European risk managers are taking a more strategic role in their companies with increasing access to top management levels and the board, according to a survey published by the Federation of European Risk Management Associations (FERMA).
Two-thirds of the survey’s 634 respondents said they report to the board or top management level, while over two thirds (68%) are now involved in implementing risk culture across their organisation. Meanwhile 62% of European risk managers are developing risk management as a part of business strategy.
The European Risk and Insurance Survey was issued to FERMA’s 22 member organisations, including Airmic. It was published at the FERMA Seminar in Malta this month.
The results chime with a survey of Airmic members published in June this year which showed that risk managers now find it dramatically easier to gain attention from the top. Last year, 43% cited lack of access to the board as a number one or two concern. In 2016, this had reduced to 18%. Respondents also reported greater support and leadership from the board on risk issues.
However, Julia Graham, Airmic’s deputy CEO, said that while boardrooms are increasingly recognising the importance of risk management, research indicates that more is needed to embed risk management across businesses.
Ms Graham commented: “I am delighted to see FERMA’s survey add to the growing evidence that the message is getting through at the top of the company.
“However, successful enterprise risk management requires an integrated approach: it is not possible for the risk function or senior management alone to be effective at detecting risks, and in particular identifying aggregations of risk across a business.”
For example, in the survey of Airmic members, almost three quarters of respondents said that their number one or two concern is risk management and risk education not being fully integrated with wider business units. Similarly, in a business resilience survey conducted by consultants Control Risks this year, 48% of respondents said they remain reliant on centralised governance and oversight instead of multi-disciplinary risk meetings.
The FERMA survey highlighted digital and cyber risks as an area where risk managers would welcome more enterprise-wide collaboration. According to Jo Willaert, president of FERMA, “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.”
Other findings of the European Risk and Insurance Survey include a 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.
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%), but loss prevention has become the top priority.
The full European Risk and Insurance Report and supporting documents is available on the FERMA website.