Risk managers taking on new skills to deliver multidisciplinary role

Italians taking part in our Risk Frontiers Europe survey strongly believe they should maintain control of buying insurance for their organisation, and noted that their role goes far beyond buying cover at the best price. They agreed that a broad understanding of risk is vital to making the right choices for any insurance programme and is something that procurement, for example, would not have the time to do. However, in Italy, state-owned entities are legally required to give insurance-buying processes to the procurement team to ensure proper segregation of duties, and the group of risk managers said they could understand the need to do that. For privately-owned corporations, they agreed, however, that leaving risk transfer to the risk team – with collaboration from procurement who could help support purchasing negotiations – makes sense. Alessandro De Felice, president of Anra and chief risk officer at Prysmian Group, said risk management is about much more than buying insurance at the best price. It is about knowledge of the whole business, governance rules and compliance obligations, he said. Mr De Felice said risk management has changed in recent years, with a move towards enterprise risk management. “The profession has a more holistic role these days and the risks need to be addressed with a coordinated approach,” he said. “It needs to embrace both risk appetite within the organisation and risk financing. We transfer risk to the insurance market that is in excess of our risk appetite, but to do that you need a broader understanding of the company than simply the cost of that insurance package,” added Anra’s president. He noted that many risk managers have degrees in economics or law, while others have an engineering background. It is a powerful combination of skills, he said, and gives corporations a wide view of the risk environment in which they operate. Added to that, risk managers need a range of softer skills, including good communication, so that they can empathise with a range of people across the business, he continued. Carlo Cosimi, vice-president of Anra and head of insurance and risk financing at Saipem, agreed. “Risk management is the most multidisciplinary role in a company and, as a risk manager, you need those multidisciplinary skills every day,” he said. “You need to be able to address these risks from a variety of perspectives and be able to mitigate them or deliver risk transfer solutions for those issues,” he added. It is not only a matter of dealing with internal lines of communication, said Mr De Felice, who added that the ability to understand wider risks is crucial. He also strongly believes in the power of risk management associations to help risk managers exchange ideas and experiences. Salvatore Lampone, risk manager at Leonardo Company, explained that a new business code in Italy requires boards to manage their risks more transparently, with more reporting. “This is enabling risk managers to rise up the management structure and have their voice heard in board meetings, if not to actually sit on the board. To do this, we have to have the skills to communicate at boardroom level,” said Mr Lampone. On the question of whether risk transfer to insurance markets can be handed to procurement teams, Mr Cosimi said “insurance is not a commodity.” Adding: “It is important to have tailor-made coverages – it is not something to be picked off a shelf.” He shuddered to think of the consequences of allowing the same people who buy five tonnes of steel to buy insurance in the same way. “It is critical to establish relationships with your insurers. They have to properly understand your business and its risks, to be able to provide the right cover at the right price,” said Mr Cosimi. Indeed, he takes his chief financial officer to meet key partners in the London or US insurance market, so there is a broader understanding of the way insurance operates and the services it can offer. The Italian risk managers reported that the insurance market remains soft, with plenty of capacity for their risks. Mr Cosimi said there is still room for manoeuvre and risk managers, particularly those from companies with good claims histories, are able to negotiate the terms and conditions they need. “We are all different and have different insurance needs. That is why it’s not a commodity and that is also why every company needs to negotiate its own package,” he said. Mr De Felice welcomed one change he has seen in the market. “I am seeing more technical underwriting and better-quality underwriting, particularly on large and complex risks,” he said. The group of risk managers agreed insurers are asking more questions, but said with a world of insurance to choose from, there are still plenty of options for insureds to pick and choose.

Risk managers taking on new skills to deliver multidisciplinary role

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