Monday, 25th Nov 2019
CILA Executive Director, Malcolm Hyde, attended the 2019 FERMA (European Association of Risk Management Associations) conference on behalf of FUEDI – The European Federation of Loss Adjusting Experts.
Over three days 1,600 people attended the event, with over 600 FERMA Risk managers present. There were many sponsoring partners including Insurers, Brokers, Loss Adjusters and Damage Mitigation firms.
The conference centered on risks posed to businesses and these were enumerated as follows:
- Interruption to the Supply chain
- Artificial Intelligence (AI)
- The Green Deal
- Emission controls
- Longevity of the profession of risk management
FERMA advised that 75% of their Risk Manager membership were deeply concerned about the increasing accumulative effect of climate change and therefore natural catastrophes were a major risk to be considered. Businesses will also need to continue to have an ethical and environmentally friendly approach to business in order that the effects of climate change are abated.
With regard to AI, FERMA recognizes the important steps being taken by the European Union in terms of liabilities and the protection of personal data. FERMA see this as an ongoing issue.
FERMA are keen to attract the new generation of Risk Managers and to this end they are determined to promote Risk Management and Insurance as fascinating, collaborative and attractive. Risk Management was described as being at the forefront of the “internet of things”.
Political Risks - Brexit
The key note speaker was the former Belgium Prime Minister Guy Vertofstadt who talked about risk in terms of political risks.
Playing a role in the Brexit negotiations, Mr Vertofstadt explained that the EU saw the UK’s decision to leave as a failing in part of the EU itself. Whilst further departures were initially predicted Mr Vertofstadt stated that there had been if anything a hardening of resolve amongst the remaining 27 states.
A free trade agreement with the UK would largely be dependent upon the UKs acceptance of regulatory alignment and a “level playing field”. In any event he anticipated an agreement would take at least three years to secure.
Mr Vertofstadt went on to explain his view of the requirements of the EU. These largely center on greater and stronger ties. He explained that only around 30% of trade is covered by the free market. Digital was an area not covered. The result being that it is far easier to roll out new digital platforms in the US (one regulator) than in the EU (28 regulators.) This is the reason Spotify (a Swedish company) left the EU and went to the US initially.
To further explain the inefficiencies he advised that the EU spend a combined sum of 40% of the US total budget on Defence but had a capability of just 10% of the US – why? Because the EU do everything 28 times over.
Similar examples were given about the international finance crisis where the US took actions within 9 months that took the EU nine years.
Mr Vertofstadt sees nation states is an integral part of the future of the world but pointed out that India was in effect around 200 states with many different languages. His view was that major collectives/empires such as the US, China, India and Asia will lead the way. The EU had to become far more strategic in its “empire” approach.
Overall FERMA are dedicated to the following priorities:
- European leadership in digital transformation to exploit growth opportunities
- Transition to sustainable economy
- Leadership in risk management education
- Leadership in a stable European Insurance Market