Newsletter Nr 45


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Newsletter Nr 45

  1. 1. Newsletter N°45 December 2011 New FERMA-ECIIA collaboration offers senior executives crucial support on risk management responsibilitiesFERMA and the European Confederation Institutes of Internal that corporations are able to comply with the monitoringAuditing (ECIIA) have joined forces to provide practical advice function explained in the article.”for senior managers on how to help their companies meet risk In an environment where the Commission is not generallymanagement, internal control and internal audit happy with the way corporate governance is performing inresponsibilities under European law. Europe, such compliance can help reduce further unwantedThe fruit of this collaboration is Part 2 of the Implementation regulatory attention, according to Carolyn Dittmeier,Guidance on the 8th Company Law Directive* for Senior President of ECIIA. She said: “Today, it is crucial forManagers and Executive Committees, which was launched on organisations to think clearly about their internal assurance14 December in Brussels. It is now available free to download processes to avoid being subject to additional externalfrom the FERMA website: regulation.”content/uploads/2011/12/eciia-ferma-guidance-on-the-8th- She added: “The 8th EU Company Law Directive coupled witheu-company-law-directive-part-2.pdf our papers gives organisations the necessary guidance toThis is the second part of the Guidance on the 8th Company enable them to move forward with a governance frameworkLaw Directive produced by FERMA and ECIIA. Part 1 for that provides a risk aware culture to maximise theboards and audit committees was published in September opportunities of success.”2010. Both cover article 41-2b of the Directive: “Monitoring The Guidance is not intended to deliver definitive answers butthe effectiveness of internal control, internal audit and risk offers best practice lessons drawn from the real-life experiencemanagement systems.” of members of FERMA and ECIIA. It takes managers through aAt the time, FERMA and ECIIA stated that boards and audit series of questions that show how they can support the boardcommittees would need the support of their senior executives in managing risks, and making best use of internal control andto fulfil their responsibilities under the Directive, but that assurance from internal audit.there was no practical implementation guide for Sample questions:management. Part 2 of the Guidance now fills this gap. Among the general questions the Guidance prompts theFERMA has presented copies of the Guidance to members of executive committee ask are:the European Commission, and plans to have furtherdiscussions with the Commission on its use and wider  Are risk management and control processes in line withdiffusion. the company’s objectives and in accord with the policies in place?Jorge Luzzi, President of FERMA, said: “Our collaborationwith ECIIA allows us to take advantage of the experience of  Is the independence of risk management, internal controlrisk managers and internal auditors to produce practical and internal audit guaranteed so that the executiveguidance that senior managers can adapt to the culture, committee is informed of major risks and controlactivities and organisation of their companies. Good activities?governance depends on managers being conscious that good  Is the executive committee informed of the major risks ofcontrol reinforces management systems.” the organisation at each level?One of the authors of the Guidance, former FERMA President Other sets of questions specifically cover internal control andMarie Gemma Dequae explained: “It may be that today not all internal audit.companies are already fully aware of the contents of art.412.b and how to apply it. The focus of both documents is to *The 8th European Company Law Directive is 2006/43/EC andgive more information on how to improve internal processes specifically deals with statutory audits of annual accounts andand reporting processes to audit committees and boards, so consolidated accounts.FERMA Newsletter N°45 ● December 2011
  2. 2. Letter Risk managers look for FERMA action on supply chain risksfromBrussels Risk managers want FERMA to 2011 were the principal causes, stimulate discussion about supply followed by the Eyjafjallajökull chain risks and insurance solutions at Iceland volcano eruption in 2010 that European and member association caused widespread disruption to air level, according to the results of an traffic. Only 13 of the 153 responsesThis is the last FERMA newsletter online survey. cited political upheaval as a source of business disruption.of 2011. We are at the close of one The FERMA survey, which receivedyear and at the beginning of a new 153 responses with a high proportion FERMA conducted the surveyone. It is a good time to look what from members in manufacturing, following comments at the 2011we did during this year, but more found that more than half – 52 FERMA Risk Forum in Stockholm inimportant to see what is ahead of percent – were very concerned about October from then President Peter continuity of supply from direct den Dekker who said that theus in 2012. suppliers, and 36 percent said they insurance market was not meetingIt is amazing to see how FERMA were somewhat concerned. When it risk managers needs for protectionhas changed this year. The came to disruption to their suppliers against supply chain disruption.activities we have been involved in sources, 35 percent said they were The results of the survey confirmedhave never been so numerous: the very concerned and 48 percent his comments. Half of those somewhat concerned.Forum, a completely renewed responding to the survey say they dowebsite, the new logo, social Most respondents want FERMA to not buy contingent or non-damagemedia, European representation, encourage national member business interruption and 46 percentnew members… And there will be associations to open discussions with said coverage and capacity were notmore in 2012. It used to be quiet their local insurance market and sufficient; 28 percent found promote discussion of the issues. A conditions too restrictive and 26for several months after a Forum, smaller proportion, 31 percent, would percent stated the cost was too high.but those days are gone! like to see FERMA commission more Only 14 percent felt that existingIncreased cooperation between research on members’ experience and insurance coverage and capacitythe FERMA team and all actors 28 percent were interested in were adequate. (Multiple answersinvolved has made it all happen, research on non-insurance solutions, were allowed.) such as securitisation. (Multipleand I thank all of them for their FERMA board member Igor answers were allowed.)dedication. Mikhaylov commented: “In light of In terms of recent experience, 21 the current limitations of insurance,For 2012 we are planning, among percent or 32 risk managers said their businesses need to apply riskother things, to engage the business had suffered a material management to the whole supplymembership and raise awareness breach in its supply chain over the chain. Risks of partners andamong our communities though past two years. The Japanese subcontractors should be consideredour growing social media earthquake and tsunami in March to reduce their vulnerability to supplypresence, with thought leadership chain ruptures. ”from board members and nationalpresidents. We are revisiting theproject list for next year to fulfillthe expectations of our members.More will be revealed in the nextedition. In the meantime, I wishyou a very merry Christmas and aHappy New Year!Florence Bindelle Igor MikhaylovExecutive Manager Board Member of FERMAPage 2 FERMA Newsletter N°45 ● December 2011
  3. 3. Seminar 2012 venue announced: Versailles, France 22 & 23 October 2012 Benchmarking survey to start in early spring Versailles Tourist Office/C. MiletThe historic French city of Axa Corporate Solutions and ErnstVersailles will be the venue for the & Young have confirmed that they A step forward on global2012 FERMA Seminar on 22 and 23October. The Seminar, which will again sponsor the FERMA risk management benchmarking compliancetakes place in alternate years from survey, the widest research into thethe FERMA Forum, is the occasion status and implementation of risk FERMA has welcomed progress on the creationfor the announcement of the management in Europe. Planning is of a global insurance compliance databaseresults of the biannual risk taking place over the next few taken by UK member association benchmarking months, and the launch is expected Airmic asked now potential service providerssurvey. in early spring. for an expression of interest in providing a database of international insuranceA city on the western edge of With the experience of five requirements by the end of January 2012.Paris, Versailles is best known for previous surveys, FERMA and itsits vast royal palace with its partners are looking to deepen the Airmic is looking for firms able to create andmirrored hall and its gardens built value of the results with interviews then maintain a database, which will containin the late 17th century by King with senior executives to capture details of regulations on a territory-by-territoryLouis XIV. The seminar will not stakeholders’ expectations of risk basis. It will consider splitting the twotake place in the palace - but in the management and possible future functions, so that interested parties can bid fordedicated congress centre with developments. The aim, says one or other. Insurers, brokers, specialist dataviews of it. FERMA Executive Manager companies and international legal firms are Florence Bindelle, is to make the among those who have shown an interestFERMA considered both Paris and informally. results very useful for FERMALondon for the 2012 Seminar. Its members. “The wide level of market interest in thisreasons for choosing Versailles project shows what an important issue it is –were exclusive use of an attractive The themes will be similar to one that unites underwriters, brokers andconference centre with sufficient previous surveys with an emphasis buyers,” said Airmic board member Helenroom for more than 400 delegates, on the implementation of risk Hayden, who spoke on the subject at theeasy access from central Paris and governance and processes and risk FERMA Forum in October. “The work willthe quality of the location. maturity. There will also be a underpin the integrity of insurance question on the deployment of the programmes and ultimately their ability toThis is the also first FERMA event FERMA-ECIIA Guidance on the 8th deliver for clients.”to take place in France, and since EU Company Law Directive. In 2012,most of the members of the The main focus will be to provide global FERMA hopes to top the recordFrench association AMRAE are guidance on admitted and non-admitted number of 782 responses receivedbased in Paris, FERMA hopes to insurers by jurisdiction. This varies not only from risk professionals inattract risk managers who do not between countries, but also within some companies and public organisationsregularly attend FERMA events. territories such as the US. It can also depend on across 19 countries in Europe.The 2010 Seminar in London was the class of business being written. Failure tovery successful in interesting From a practical perspective, comply can result in fines, cancellation ofmembers of the UK association FERMA and the partners are cover, reputational damage and, in exceptionalAirmic. Both AMRAE and Airmic looking at ways at making it cases, imprisonment.were keen to host the Seminar, simpler for members to respond toand FERMA is grateful for their the questions and at increasing the The project also has the support of the International Underwriting Association,support. number of languages in which the London and the International Insurance survey is available.More information on the Seminar, Brokers’ Association. Other organisations areincluding accommodation and Members who would like to being kept abreast of developments, includingtransport, will be provided in the comment can contact Florence the North American risk managementnew year. Bindelle at association RIMS and the World Federation of Insurance Intermediaries.FERMA Newsletter N°45 ● December 2011 Page 3
  4. 4. Around the associations Agers (Spain) according to the second annual Spotlight on Slovenia (SI.RISK) More than 300 risk managers and Airmic casualty benchmarking representatives of the insurance survey. The key issues remained The small country of Slovenia is truly at industry took part in AGERS’s 17th consistent with last year’s results: the centre of Europe. It touches the Alps annual seminar on expectations for global compliance with local tax laws and the Mediterranean and has borders the coming insurance renewal season, and with legal, regulatory and with Italy, Croatia, Hungary and Austria. held in Madrid in November. Much insurance regulations. Another top It also has a small but enthusiastic risk discussion covered the current priority is getting policies issued in a management community whose economic and Eurozone crises and timely fashion. association, SI. RISK, is one of FERMAs their implications, followed by The benchmarking survey was newest members. consideration of the current market sponsored by Chartis which drew for specific insurance classes, attention to the contrast between The capital Ljubljana was the venue for including liability, property damage a presentation on FERMA by Secretary the economic environment and the and financial risks. Delegates also insurance strategies employed by General Pierre Sonigo and Executive learned from the office of the Manager Florence Bindelle in November many companies. insurance regulator that Solvency II which brought together members of SI. could enter into force in Spain in Annual conference: The 2012 annual RISK and the faculty of economics at January 2014. Airmic conference will be held in Ljubljana University, and Liverpool from 11-13 June. representatives of the national AGERS says the seminar day on insurance, broking and audit insurance programme renewals 2012 associations. was particularly valuable in the AMRAE (France) current, volatile economic situation According to SI. RISK President Maja and as a way of approaching the The 20th Rencontres de l’AMRAE, Sustersic, the seminar was very useful in strategies that the insurance sector the association’s annual gathering, strengthening contacts with the will use to face the realities of the will take place in Deauville from 8-10 university and industry representatives, coming months. February 2012. At one plenary and for them to see the value of the session, FERMA President Jorge association’s FERMA membership. The Luzzi and the President of AMRAE, university, she said, currently has risk Gilbert Canameras, will provide a management as part of separate tour of risk management practice courses, but it is now looking at bringing across Europe with the help of risk together the different topics into a managers from several countries. single short course and wants to work with SI. RISK. There is also interest in There will also be a workshop the FERMA-ECIIA Guidelines on dedicated to FERMA themes, Implementation of the 8th European moderated by Vice President Michel Company Law Directive. Dennery with the participation of Jorge Luzzi. SI. RISK has three events so far planned for 2012. In March there will be an event on supply chain risks. In May, a practical Airmic (UK) ANRA (Italy) seminar on risk management in Annual dinner subsidiaries, which will cover also how Recent ANRA events have included to do international programmes, since The annual Airmic dinner held in its annual conference on the subject companies in Slovenia are doing London drew 761 members and guests of “Back to insurance: which business in other parts of the former who heard the CEO of Lloyd’s Richard solutions in less secure world?”, plus Yugoslavia and abroad, and risk Ward as guest speaker and Airmic a training course on claims handling managers need to understand the chair, Paul Taylor, a former FERMA and a presence at a workshop on regulatory and political exposures. The board member. finance and administration at a top third will take place in September when Survey: Risk managers’ concerns Italian management forum. the members will discuss risk little changed, despite turbulence Activities in early 2012 include management standards. training courses on risk management Global economic and political uncertainty has had little impact on 1st and 2nd module and claims global insurance programmes, handling.Page 4 FERMA Newsletter N°45 ● December 2011
  5. 5. Around the associationsBELRIM (Belgium) During 2012, FinnRiMa will hold official members’ meetings in April and November with three or four regularAt the annual cocktail of the association in December, mini-seminars on topical issues during the year. However,Etienne de Callataÿ, Chief Economist of the Bank Degroof, the association’s main event for year will be its 25thgave a lively presentation entitled "From one crisis to the anniversary seminar and dinner on 16 October in macro-economic risks in Belgium and Europe".Gaëtan Lefèvre, Chairman of the association, welcomedover 150 guests, pointing out the challenges that lie ahead IGREA (Spain)in these economically difficult times. He urged insurers andbrokers to keep in mind the needs of their clients during A day on insurance renewals was the title of an eventthe coming contract renewals. organised by IGREA in Madrid at the end of November for members to discuss prospects for property, liability andIn November, all members were welcomed at the Château directors’ and officers’ programmes for 2012.CMI in Liège for an exchange on travel and foreignoperations risks, enhanced by some televoting. The On 3 January, IGREA will hold a working session with aaudience greatly appreciated this innovation as it made the representative of the new European Insurance andmeeting very interactive. Occupational Pensions Authority.BELRIM invites all FERMA members to attend theirmeetings. On the agenda for the coming months: SIRM (Switzerland)January: CAR - EARFebruary: Credit management SIRM recorded a record number of participants for its 2011March: Social media risks Forum held at Pfäffikon on Lake Zurich on the subject of cyber crime and cyber security. The moderator was Thomas Dübendorfer a software engineer and tech lead atDARIM (Denmark) Google, Zurich.DARIM will celebrate its 25th anniversary with a major SIRM is now preparing its 2012 programme, with two wellevent in February and other activities throughout the year.More details to come in the next FERMA newsletter. established cornerstones: the general assembly in Basle on 9 May to deal with statutory matters and to present a topical risk management subject and the 39th SIRM ForumDVS (Germany) on 6-7 November 2012, at a venue to be announcedThe annual symposium will take place from 4-6 September Throughout the year, the SIRM board will also lead the2012 in Munich. associations relaunch programme, strengthening communication channels with members, as well as withFinnRiMa (Finland) market partners and the regulatory authorities. Another sign of the associations renewal is the updated SIRMFinnRiMa is to merge with the SME Risk Management website - discover it at (SM RM Forum) which will provide more access tothis business sector and new opportunities, includingdeveloping risk management training. SM RM Forum has New associationsbeen active with various universities and other educationproviders. FERMA is pleased to support individual risk managers in other European countries in setting up their own riskFinnRiMa is collaborating strongly with various players management asso-ciations, and eventually joining thewithin Finnish society, for example working with the FERMA community.Confederation of Finnish Industries to clarify the role of riskmanagement in large and smaller companies. During 2012, Most recently, risk managersFinnRiMa will continue to support implementation of ISO in Hungary and Croatia have31000 in Finnish businesses and other organisations with sought FERMA’s advice onthe help of the Confederation of Finnish Industries, among setting up local organisations.others. FEDERATION OF EUROPEAN RISK MANAGEMENT ASSOCIATIONS - FERMA a.i.s.b.l. This Newsletter is produced by FERMA. If you have any questions concerning this Newsletter, please contact Florence Bindelle at FERMA on Tel. +32 2 761 94 32 – email: © Copyright 2011 FERMA. All Rights Reserved. No distribution or reproduction of this issue or any portion thereof is allowed without our written permission except by the recipient for internal use only within the recipients own organisation.FERMA Newsletter N°45 ● December 2011 Page 5