Julia Graham's presentation to FUEDI general assembly 2014

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Julia Graham's presentation to FUEDI general assembly 2014

  1. 1. We live and work in a riskier world New challenges for risk managers How adjusters can help FUEDI General Assembly 2014
  2. 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
  3. 3. Knowledge Skills EthicsCPD Business model What FERMA is doing
  4. 4. Where we are22 member associations in 20 countries 4336 individual members who are responsible for risk management and / or insurance in their organisations
  5. 5. Who we are
  6. 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. 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. 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
  9. 9. The first standards committee
  10. 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. 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. 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
  13. 13. Interconnections identified Graphic to be replaced Interconnections map – perceptions survey Source: World Economic Forum, Global Risks 2014
  14. 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. 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. 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. 17. Managing cyber risk is not a project Source: Global Information Security Survey 2012' by Ernst & Young (2013 report now also available)
  18. 18. How to improve cyber security Source: 10 Steps to Cyber Security – UK Executive Companion' produced jointly by GCHQ, BIS and CPNI
  19. 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. 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. 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
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