Role of risk manager, social responsibility and climate change tackled at SWERMA

Numbers were down at this year’s SWERMA conference as they are at most business events as individuals work extra hard to help drag their companies out of the global recession.

But Charlotte Barnekow, Head of Insurance and Risk Management at Ericsson and Chairwoman of SWERMA said that she was quite happy with the turnout this year given the tough market conditions.

She was was also delighted to welcome Peter den Dekker, Carl Leeman, Florence Bindelle and Pierre Sonigo of FERMA to the event as they started preparations for the next FERMA forum in Stockholm in 2011 and visited the venue that is currently under construction.

Ms. Barnekow told Commercial Risk Europe that about 50 people attended the event this year. The majority were risk managers and the rest were brokers, insurers and other service providers.

hide

Ms. Barnekow pointed out that risk management may be a relatively mature profession in Sweden, but the country is small compared to other European giants like Germany and France and the number of big multinationals based in Sweden is not great.

Hence the limit to the size of SWERMA’s membership and the size of the conference, despite the relative sophistication of the profession in the country.

“Sweden is a small country and there are not so many multinationals so in many cases the role of risk management is included within other roles such as CFO. But, there is a dedicated community of risk managers mainly with the large listed companies and the profession in Sweden is really about 20 years old,” she explained.

Ms. Barnekow said that she was pleased with the level of debate at the conference this year and particularly the in-depth analysis of the role of the risk manager.

This is important to Ms. Barnekow because she believes that a fundamental part of a risk management association’s role has to be to help define the role and the position of risk management within their organisation.

For this reason she enjoyed the workshop led by Ul Jonsson, Managing Director at UHJ Management and Partner at Complete Risk Control, that is reported in detail in the report opposite.

“This workshop discussed the developing role of the risk manager in Sweden which has been changing. In the past risk managers tended to focus on asset protection such as fire and insurance buying to protect those assets. It has developed now into a more enterprise-wide role in many cases. Risk management is part of each process within larger companies such as sales, security, legal and the like. Maybe the risk manager’s true corporate function is to co-ordinate and, to an extent, control risk and take care of the overall function,” said Ms. Barnekow.

Ms. Barnekow also noted the workshop led by Karin Klerfelt, Communication Consultant at Swedish firm Astarcan AB that is also reported in more depth in this overview of the event.

“Communication is a key skill for risk managers especially as it has developed into a wider role as mentioned above. This is because it often involves fire-fighting and co-ordination of action to ensure that problems are dealt with. So, risk managers need to be good communicators and diplomats and above all good listeners,” said Ms. Barnekow.

Another highlight for SWERMA members was a debate led by Karolina Dubowicz, project leader for CSR Communication at Swedish clothing firm H&M on corporate social responsibility (CSR).

Ms. Dubowicz said that CSR presents both risks and opportunities. H&M is a big company in Sweden and does not want to be seen on television for using child labour to manufacture its clothes, for example. The company is very strong in this field and has dealt with such risks in a proactive way for some time, she explained.

Climate change is another hot topic on the world agenda and there is no doubt that risk and insurance managers and the insurance industry has an important role to play.

Madeleine Westin and Carina Lundberg-Markow of insurance group Folksam led this discussion that was very focused on the direct impact on Sweden and must have therefore given delegates a welcome relief from the normal macro presentation about the impending end of the world.

“The discussion on global warming has been rather affected by the fact that we have just experienced the coldest winter for 25 years with record temperatures below zero for months and a lot of snow storms,” said Ms. Barnekow.

“The conclusion is that we are being affected now, but the real impact will be felt by our children in 50 to 100 years time. There are a number of things that we can do to slow down this process. The question is how do we tackle that?” she continued.

Ms. Barnekow said that consumption is a big problem in its own right and also a contributor to the climate change problem. “How do we deal with all this rubbish? How do we avoid that in the first place?” she asked.

Carina Lundberg-Markow of Folksam discussed how insurers can play a role in this battle by the way they accept or decline risks and the way they invest their funds. It is encouraging that many insurers now have quite strict policies about where they can invest their funds based upon CSR and climate change implications.

Ms. Barnekow asked whether this can really provide an insurer with a competitive advantage in the harsh world of the equity analyst and investors.

Ms. Lundberg reportedly replied that it is not currently a competitive advantage to be a good corporate citizen. But, she suggested that the insurance buyer may have a role to play in this as they decide which insurer to place their business with. If the terms are the same why not choose the insurer that is the best corporate citizen?

Each year SWERMA gives an award in the name of Gustav Hamilton, the founder of the association. This year it was given to Ulf Rönndahl, former Head of Group Risk Management for insurance company IF P&C for many years and currently Chief Risk Officer of Telenor, the Swedish telecommunications group.

Mr. Rönndahl joined Telenor in August 2009 and since then has been busy helping the company to build a risk management organisation and implement an efficient and structured ERM-process.

Beyond the annual conference and helping to make a success of the FERMA forum in 2011, the bigger plan for SWERMA is to continue to help foster the development of the profession of risk management in Sweden and in particular help define the role, said Ms. Barnekow.

“The role of the risk manager is rather vague today with the blurring of the lines between insurance manager and pure risk manager. I believe one of the key functions of SWERMA is to help define that role and thus help members identify exactly what their role is. This is a very important function because it is currently impossible to come up with a sole definition of risk management,” she explained.

“The role really varies depending upon what kind of operation you work for and what kind of industry you are dealing with. Given this diversity of the operating environment it is critical to understand how the role works,” added the Ericsson risk manager.

The association can therefore provide a framework, networking opportunities and create various activities to deal with questions that arise. In this way it helps members to educate themselves by talking to each other, said Ms. Barnekow. “You can learn a lot just by networking and it is important to talk to people dealing with big questions like ‘What is risk management?’ ” she said.

SWERMA has created a number of network groups to help dig deeper into topics for the member and one of these is focused on ERM. Last month the association also planned to hold a meeting to discuss the ISO 31000 framework.

SWERMA also has a group to discuss insurance issues that focuses on broker remuneration, special coverage requirements and the like. Solvency II is also a big question for Swedish captives (most of which are based in Sweden) just as it is for most other European risk and insurance management associations. “This group has met a few times to discuss how to educate the supervisor about what a captive really is,” said Ms. Barnekow.

Another matter on the insurance group’s agenda is recent changes to the Swedish Insurance Act and the liability issues attached to this change in the law was also discussed during the conference.

”Sweden is a very consumer-friendly society and this is reflected in our laws. Insurers always have to look at whether a loss is really insured or not despite the consumer-friendly nature of the law which tends to assume that the consumer is always right. This has to be clarified to ensure that if an issue came before a judge, the courtwould consider the intent of the contract. This is key,” said Ms. Barnekow.