Post-Covid bounceback under threat

Cyberattacks are by no means the only risks facing French risk managers this year, stressed Oliver Wild, president of Amrae, as part of the Risk Frontiers Europe 2022 survey.

Businesses are also facing a barrage of challenges, from the Ukraine-Russia war to the energy crisis and fast-rising inflation,
he said.

“Risk managers and their organisations are facing so much uncertainty,” said Wild. “There has had to be quite a change in investment strategies. We have to consider how the Ukraine-Russia war plays out; how will China behave? These questions force people to change strategies.

“If you look at the financial results, things seem very good because most firms have bounced back from Covid-19 but now the geopolitical situation is unstable,” he added. 

Concerns

One area of concern beyond Russia and Ukraine is China and Taiwan, said Amrae’s president. 

“Many companies have significant investments in China and that could cause major issues. At the same time, there is still concern around fragility in Europe and the US is not doing that well. Economics and politics have to be much higher on the radar,” he said.

There remain concerns about the Yellow Jackets in France and more strikes. Meanwhile, France has not been immune to the energy price hikes seen across much of Europe, and there is a feeling that there could be massive hikes to come.

Politics

In addition, France has a hung parliament and it is yet to be seen what impact this will have on the economy and future legislation. 

That is something close to Wild’s heart as Amrae members wait to see the final version of the country’s new finance bill. Included in its provisions will be long-awaited captive legislation that should open up the country as a viable captive market.

Another recent Amrae member survey revealed a number of captive projects are underway among French companies. The vast majority of those are waiting on the new legislation before deciding whether to domicile in France.

Wild said the association is also waiting to see how the legislation will handle captive transfers. There is some concern that, while setting up a new captive will be straightforward, transferring a captive from another jurisdiction could have some serious tax implications.

The legislation is not only about large corporates and their captives but also about enabling smaller companies to find an alternative risk transfer solution. “It is important politically that this is not just about helping large corporates, but also about supporting smaller businesses,” stressed Wild.