Ferma is stepping up efforts to help members boost corporate resilience after its Covid-19 survey shows that progress has been made but more work is needed to make resilience a truly strategic issue and improve wider risk culture.
As they opened the Ferma Talks event today, the federation’s president and vice-president explained that the organisation is pushing the EC to deliver on several issues, including public-private partnership (PPP) for systemic risks, to help improve resilience. They added that Ferma is also trying to ensure European insurance buyers are better represented in discussions with insurers during an increasingly difficult market, and working more collaboratively with associations representing other business functions across the region.
Ferma’s vice-president Charlotte Hedemark kicked off the event by explaining that the federation’s recent Covid-19 survey found the pandemic has accelerated the push for corporate resilience and raised the profile of risk management.
Most participants said executive teams and the risk function are chiefly responsible for resilience and related coordination within their companies. Hedemark said this finding suggests the risk function is taking a greater responsibility in managing risks more holistically, especially in coordination with other functions.
But while the survey shows the majority of respondents feel that their organisations are well equipped to manage resilience, it suggests more work is needed to make this a truly strategic priority. Respondents flagged room to improve risk culture, embed resilience further into strategic thinking and boost capabilities to predict events, explained Hedemark.
“So we must not be complacent. There is still a lot to be done. We continue to face other potential risks, for example climate change or cyber. Therefore we really need to embed the risk culture in organisations to be prepared for future disruptions whatever the cause,” she said.
Ferma president Dirk Wegener told the audience that the federation is working hard to help members achieve, and contribute to, corporate resilience.
He told CRE late last week that the association aims to use its Ferma Talks event on 11-12 October to put PPP proposals for catastrophe risks “back on the agenda” at European level.
With a number of senior EC officials and insurance industry leaders at the event, Ferma hopes to reignite the discussion.
Wegener told Ferma Talks this morning: “We need more anticipation and preparation for the next crisis, be it a nat cat, cyber or next health emergency. The emphasis should be on prevention rather than a post crisis response. So the legislation should incentivise organisations that embed risk management in their business modes and governance structure. So the PPP and catastrophe resilience framework as suggested by Ferma not only reduces the impact of an event but reduces the economic damage because of the embedded risk management.
“We would also like to see the EC consider risk management as an important aspect of new proposals for issues like sustainability and digitalisation. We aim to support this by building on our position as the voice of risk and insurance managers in Europe. So we are delighted to have the participation of members of the EC and parliament at our event here,” he added.
Ferma has also decided to try and “strengthen the voice” of European corporate insurance buyers by holding talks with insurers as the hard market bites, said Wegener.
“We see now at a time of increasing exposures, capacity is reduced and premiums increasing when buyers have reduced budget as they recover from the pandemic. So as the insurance market goes beyond national boundaries, we see a role for Ferma as a European association to have dialogue with insurers to talk about these issues,” he said.
He went on to explain that Ferma’s Covid-19 survey and report also showed that collaboration is key across organisations to deliver resilience. Ferma is therefore supporting this process by working with European auditors’ association ECIIA and the region’s directors’ association ECODA on a joint project on sustainability risk oversight to improve interaction between the three functions, explained Wegener.