28 June 2023Analysis

FERMA: risk management key to leadership role

Companies are operating in a global risk context that is creating the opportunity for the risk management profession to be elevated to a leadership position, according to Dirk Wegener, President of The Federation of European Risk Management Associations (FERMA).

Wenger was speaking at FERMA’s general assembly in Brussels.

“It is our view that risk management must be seen as a value-adding function, one that extends beyond the management of operational risks and engages directly with the C-suite to support the broader strategic ambitions of our companies and organisations,” Wegener said in his opening address.

Aligned with FERMA’s 2023 Theme of “Be Risk Leaders”, he highlighted how this has formed a central component of all activities conducted by FERMA over the last 12 months and will continue to do so.

On the cyber front, Wegener noted the recent publication of the ground-breaking, multi-stakeholder report – Cyber Insurance Dialogue: How Europe can lead the way to cyber resilience, which brought together experts from the risk, insurance and broking arenas to develop a series of measures to create a future-fit cyber insurance market and enable Europe to lead the world in cyber resilience.

He also noted FERMA’s continuing dialogue on proportionality and the complex penalty environment proposed under the EU Cyber Resilience Act, as well as on the need for the development of data-sharing standards in the financial sector at the EU level.

Turning to sustainability and ESG, Wegener reflected on the work of FERMA to equip its members with the tools to play a central role in managing ESG and associated risks. FERMA is advocating at the EU level for changes across multiple legislative developments aimed at facilitating the transition to net zero, including on the Corporate Sustainability Reporting Directive, the Corporate Sustainability Due Diligence Directive, and the Critical Raw Materials Act. Further, FERMA is seeking to collaborate with the insurance sector to increase engagement with corporate buyers on how to support their transition to net zero.

Wegener also highlighted FERMA’s considerable success in advocating for proportional treatment for captives under the amendments to the Solvency II Directive, which is under political discussions at the European Parliament, and commended the achievements of FERMA’s Captive Working Group and their continuing advocacy efforts.

In his closing comments, he said: “The world is changing, risk is changing. There are challenges ahead. But I believe that if we all continue to work together, we can truly elevate the risk manager to risk leader – and that will be good for us all.”