Risk management message being received in Italy but more work needed: ANRA

More than half of Italian risk managers say that risk management is now viewed as a fundamental part of strategic planning within their organisations and about two thirds say insurance is viewed as an essential management tool or helpful cashflow tool when losses occur. These are clearly positive signs for the profession in Italy and across Europe. However, almost 30% of Italian risk managers also believe that risk management is still viewed as a tickbox exercise or annoying expense, and close to 25% believe that insurance is regarded as a simple legal duty or, even worse, an annoying expense. These were the findings of a poll carried out by Commercial Risk Europe late last week among risk managers who attended the annual general meeting of ANRA, the Italian risk management association, in Milan. Board members of ANRA and insurers and brokers who attended the afternoon conference said they were pleased to see the relatively high number of participants who reported that risk and insurance management were increasingly regarded as important parts of the business process. But Alessandro De Felice, president of ANRA and chief risk officer of Italian-based global cables group Prysmian, said he was “astonished” by the relatively high numbers of respondents who said risk management is viewed as either a tickbox exercise or annoying expense. ANRA has recently significantly boosted membership numbers, its events are well attended and lively, and it rapidly moved to become the first accredited provider of risk management education though the RIMAP certification programme launched by the Federation of European Risk Management Associations (FERMA) in late 2015 in Venice. Maurizio Castelli, former president of FERMA and ANRA and now head of the association’s fast-growing educational programme, told Commercial Risk Europe that demand for risk management education is in demand in Italy and, encouragingly, especially within mid-market and SME companies. The risk management message is hitting home in Italy and ANRA’s current and former leadership team deserve a pat on the back. But, as Mr De Felice pointed out during a discussion I hosted about the poll findings at the end of the day, clearly more work needs to be done to raise the profile and sell the value of professional and structured risk and insurance management to the wider business community. The poll forms part of Commercial Risk Europe’s annual survey of Europe’s leading risk managers that is this year again sponsored by HDI Global. The Italian risk managers were also asked specific questions about two critical areas of risk and insurance management currently: supply chain and cyber. The supply chain questions clearly confirmed what everyone in the market already knows: this is a business-critical risk that is inadequately risk-managed and transferred. The Italian risk managers were asked: Should a risk manager be involved in the management of supply chain risk? Some 98.4% not surprisingly said yes, while only 1.6% said no. But, the next question – Is your supply chain risk insured? – clearly revealed the problem. Only 41.9% said yes, while 58.1% said no. So, as the participants in the subsequent debate confirmed later in the day, this is a serious risk that all risk managers need to be heavily involved in. But it is difficult to insure, thus strongly suggesting that this risk is not properly identified, measured or managed. This is without doubt a work in progress that all participants in the risk and insurance management process need to tackle with more vigour. Time to get on with it. Interestingly, the responses about cyber insurance matched the findings of a survey carried out by the German risk and insurance management association GVNW, which were revealed at its liability conference in Cologne two weeks before. The German risk managers rated cyber as a critical risk. But not one that they are particularly heavily involved in managing. They said they are inadequately insured. When they do buy cover, they would rather buy it on a standalone basis than as an extension to existing cover. This preference for standalone cover contrasted sharply with the qualitative findings of last year’s Risk Frontiers survey. This basically found that risk managers think the insurance market is trying to create a new line to generate new income when actually all it needs to do is adapt existing property and liability policies with some extra, but not excessive, extra cost to reflect new cyber liabilities. Mr De Felice agrees with this synopsis. But, based on this snap poll, it seems that most Italian risk managers agreed with the German risk managers that, actually, standalone cyber policies are the way ahead. Maybe because cyber business is the way ahead and all policies in future will be cyber policies with fire, marine and motor extensions? Maybe. The ANRA members were then asked: Do you have adequate cyber insurance? A mere 22.6% said yes and a worryingly large 77.4% said no (though one can imagine marketing executives within the cyber departments of brokers and insurers getting very excited about this right now). Then the Italian risk managers were asked: Do you prefer standalone cyber coverage or coverage included within existing lines? A whopping 66.1% said they would prefer standalone, while only 33.9% said they would rather have cyber added to existing coverage in a neat and painless manner. Why such a big shock? Because, as noted above, so many leading European risk managers have been telling us for so long now that the standalone cyber market is a scam designed to generate a new business line for an industry starved of growth potential, not a product designed to meet risk management and transfer the needs of its customer base (perish the thought). So what do you think – standalone or extension, scam or valid line of business, all cyber with a few extensions? Let us know. A full analysis and commentary based on this Italian survey and further interviews will be published in the coming April issue of Commercial Risk Europe. The same snap polls will be carried out in other countries within Europe (including the UK) as the spring and summer progresses. All risk manager readers of Commercial Risk Europe will receive a simple, easy-to-use version of this survey that will back up the face-to-face roundtables. Please take part – it raises big questions for the industry and enables you to have your say.

Risk management message being received in Italy but more work needed: ANRA

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