An MEP told risk managers he fears the EC remains “cool” on public-private partnerships (PPPs) to protect business and society from future systemic risks, but believes the European Parliament could influence discussions and change the course of action.
Alfred Sant, member of the Progressive Alliance of Socialists and Democrats group at the European Parliament, told Ferma Talks that Europe-wide solutions to future systemic risk and crises will be of paramount importance. A European-wide backstop clearly makes sense, he added.
“Shared resilience solutions are needed at EU level. It is in everyone’s interest to have a resilient society; and pooling of resources at EU level is quite clearly the only way measures undertaken can be effective,” he said.
“However, one is left with the sense, unfortunately, that the EC remains cool on such ideas. Either it believes it has too much on its plate, or it prefers to focus on the programme set out before the pandemic started,” added Sant.
“There are also other key obstacles. Not all member states have reinsurance or pooling arrangements in place to cover catastrophic risks, and existing arrangements don’t cover pandemic risk. This makes it difficult to build any new structure if there is no existing model available at national level. Another issue is whether there is enough political will to push public funding towards this objective. Frankly, as of now, I doubt it,” the MEP continued.
But Sant said that even without funding PPPs, the EU could provide a framework and incentivise insurers and national governments to consolidate risk prevention and risk-sharing measures through European-wide policy.
“However, again, as of now, I don’t not sense there is much appetite for such an approach. I hope I am wrong,” he told delegates.
Ferma has used its two-day event to try and reignite the push for PPPs to cover systemic risks such as pandemics, cyber and natural catastrophes at both national and EU level. The federation will therefore be disappointed to hear Sant’s comments, although would have already known where the battle lines are likely to be drawn.
And it seems Ferma has the backing of Sant and his party, the second largest in the European Parliament.
The better news is that Sant believes the parliament “could serve as a trampoline to give more salience to the resilience issue” and ultimately get the EC to change course.
“Raising the consciousness among MEPs about what needs to be done would be a step towards changing the order of priorities. This pressure could see the European Commission come round to the idea of working on an initiative in this area as soon as possible,” Sant believes.
It also seems Ferma can rely on the insurance supervisory community to continue to back the renewed campaign for PPPs to build resilience to future systemic risks, based on a presentation by Fausto Parente, executive director of the European Insurance and Occupational Pensions Authority, at this week’s Ferma Talks event.
Meanwhile, Oliver Wild, president of French risk management association Amrae, joined the chorus of those urging the EC to act in this area. He said there is a big opportunity for the EU to step up to the plate and help provide a solution to systemic risk.
“I don’t think the EU has been able to show a multinational approach on many aspects, so why not use the Covid-19 crisis?… There is a point where you can use this to work on building a model together and then sell it to the countries so everyone buys into the sharing of the risks. Whether they can do it or not is a big question. But I am an optimist – you have to be when you are risk manager. So, I think it is a great opportunity for Europe,” said Wild, who is also insurance and internal control coordination officer for Veolia.