Geopolitics ranks high among challenges facing Amrae members: Wild

Amrae president Oliver Wild speaks to Commercial Risk Europe about some of the pressing issues facing French risk and insurance managers as they gather for their annual conference. France’s risk management community is meeting in Deauville this week amid a more volatile geopolitical environment. This is illustrated by the programme of the 32nd Rencontres de l’Amrae, which included high-level panel discussions on topics such as the new Donald Trump administration, the looming global trade war, sanction regimes and the impact of current conflicts on supply chains. President of Amrae Oliver Wild said that the focus on geopolitics reflects an acknowledgement that these risks have come further to the fore over the past 12 months. “In the Rencontres last year, we discussed how half of the world population was going to be voting, so we could imagine that there were going to be shifts. People were unhappy,” he told CRE. This new reality has seen the rise of national, populist politicians and parties in countries like the US, Germany and Austria. Governments in the UK, Japan and Canada have been shaken by popular discontentment, and political turmoil has become a fact of daily life in places such as South Korea. In France itself, a hung Parliament has fuelled uncertainties about the economy, with populist parties from the right and the left alike gaining strength and disrupting the political status quo. Wild pointed out that companies must be aware of the risks that geopolitical volatility can bring to their businesses. “It will all have significant implications for businesses around the world, on supply chains and so on,” he said. “Climate policy could also be put into jeopardy if large, influential nations take a step back from climate efforts. So geopolitical political risk is definitely a big risk.” Climate change, which has seen an increase in nat cat losses over recent years, is another megatrend that was discussed at length during three days of debates and workshops in Deauville. It is not surprising then that topics such as nat cat risk financing and the scarcity of certain natural resources were discussed during the Amrae conference. But participants will not lose sight of other threats facing French companies. “There are the sort of run-off risks such as business continuity, and cyber is still front of mind. And then, probably to a lesser extent, the increasing level of regulation and the effort needed to comply with the likes of the EU’s Corporate Sustainability Reporting Directive (CSRD),” said Wild. “A lot of work, energy and resource is needed around that, and unfortunately it does not incentivise much action. The effort is geared towards reporting rather than actually acting, changing and adapting the business.” There is concern that the rigour of European directives such as the CSRD and its cousin the Corporate Sustainability Due Diligence Directive (CSDDD) will put European companies at a disadvantage compared with rivals from less-regulated markets such as the US. This would not be ideal when trade wars could be on the way. Amrae is in line with the CSRD’s goals but wants its most demanding requirements reviewed. Wild also noted that there is discrepancy in the CSRD’s implementation within the European market. “Not all the countries have transposed CSRD in the same manner. In France it has been over transposed, but Germany has not transposed it yet,” he said. “Countries are moving at different speeds.” Regulation and political risks are even more pressing in France, where turmoil has caused a degree of paralysis in the government. “The impact of the current political scenario depends on the sector and the size of each company,” Wild said. “In the agricultural space, for instance, companies were expecting a lot out of the budget, which remains unvoted. They are left hanging, basically, and have no certainty about the future, in times that are already very hard on them.” “It is very hard for small business, especially. Larger businesses have built sufficient resilience so that they can probably absorb the stress. But many small companies are shutting down right now. I would not say there is economic uncertainty, but there is economic stress today,” he added. All of these risk are creating a challenging business environment that will keep French risk managers busy for a long time. It also creates a situation where risk managers can display their skills as “sculptors of opportunities”, the theme of this year’s Rencontres. “We can transform risks to opportunities, to competitive advantages,” Wild concluded on a positive note and a call to arms for Amrae members.

Geopolitics ranks high among challenges facing Amrae members: Wild

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