Risk management continues to  attract more board attention

Risk managers across France are being seen in a new light post-Covid-19, explained Oliver Wild, president of Amrae. He said Amrae members report that risk managers are much better appreciated by boards since the pandemic, after their involvement in crisis management. “Today, the impact of that is that boards recognise the value of risk managers’ role in terms of business continuity and what risk managers can bring to the business. Now it is about managing the supply chain risk. All these elements do really help in creating more respect for the role of risk management,” said Wild. He added that risk managers now have more of a voice in assessing future corporate strategy. Wild admits he has been lucky to have a CEO who has always been a strong believer in the value of risk management but he also believes that most company execs are now discussing risk much more frequently. “There is greater appreciation and I think it has unlocked more investment in protection of the business and in risk management. There is more budget for the outcomes on the risk map – top management have seen the returns of good risk management practices,” he said. Carriers But Wild added that the same appreciation cannot necessarily be said for insurers. “As far as the insurance market is concerned, the issue is still that carriers are not understanding or valuing good risk management practices,” he complained. “We understand that, since 2019, the behaviour of carriers was to balance their books and everyone saw increase in their premiums… and there was no distinction between good and bad risks – everyone saw an increase. I am hoping that will change as we go into 2023 renewals. Insurers’ results have improved but now the excuse is inflation. But there is always a good excuse to put rates up,” added Amrae’s president. He warned that if the pattern does not change, “you will see companies gaining confidence and opting out of the traditional insurance market”. “The insurance market is not dead but it is being pushed away by some and it is hard to come back into the market once alternatives have been set up and as good risk management pays off. Insurance will have to be really cheap to lure them back,” Wild said. The profession Meanwhile, an Amrae survey earlier this year shed light on the state of the profession in France. It revealed that the average French risk manager is 47 years old, male, has worked in the job for 12 years and earns £74,000 per annum. The French risk management association’s poll, which is carried out every two years, also found that leading risk managers can earn more than £250,000, but these tend to be older and more likely male. The proportion of women in the French risk management profession is on the rise and has reached 45%, but less females have broken through to the top positions and they continue to earn less than their male peers. The study’s findings also suggest that French risk managers are getting older, with 63% of all respondents more than 46 years old this time around, compared with 43% four years ago. Similarly, while 18% of those surveyed were younger than 35 back in 2017, the ratio is now only 10%. The gender gap is narrowing, with women accounting for 45% of all respondents, which is 2% higher than in 2019. But females only represent 41% of “top” risk managers in France, the survey found. And female risk managers still earn less than their male colleagues, with the gap widening as they move up the career ladder. Among junior risk managers, the salary gap is an average of 15%, while among the most senior professionals it is higher than 20%. The survey results show that French risk managers can be broadly divided into 35% that work as head of enterprise risk management, and 55% as head of insurance or risk prevention. Three out of every four risk managers that took part in the survey work in Paris or the surrounding region, and more than two thirds are employed by large organisations. This percentage is slightly lower than in the previous Amrae survey but illustrates the challenge in spreading the risk gospel across France and among smaller companies. A change that has yet to be quantified is the role of risk managers in ESG and sustainability. Wild said more risk managers are discussing the issues internally but do not necessarily have a direct role. “There is definitely an increase in involvement for risk managers and we are hearing about a lot of work around stakeholder dialogue and consultation,” he said.

Risk management continues to  attract more board attention

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Want to read this article?

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Out of the frying pan?

Captive revolution made possible in France as insurers retreat from risk

ESG enters the risk and insurance management world

European risk managers take centre stage as crises deepen

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