FERMA publishes survey results offering a snapshot of European risk management practices and issues
- Published: Wednesday, 01 July 2020 08:28
FERMA, The Federation of European Risk Management Associations, has released the results of the 2020 European Risk Manager Report. This is the 10th edition of the survey report which represents the widest available information from professional risk managers across Europe.
The President of FERMA Dirk Wegener said: “This survey took place before the implications of COVID-19 were clear, but we can see that the risk manager is strengthening his or her contribution to the recovery and sustainability of the organizations.”
Highlights from the 2020 European Risk Manager Report include:
Digital risks continue to be the most significant threats to business in the short (12 months) and medium-term (3 years). Cyber threats are the number one risk in both time frames, and data theft and fraud are growing in importance and stand at number four in the short term.
Uncertain economic growth appears as the number two threat short term (12 months) and number three medium term (3 years).
Risks related to sustainability are two of the top three risks in the long term (10 years) with climate-change and environment damage the number one risk and extreme weather events number three.
Dirk Wegener said: “The COVID-19 crisis heightens the importance of the top concerns of risk managers as shown in the report: digital risks, economic uncertainty and sustainability. Today, the priority given to these risks might be different, depending on the business sector, but their overall importance would not change.”
A hardening insurance market is an issue for risk managers. The report shows:
- 90 percent are concerned about limitations and exclusions for emerging/specific risks.
- 88 percent are concerned about changes in market conditions.
- 68 percent are concerned about concentration in the insurance market.
One consequence is renewed interest in captives with 43 percent of risk managers considering this option compared to 15 percent in 2018. 27 percent of risk managers say they will use an existing captive for hard to place risks compared to 1 percent in the 2018 survey. 16 percent of risk managers plan to create a new (re)insurance captive compared to 14 percent in 2018.
The risk management profession
The strategic role continues to grow:
- 60 percent of risk managers assess risks related to the different strategies considered by their organization during its strategy definition (2018 – 47 percent) and 59 percent assess risks related to the non-alignment of the organization’s strategy with its mission, vision and core values and core values (2018 – 41 percent).
- 67 percent of the risk managers use innovative technologies in their activities: data analysis, data visualisation, process automation and/or artificial intelligence.
- More than half the risk managers work closely with IT and information security on cyber risks or have it within their team. More than one-third of risk managers are directly involved in the management of risks related to the adoption of new technologies by their organization.
- 40 percent of survey respondents say they are already playing or are planning to play a specific role regarding environmental, social and governance-related (ESG) risks.
The data in this report was collected from an anonymous web-based survey distributed through FERMA’s 22 member associations and the PwC European network between January and mid-March 2020. Responses were received from 764 respondents in 34 countries.