European risk managers are taking a more strategic role in their companies with increasing access to top management levels and the board. Against this background, they have a wider vision of the risks that could affect the ability of business to achieve its objectives.
These are the key conclusions of the 8th European Risk and Insurance Survey conducted by the Federation of European Risk Management Associations (FERMA) and reported in the FERMA European Risk and Insurance Report.
More than half of the 634 respondents to the survey report that they are:
- Becoming involved in implementing risk culture across the organization (68 percent);
- Developing risk management as a part of business strategy (62 percent);
- Developing business continuity and other crisis response (59 percent) programmes;
- Reporting to the board or top management level (66 percent).
The survey shows rising concern among risk managers about economic conditions and business continuity disruption since the previous FERMA survey in 2014. Together with political and country instability, these are regarded as the three top risks to businesses. Digital risks - cyber-attack/data privacy and IT systems and data centres - also increased in importance in 2016.
The President of FERMA Jo Willaert commented: "From this survey, we see that risk managers are moving into a position where they are helping embed risk management into the business model and culture of their organisations. They are taking an enterprise wide vision of risks, including the wider business environment, and the majority report to a chief officer or the board."
Respondents also indicated they want additional expertise and techniques, such as scenario analysis and post-event lessons learned, to enhance insight into the nature of the complex risks facing their companies. As a result, they are looking for their advisers, brokers and insurers to go beyond transactions and provide support in such activities. For example, risk control and transfer remain a day-to-day responsibility for the great majority of risk managers (86 becoming), but loss prevention has become the top priority.
Digital and cyber risks are, not surprisingly, a rising concern and risk managers are looking for a greater partnership with insurers on loss prevention and incident management. The purchase of standalone cyber risk coverage has grown since 2014, but two-thirds of companies still do not buy such protection.
"There is work to be done here in strengthening our resilience to these constantly evolving risks. FERMA has always emphasised that they are enterprise risks, and the survey shows that we need closer relationships between the risk management and IT functions. We are also looking for a partnership with our advisers, brokers and insurers to strengthen our resilience and management of incidents," said Jo Willaert.