Julia Graham's presentation to FUEDI general assembly 2014
1. We live and work in a riskier world
New challenges for risk managers
How adjusters can help
FUEDI General Assembly 2014
2. Purpose
Co-ordinate, promote and
support the development
and use of risk
management, insurance
and risk financing in Europe
Be a significant stakeholder
in the decision making
process at the European
level on risk management,
insurance and risk financing
Focus for 2014 and 2015:
• Profession
• Innovation
• Diversity
We go where others cannot
easily go
Leading risk management
and insurance across
Europe
4. Where we are22 member associations in 20 countries
4336 individual
members who are
responsible for risk
management and / or
insurance in their
organisations
6. Who am I?
So that's 2 coups, one tsunami, one major flood, one major red shirt
demonstration, 2 major yellow shirt demonstrations - all in the space of 8 years
7. Risk management
Why do you have brakes in a car? So you can drive faster safely. Why do you have good risk
management? So you can pursue your business goals more energetically - FT May 2008.
But the driver needs to know where the brakes are and how to use them - JG May 2014
8. It's risk management Jim but not as we've known it
A strategic business
discipline that supports
the achievement of the
organisation's
objectives by
addressing the full
spectrum of its risks
and managing the
combined impact of
those risks as an
interrelated risk
portfolio
10. Who Is Primarily Responsible for ERM?
Source: 2013 RIMS Enterprise Risk Management (ERM) Survey. All rights reserved.
Source: 2013 RIMS Enterprise Risk Management (ERM) Survey. All rights reserved.
11. Cyber attacks
Fiscal crisis
Unemployment &
under-employment
Income disparity
Extreme weather
events
Water crises
Massive data fraud
/ theft incident
Climate change
Failure of financial
mechanism /
institution
Profound political /
social instability
12. Source: World Economic Forum, Global Risks 2014
And they are prioritised…
Top-rated risks – perceptions survey
Political and
social
instability
Unemployment and
underemployment
Impactiftheriskweretooccur
Likelihood to occur over the next ten years
Economic
Environmental
Geopolitical
Societal
Technologica
l
Critical information
infrastructure
breakdown
Natural catastrophes
Mismanaged
urbanization
Income
disparity
Data
fraud/theft
Biodiversity loss /
ecosystem
collapse
Water crises
Climate change
Cyber
attacks
Fiscal crises
Interstate conflict
Failure of financial
mechanism or institution
Extreme weather events
14. Risk management will become risk leadership
Position
risk management will continue to assume a higher priority
strong board involvement advocated to facilitate strategic and enterprise-wide risk
more energy devoted to defining risk appetite, tracking, measuring and analysing risk
Challenges
risk ownership and communication at all levels
links between risk management and strategic planning and management
communication between the board and risk management
risk based incentives
risk management talent pool with the right talent
risk forecasting
There is evidence suggesting well risk managed businesses are more profitable
15. Principles of the resilient organisation
• Have an exceptional radar
• Value and build strong relationships internally and externally
• Leaders that are respected and respectful
• Have the ability to respond rapidly
• Diversified resources
• Top Management
believe they should spend more time on strategy, talent and risk
• Risk Managers
must develop business leadership skills
become a business discipline
add significant value or stay as fragmented technical people called upon only when
needed
Source: Roads to Resilience AIRMIC 2014
16. Challenges to achieving resilience
The Risk Manager
• Overcoming barriers
don't over analyse
• The role is changing
no hiding behind rules and regulations
valued senior advisor
get out and engage
• More about culture, behaviour, mind-set and insights
• Enablers and behaviours
People and culture
Business structure
Strategy, tactics and operations
Leadership and governance
17. Managing cyber risk is not a project
Source: Global Information Security Survey 2012' by Ernst & Young (2013 report now also available)
18. How to improve cyber security
Source: 10 Steps to Cyber Security – UK Executive Companion' produced jointly by GCHQ, BIS and CPNI
19. Challenges
• Increasingly complex and rapidly changing world
the pace of complexity and change will increase
• Demands for innovative solutions not products
those who do not innovate are at risk
• Focus on solution design which is cover driven
not the value added and what is being purchased
• Knowledge drain
where are the risk leaders?
• Procurement involvement
focus on price at the expense of solution and quality
20. What every risk manager wants
Rapid, hassle-free payment of claims
A more business like approach to claims handling
More pre-claims discussions to clarify how the claims will be paid
The can't pay, won't pay attitude to disappear
Focus on creating a smooth process
Insurers who listen
Claims as a business not a legal issue – litigation a last resort
Risk managers must take control
Opportunities for risk managers to demonstrate they do a great job
The basics have to be right
Roles and responsibilities at times are unclear
This is what we buy in the first place
Source: Commercial Risk Europe Risk Frontiers Seminar Report 2013
21. Joined up thinking and action
It's too late after the event
Information sharing should improve
Service levels should be defined and agreed
Processes defined and mapped
Processes communicated and embedded
Training of those involved
Communicate, communicate, communicate
Players should be part of the renewal process
Defence
Response
There are more than two in this marriage