Optimal risk-sharing fundamental to green transition: FERMA’s Wegener

Optimal risk-sharing is fundamental to a successful transition to carbon neutrality and in the battle against cyber-crime, according to Dirk Wegener, President of the Federation of European Risk Managers (FERMA).

Speaking at the FERMA Forum this week, Wegener raised three main areas of concern for risk managers: the transition to carbon neutrality, systemic risks and cyber risks and how a protection gap was threatening optimal risk sharing.

For many risk managers, he said, the pandemic allowed them to demonstrate their capabilities and the value of risk management for organisations in a crisis.

They showed that enterprise risk management enabled businesses to remain resilient and in business.

“In a time of such great uncertainty, it was satisfying for risk managers to put their skills to use to support their companies and their colleagues,” Wegener stated. “It is not so surprising 90% said the pandemic had made risk management more important to their organisation.”

However, he also stated that the pandemic had been an uncomfortable time for insurance managers who had had the duty of explaining to their boards why certain risks such as non-damage business interruption were not covered.

FERMA believes that mitigating systemic and catastrophe risks requires the combined efforts of insureds, insurers and governments, and continues to advocate for the creation of a European public-private partnership to build the risk transfer capacity that companies need.

Wegener urged insurers to join FERMA in this effort, saying that it was an opportunity to use their expertise and extend their social role.

“Today, we are in the early stages of what may be the economic greatest transition for our societies since the industrial revolution,” Wegener concluded. “It requires many changes from our businesses. Yes, that is going to be demanding, but it’s also exciting, and we have a great contribution to make. Closing the protection gap is an important part of that.”

“Enterprise risk management is the bedrock, the foundation of this work, and risk leadership is our compass to achieving what we want for our greener and digital planet.”

Source: Reinsurance News, https://www.reinsurancene.ws/optimal-risk-sharing-fundamental-to-green-transition-fermas-wegener/