Survey - “There is no doubt the role of the risk manager has become more difficult” - survey of European risk managers

A new survey throws light on the position and preferences of European risk managers. Jason Harris of XL Group discusses the findings.

Working long hours…Taking long lunches…Making fast cars … we all know the stereotypes that mark our differences across Europe.

But what unites us? More specifically, what are the current big issues giving risk managers across Europe sleepless nights?

Perhaps not surprisingly it’s the big stuff: Interest rates, volatile currency markets, changing regulation, political risks and the challenges of growing in new markets. This was the overwhelming consensus given by 75 risk managers, from 11 European countries, who participated in a survey we recently sponsored with Commercial Risk Europe magazine.

These results do not come as a great shock; we hear these concerns from brokers and clients every day. And when set in the context of the increasingly globalized world we live in, it is easy to see why these issues in particular are giving risk managers and the boards of European companies such cause for concern.

The economic challenges over the recent years have meant that for many companies demand and growth in their own domestic markets has dried up. They have been forced to search for new revenue streams and cost efficiencies, leading many into new territories and emerging markets.

When under intense investor pressure, rapid expansion plans and changes in company strategy can seem like the best course of action, but such decisions can bring all kinds of unexpected risks, as proven by the supply chain problems caused by the catastrophic events in Japan and Thailand last year.

There is no doubt the role of the risk manager has become more difficult in recent years, new risks, the spiraling price of raw materials, and currency fluctuations can have a dramatic impact on the risk profile of a business.

The world is changing fast and the risk landscape is constantly evolving as new ways of working, new technologies and new markets develop. Now seems an apt time to challenge some stereotypes and the status quo. Risk and insurance managers are today being included in discussions that, in the past, they may have been excluded from and they are expected to find solutions.

Recent, high profile, Enterprise Risk Management challenges have pushed the issue of risk to the top of the boardroom agenda. Big strategic decisions are being made at all levels and it is clear that the risk management and insurance community has a role to play if we are to help ensure that the right decisions are made at the right time.

Risk managers need to leverage this environment to raise the profile of the risk profession. And by elevating the profession we will also attract fresh, new talent to the industry.

This is a real opportunity for risk managers and insurance professionals over Europe to demonstrate the value and expertise they can bring to the table and ultimately justify their position and the role of the risk industry in the boardroom.

Just like it takes time to establish and break down stereotypes so will it take time to establish risk management as central to business decision making. But progress is being made as the survey indicates.

Jason Harris, is chief executive, International Property and Casualty, at XL Group.

Jason Harris
Chief executive, International Property and Casualty, at XL Group