Risk profession gaining recognition but war for talent intensifying in Spain

Leading Spanish risk managers believe that their function was boosted by the Covid-19 pandemic and that risk and insurance management was further strengthened during the ongoing hard insurance market. Participants in the Spanish leg of our Risk Frontiers Europe survey also believe that the new prominence of risk managers may help to attract much-needed talent to the field. “The global environment, with the pandemic, wars, energy crisis, what is happening to the banks – it has all impacted the perception of risk with the top management teams. That is where we, as risk managers, become protagonists,” said Daniel San Millán, president of Spanish risk management association Igrea and risk manager at construction firm Ferrovial. “When we started to implement the function in our group, fifteen years ago, few companies had a professional risk management department. Today, all companies know the function, and many have implemented it,” agreed Lourdes Freiria, general director of risk and insurance at construction group Grupo San José. The turbulence of the past three years has certainly helped increase risk awareness among boards. The perception that risks have a cost and managing risks can generate opportunities has also been nurtured by the hard insurance market, which has made the issue more visible on balance sheets. “When there is no longer an abundance of capacity in the market, risk managers gain more relevance not only in ensuring that insurance purchases are more efficient, but also in reporting what is happening within our companies,” said David González, director of risk and insurance at Sacyr, the construction and concessions group. “The way insurance is managed has become critical, not least because of the cash flow. Companies have to spend more money and, as result, when we have claims, it is very important to be paid as quickly as possible. So, there is a sharper focus now, and more attention is paid to what we do,” he added. And then there is the matter of explaining why companies are paying more for insurance programmes, despite investments made in risk prevention over the years. “Risk managers must be very didactic in our companies. In our case, although we own a large and well-capitalised captive, and work with significant retention levels, premium rates continue to go up, even if our loss history is positive,” said Ramón de la Vega, corporate risk financing director at Telefónica. “The past few years have demanded from risk managers an extra effort to find risk financing alternatives because the coverages have been reduced or limited, capacity has also been reduced and sometimes disappeared, and premiums have been raised,” he added. Another challenge that risk managers have to deal with is the difficulty of finding talent to work in their departments. Not many young people are drawn to the profession, and those who do well are soon courted by the broader insurance market. “The world of large corporate risks is fascinating. But there is a lack of professionals. A brutal war for talent has been raging that involves large brokers and underwriters,” San Millán said. “There is also a tremendous wage bubble and it causes much harm. Risk management departments are cost centres, we do not generate income. So when we want to hire a talented young professional from a broker, we have to pay a lot of money, and our budgets often do not get there,” he added. “It affects us in another manner too,” De la Vega said. “We sometimes go to insurance companies where we used to work with a senior underwriter, with plenty of experience, but whom another company has nabbed. And then we deal with someone new who sometimes was not even the deputy, or who hasn’t the experience and knowledge of the previous underwriter and does not know the specific risks of our companies.” In González’s view, the risk industry must do a better job of convincing young and ambitious graduates to embrace the profession. “Maybe insurance does not look sexy at first, but some products and functions are as complex as in the purely financial world,” he said. “Corporate insurance is a sector that is doing well for a long time, and there has always been a dearth of resources to work with large clients. If one is young, therefore, this is a sector that should look as attractive as other financial careers, as it can be as sophisticated as investment banking, people are paid well and careers are stable. But maybe the sector does not know how to sell itself very well.” “It is unusual for young people to be attracted to risk management unless they have a relative in the market, or they have had some experience in the area,” De la Vega remarked. “What is undeniable is that once you hire someone and he or she is on board, they discover a world that is fascinating and completely unknown. That is what happened to me.”

Risk profession gaining recognition but war for talent intensifying in Spain

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