Wegener says pandemic offers unique chance to usher in new era of risk management

Ferma president Dirk Wegener believes risk management stands on the threshold of a new era as Covid-19 offers an opportunity, perhaps like never before, to embed enterprise risk management. Speaking at Ferma’s online seminar that attracted more than 500 risk managers, Mr Wegener also told delegates that the federation is working closely with the European Commission on its response to the pandemic and has launched a member survey to get feedback from the risk community. In his opening speech on the seminar’s impressive 3D platform, Mr Wegener said risk managers have had the “unfortunate opportunity” during the last eight months to show just how valuable risk management is for the resilience of companies and the economy. “The Covid-19 crisis has again demonstrated that as risk managers, we should be agile and flexible to make sure that our organisations have the capability to respond quickly and effectively to numerous and completely new challenges. We have the opportunity, perhaps as never before, to embed enterprise risk management in the way that organisations think and operate,” he said. “Today, I believe we can be on the threshold of a new era for risk management. There is the possibility of truly embedding risk management in the business model and culture of European organisations,” he added. Ferma’s president said the risk management community has learnt many lessons during the crisis that will help strengthen resilience through enterprise risk management. That is essential because the Covid-19 crisis is far from over, continued Mr Wegener. He noted that many insurance buyers are facing the double whammy of financial pressure as organisations struggle in the pandemic and a hardening insurance market. In response, risk managers may simply buy less insurance to meet their budgets, Mr Wegener said. “This means the risk manager must clearly identify and communicate the additional exposures that companies face. They may result from reduced insurance cover or new dimensions of risk. We need to express what these changes mean for the organisation in financial language and in terms of what they could mean for business objectives,” he added. Meanwhile, Ferma is involved with the EC about the importance of creating a pan-European insurance-based public-private partnership to cover non-damage business interruption losses from systemic risks, including pandemics. “We have emphasised that any such scheme must recognise solid risk management in the insured enterprises and the involvement of the insurance industry. In this regard, Ferma has and will continue to contribute to the work of the European insurance agency Eiopa on a public-private resilience framework that meets our requirements,” Mr Wegener told his members. But Ferma is also involved with the EC more broadly in its response to Covid-19 and has stressed that professional risk managers are essential in the effort to strengthen the resilience of European business. Mr Wegener went on to say that the EC will embark on several workstreams related to the crisis in the coming weeks and has invited Ferma to give input as soon as it can. The federation has therefore launched a member survey that seeks input from risk managers on their experience of the Covid-19 pandemic. “I encourage you to complete this survey and help us drive the EU-level discussions on shared resilience solutions,” said Mr Wegener. The theme of the seminar is ‘Corporate risk and finance: Financing the growing universe of risk’. It will focus on how members can manage the hard insurance market and alternative risk financing options. It will also look at how companies can indemnify, define and measure risks, with climate change, supply chains and cyber particularly under the spotlight.

Wegener says pandemic offers unique chance to usher in new era of risk management

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