Risk management a key indicator of business success in complex times, says AMRAE president

The quality of risk management has become as relevant as financial results when measuring how well a company is adapting to the new business environment, according to the president of French risk management association AMRAE. Meeting the press in Paris, Brigitte Bouquot also stressed the strategic role that risk managers have been called upon to play in their organisations, and urged the insurance market to further present innovative solutions to help companies navigate through a world in transition. “Risk has become an inter-strategic subject, vital for companies,” she said. “We have come to recognise that risk management is a dashboard to measure the progress a company makes in this new mission that is as important as its financial results.” Ms Bouquot made the statements while presenting the programme of the 27th Rencontres de l’AMRAE, France’s annual risk management conference that will take place on 6-8 February in the northern sea resort of Deauville. The association expects more than 2,700 people, including 620 risk managers, to participate in the event. The conference theme is ‘Risk at the Heart of Transformation’. It aims to reflect on the way both companies and the risk management function are evolving in a tumultuous world. Ms Bouquot said French companies have faced a number of new regulatory requirements in their home market during the past couple of years, which have created significant challenges for risk managers. If the domestic challenges are not daunting enough, risk managers can look abroad to find yet more thorny topics to occupy their time. “The world lives a unique moment,” Ms Bouquot said. “There are big forces, big issues that create not only risks, but opportunities too.” One example is the transition to more balanced energy consumption and improving environment conditions. This is a task for which there can be no plan B, said Ms Bouquot. Another example is digital transformation, with companies being called upon to take a stand on issues such as the convergence between biologic and digital technologies. “Nowadays, the question of how to master this technology is debated collectively, and not by a few decision makers,” AMRAE’s president pointed out. On the societal side, Ms Bouquot highlighted the crisis of confidence in many democratic countries. Brexit was an early sign of this, but it has taken shape in other countries too, including France with the Yellow Jackets movement. Ms Bouquot said this phenomenon reflects a lack of trust in the system of governance that built globalisation, but does not deliver an alternative to replace it. “Companies cannot be indifferent to these events,” Ms Bouquot said. “Ever since companies became global, they have had to take a stand about those challenges.” It is in the midst of these transformations that the risk management function has gained significance and become more involved with the strategic side of organisations. As part of an expanded role, risk managers need to fuel internal debate on their company’s role to redefine missions and review strategies, suggested Ms Bouquot. “Companies no longer ask what or how we produce, but why we do what we do,” she said. She added that companies must build their strategies with the goal of having a positive impact on society. This is a task that must be achieved through careful and detailed analysis of the risks involved, AMRAE’s president continued. She said the evolution of the French risk and insurance management association reflects the transformation of the role carried out by its members. AMRAE started with a focus on insurance, with underwriters pushing messages about risk prevention and mitigation. But this original mission was expanded with the emergence of enterprise risk management, which marked the maturity of the function. Leading AMRAE members have moved on from only dealing with insurance, to taking chief risk officer-type roles and a holistic view of risk. They have also been called upon to help boost internal control systems, quality standards and processes, while not losing sight of their old risk transfer tasks. Perhaps because their job has become much more complex, risk managers expect insurers and brokers to provide ever-more creative solutions to insurable risks. “We need the insurance industry to innovate in order to bring about solid answers to more frequent natural catastrophes, and also to technological issues, starting with cyber risks,” Ms Bouquot said.

Risk management a key indicator of business success in complex times, says AMRAE president

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