European risk managers agree time to raise risk education game – locally and globally

Ferma President Jorge Luzzi yesterday looked forward to a formal presentation on the topic that he will make today with Julia Graham, Chief Risk Officer of DLA Piper, and Michel Dennery, Ferma Vice President and Deputy Chief Risk Officer, Audit & Risks Division at French energy giant GDF Suez. Mr Luzzi said the project that will look into the need for a pan-European risk management certification is one of the most important projects for Ferma currently. He added that Ferma is more than aware of similar developments in Latin America driven by ALARYS, in the US by RIMS, in Australia by RMIA and more broadly in Asia. The Institute of Risk Management (IRM) is also working on this area.hide"There is growing interest in this area and, in a way, we need to join forces because this is an important area," said Mr Luzzi during yesterday's press conference that opened Ferma's 2012 seminar yesterday in Versailles. It came as no surprise that this was a hot topic at this year's event. Ferma announced that it would look into the idea of a European certification in June at its general assembly and this week's event provides the first real opportunity to update members on progress. Discussion during the seminar inevitably once again focused on the need to raise the profile and influence of the risk and insurance management community within their companies. The debate was inevitably sparked as the federation announced the findings of this year's Benchmarking Survey entitled 'Keys to Understanding the Diversity of Risk Management in a Riskier World,' that is produced in collaboration with AXA Corporate Solutions and Ernst & Young. There are many positives to be found in this year's survey on the profile of the risk manager that suggest the profession is rising in significance and recognition. This matched the evidence gathered by Commercial Risk Europe's own survey - Risk Frontiers - that was published during the event and will be distributed to all readers with the November hard copy issue of our newspaper. The Ferma survey, for example, found that risk management interaction with the board is increasingly a 'close and regular' relationship. Some 79% of the 809 respondents, for example, said that risk management activity is 'globally interacted' with the board and that the topic of risk management is formally addressed by the board on at least an annual basis. Some 42% of respondents said that risk management is completely embedded in the reporting to the board. The survey also found that the risk management function globally reports at top management level (93%) but also that many still report at CFO level (36%), particularly in Italy, Germany and the UK. But to really leap frog to a truly respected and senior level within all organisations it seems clear to most leading practitioners that a more robust and coherent education systems and, at a minimum, certification is needed. Carl Leeman, Chief Risk Officer of Belgium-based global logistics firm and President of IFRIMA, the International Federation of Risk and Insurance Management Associations, said that the profession currently suffers from an identity crisis and needs to emerge from this 'the sooner the better'. During a panel debate on the expectations of European companies on risk and insurance management Mr Leeman said: "There is a kind of an identity crisis and we need to get out there quicker and better. We all see the need for one type of education and certification. We have to get out there and identify the problems and increase the level that the risk mangers work at so that we can deliver real added value to companies. This is not going to happen by going to the CFO and saying you have got another 5% decrease in premium spend," noted the IFRIMA President. And it seems clear to most thought leaders in the European risk and insurance management community that any identity crisis that is holding the profession back is at least partly attributed to the absence of a coherent and consistent risk education system. The Ferma survey found that some 45% of respondents have 10 or more years experience in the job, 72% of the total are in charge of risk management and/or insurance and 66% operate in six or more countries. But only 42% of the same group has a specific risk management qualification. Edwin Meyer, Risk & Insurance General Manager at ArcelorMittal said: "It doesn't matter if you are an enterprise wider risk manager, chief risk officer, insurance manager, at the end of the day certain actions need to get done. We need education and what Ferma is doing is laudable." Julia Graham, Chief Risk Officer at global law firm DLA Piper hosted this panel debate and ended the discussion by asking whether the role of chief risk officer is fact or fiction, reality or just a pipe dream. She concluded that, at the end of the day, there is no single, uniform risk managers job description because, as the panelists had pointed out, every company is different. But, despite these differences all risk managers need education, she said. "There is no such thing as one role. But one thing we all share is the need to raise the game, to be professional and be informed. This is one of the reasons that Ferma is doing this work on professionalism. We have to raise our game," concluded Ms Graham.

European risk managers agree time to raise risk education game – locally and globally

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