Risk management controls not hindering commercial activity, say the Swiss

Swiss risk managers do not think their profession needs to reduce controls, which in most cases are vital to ensuring organisations can deliver on their objectives and hit profit targets, but they do feel that many risk professionals need to strike a balance and would benefit from developing a more commercial and creative mindset. Last year experts on a Riskonnect webinar argued that risk managers need to think more commercially and should consider relaxing some controls to create more value for their businesses. But Sabrina Hartusch, Sirm president and global head of insurance at Triumph Holding, is just one of the Swiss risk managers we spoke to that said controls need to stay in place, and doesn’t think too many are holding business back. Any loosening of controls could lead to real problems, she suggested. However, at the same time, it is important for risk managers to develop a more commercial attitude, she continued. “Often we are seen as a back-office function. In our companies we have to be frontrunners and think commercially. Sometimes risk managers tend to be administrators, and it would be good if we can become a bit more commercial in that sense. A bit more creativity could be developed,” she added. Rocco Bozzelli, head of global insurance at MSC Cruises, said the issue is a “double-sided coin”, and stressed that risk and insurance managers should find a balance between the commercial and risk aspects. “This is a challenge, but considering the function is now more strategic, I think we are listened to more so can influence this balancing act. I see examples of some risk managers focusing on the control aspect, but it depends on the company culture. There are some that are more risk taking and some that are more risk adverse,” he said. “I don’t believe the controls are being overdone or that companies aren’t able to do things commercially because of risk management,” said Jurrit Herber, Sirm board member and head of risk at Eviosys. In fact, Herber believes there aren’t enough controls in place at many firms. “In a lot of companies there remains a lack of controls. In my opinion, in the majority of companies. I have not seen, within non-financial institutions, cases where risk management controls have hindered the commercial department,” he said. But Herber said it is equally important that the risk function works with commercial, is up to date on what the commercial side wants and then works out how it can help mitigate risks in the way of achieving these targets. This is, after all, the essence of risk management. “This needs to be done with maximum flexibility and you don’t want to control everything. There is always a redundant risk out there,” said Herber. Pierre-Louis Chabert, director of insurance and risk management at Alcon, believes that, ultimately, risk managers should adopt a more commercial mindset. He argued that they need to align risk management practices with strategic goals, while also advocating for practical and realistic insurance requirements that reflect the operational realities of their organisations. “The primary objective of insurance and risk management is to support and enhance the business. If excessive risk controls negatively impact business efficiency or drive up costs, it may be necessary to reassess and potentially relax some of these controls,” he said. Michael De Boni, head of corporate treasury and insurances at Forbo Management, believes that as the world gets more and more complex, risks and related controls need to be reviewed more frequently. But risk managers’ contributions to the commercial part of the businesses is relevant and should never disconnected, he added. “Common sense is key and still as relevant as it always has been,” said De Boni wisely. For his part, Stefan Günther, head of insurance at Coop Genossenschaft, thinks the boundaries between risk management and commercial operations should be clearly defined, and made the point that it is ultimately up to the c-suite to make decisions over the balance between risk and reward. “As risk managers, we have a clear responsibility to outline and mitigate existing and future risks. Our role is to raise awareness within the organisation but also to accept and not fight commercially necessary decisions. It is the role of the c-level execs to balance the decisions, and ours to provide all relevant information for an informed decision,” he said.

Risk management controls not hindering commercial activity, say the Swiss

But important to use common sense and strike balance between risk and reward

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