Transparency and teamwork–comment

ENISA has quite rightly concluded that the insurance market for cyber risk is currently not fit for purpose, that this represents a potential threat to the development of e-commerce and business in general in Europe and has identified a list of core actions that could be taken to overcome the barriers.

As the leading insurers, brokers and risk managers keep on telling us, insurance coverage is critical to help underpin business as it takes risks to maintain growth (or, in this current climate, avoid going bust) and this is one of the reasons why the industry has put so much effort into its lobbying of Solvency II.

There is a serious concern within European insurance and risk management circles that if Solvency II is too extreme then basically the sector will not be able to provide as much cover as is needed at the right price and so risk-taking will be limited relative to other regional economies.

This is why ENISA’s cyber risk insurance initiative offers such a great opportunity. The EC is currently working out the regulatory and legislative framework for this risk that will set the parameters within which this risk will develop over time.

hide

Normally such efforts seem to pop up out of the blue and the insurance and risk management community have to work out how to deal with it afterwards, when it is effectively too late to carry meaningful influence.

In this case, however, it would seem that the risk management and insurance community in Europe have a great chance to become involved from the outset and help shape the agenda.

How often have you read in the pages of CRE over the last year or so that it is critical that the industry—insurance buyers, brokers, insurers and reinsurers—
need to work together to tackle difficult emerging risks such as supply chain and cyber and that transparency 
and true teamwork is the answer to seemingly uninsurable risks?

But real action on this at a European level seems incredibly difficult to achieve and meaningful action seems to take place at national level instead, as the EC beavers away at the pan European level almost in a bubble.

This is not a criticism of Ferma in any way, shape or form. The federation has done a great job and continues to do a great job to try and represent the various European national risk management associations at the Brussels level.

But it needs more help from its national constituents with big projects such as this rapidly-developing cyber agenda to help it come up with a coherent pan European response, and hopefully one that has also been developed in cooperation with international risk bodies such as RIMS in the US, RMIA in Australia and New Zealand and IRMSA in South Africa.

Commercial Risk Europe is doing its level best to help develop this industry approach to such key matters. We are currently amidst our annual Risk Frontiers survey of leading European risk managers, sponsored by XL and Willis, and also Risk Distribution, our survey of leading European brokers, sponsored by Lloyd’s.

We really hope that our cyber risk seminar organised in Brussels on September 27 along with Belrim and supported by Chartis will see ENISA and senior representatives of the commission outline their thoughts and plans and give risk managers, insurers and brokers a chance to really get stuck into the topic in a positive way from the outset.

We are also currently working on a more global platform to bring the international risk management community together on such key matters and hopefully help spark a more international risk response. Our coming African report, supported by Zurich, and recent trips to South Africa, Brazil and the Middle East are a core part of this plan that we believe readers will find very useful and worthwhile and will be followed up by reports from Asia and North America soon.

We are very grateful to all those hard working risk managers who make the effort to step away from their daily grind to support such efforts. And we can report that, while many find it difficult to drag themselves away from their desk, they always say afterwards that it was actually really useful to take a step back and discuss such key subjects in an independent environment and develop their thoughts on how to more effectively manage their company’s risks.

In this fast moving and often frantic global economy it seems that it is becoming increasingly important to take the step back, look at the big picture and think big. See you in Brussels!