization: “to protect the assets of The Walt Disney Company at the lowest possible long-term cost” As a team of professionals: “to provide the highest quality technical and professional services for the protection and experience of our Guests, Cast, Property and Business Partners” Disney Risk Management Planning & Protection & Processes Risk Prevention People: Management“Cast Members” And Business Partners Planning and Process Formed March ‘02 for: Formed January ‘03 for: Property Workers’ Compensation � Earthquake General Liability � Fire Auto Liability � Wind Entertainment � Flood � Production Package Deductible Buy-Downs � E&O Pollution Liability Innovative Processes Business Continuity Planning August 2011-Sony’s UK Warehouse Burns During Riots Warehouse contained Disney Interactive games worth $19 million retail – All destroyed Disney Interactive previously implemented BCP = No Loss For Disney Insurers TheWalt DisneyCompany Planning & Protection & Processes Prevention People: “Cast Members” And Business Partners Property Risk Quality Property Protection Overview Tremendous investment made in protection of Disney properties Risk benchmarks exceed best in the industry Key locations engineered to HPR Standards through 66 year partnership with FM Global. Expected benefits: Protection of Disney brand Stability of insurance coverage & pricing Mutually loyal, long term partnerships with other insurers such as Lloyds, ACE, Zurich, AIG, AXIS, Swiss RE, Chubb and Others Property Protection History What was Walt thinking? New theme park needed to be a safe place for guests Human response alone is inadequate Needed to build safe rides and attractions FM Global partnered with Disney in 1947 Disneyland Completed in 1955 First sprinklered Theme Park Why are sprinklers important? Trivia Question #1 1. What % of fires are controlled by only 1 sprinkler head? A. 0% - they all open like in the movies B. 25% C. 50% D. 75% E. 100% Answer = 50% Trivia Question #2 2. What % of fires are controlled by the operation of 5 or less sprinklers? A. 50% B. 70% C. 90% D. 100% Answer = 90% Rides and Attractions Elaborate themes, moving rides and highly ornate construction = Impossible to sprinkler? Cinderella’s Castle- Exterior Cinderella’s Castle- Interior Sorcerer’s Hat- Exterior Sorcerer’s Hat- Interior Walt’s Apartment within Disneyland FM Global Average Loss $5M 5 4.5 4 3.5 $M 3 2.5 2 1.5 $.76M 1 0.5 0 HPR Non-HPR Safety Lines A common color, size and width of line will be applied at all attractions Station Gates Wild About Safety EVERYTHING BEGINS WITH SAFETY AND… TheWalt DisneyCompany Planning & Protection & Processes Prevention People: “Cast Members” And Business Partners People – Must be Prepared Medical Response Planning Law Enforcement Exercises Evacuation Drills Emergency Operations Center Unique Exposures Fine Arts Animation Artwork Unique Exposures Fine Arts Aviation Owned Aircraft Leased Aircraft for events � Film Premieres � News Operations � Sports Remotes Other Unique Aviation Exposures Just another Day at the Magic Kingdom What a view the Blue Angels have The Space Shuttle flies by the Castle Hot Air Balloons Unique Exposures Fine Arts Aviation Owned Aircraft Leased Aircraft for events � Film Premieres � News Operations � Sports Remotes Other Unique Aviation Exposure Property Property Various Specialty Properties Claims History Sept 11 2004 Storms March 11, Japan Earthquake Storms - At the Intersection How We Felt After A Few Storms March 11 Earthquake Unique Exposures Fine Arts Aviation Owned Aircraft Leased Aircraft for events � Film Premieres � News Operations � Sports Remotes Other Unique Aviation Exposures Property Production Production Insurance Coverage Cast Negative Faulty Stock Extra Expense Misc. Equipment Third Party P.D. Props, Sets, Wardrobe Office Contents, Vehicle Physical Damage, Money and securities, and Animals Props, Sets, Wardrobe Props, Sets, Wardrobe Typical Production Challenge “We have a scene with some pyrotechnics and want to make sure all the insurances are in place for the movie Déjà Vu?” Especially Fire insurance ….. The “small” event – fire insurance???? Upcoming Challenges Upcoming Challenges Disney Springs at Walt Disney World Resort Upcoming Challenges Quality in Action “In this volatile business of ours, we can ill afford to rest on our laurels, even to pause in retrospect. Times and conditions change so rapidly that we must keep our aim constantly focused on the future.” Walt Disney Walt Disney .