Monthly Archives: January 2016

Apply now for 2016-7 FERMA-Lloyd’s programme

Applications for the next FERMA-Lloyd’s education programme for promising risk
managers will close by mid-February – or earlier if it is over-subscribed. Interested risk managers should contact their national association as soon as possible.

Starting on 21 April at Lloyd’s in London, this will be the third edition of this enormously successful project, which is free to participants. The programme consists of three two-day sessions at Lloyd’s covering a wide range of insurance and risk subjects. Participants also get to shadow brokers and underwriters and meet the most senior people in the market.

Lloyd's class hands raised

The sessions will take place:

  • Part 1: 21-22 April 2016
  • Part 2: 27-28 October 2016
  • Part3: TBC, April 2017

Planned topics for the first session in 2016 are:

  • Lloyd’s overview and the London market
  • Understanding and accessing the Lloyd’s and London insurance market
  • Risk management and performance management at Lloyd’s
  • Emerging risks
  • Lloyd’s cyber risk insurance initiative

Hear more from previous participant Aysan Sinanlioglu, President of the Enterprise Risk Management Association of Turkey, (ERMA) and Executive Vice President of Risk Management at Dogus Holding, and Lloyd’s Head of Europe, UK and Ireland, Benno Reischell.
https://www.youtube.com/watch?v=FWBLD_TUqss


Knowledge Corner

Here is FERMA’s selection of recently published useful reports for risk managers…

Business Interruption

Allianz Global Corporate and Specialty
Global Claims Review 2015
http://www.agcs.allianz.com/assets/PDFs/Reports/AGCS-Global-Claims-Review-2015.pdf

Global Risks
Control Risks Risk Map 2016 (English)
https://riskmap.controlrisks.com/

Environmental Responsibility

Environmental liability and enterprise insurance
FFSA (French)
http://www.ffsa.fr/sites/jcms/p1_476292/en/la-responsabilite-environnementale-et-lassurance-des-entreprises?cc=fn_7316

Fraud

Global Fraud Report
Kroll (English) available on registration
http://www.kroll.com/global-fraud-report

Natural Catastrophes 2015

Manuel of the AGERS working group on natural catastrophes
AGERS (Spanish)
http://www.agers.es/blog/ii-manual-cat-nat/
€20

Aon
http://thoughtleadership.aonbenfield.com/Documents/20160106-if-december-global-recap.pdf

Munich Re (English, German)
http://www.munichre.com/en/media-relations/publications/press-releases/2016/2016-01-04-press-release/index.html

Swiss Re (English, German)
http://www.swissre.com/media/news_releases/Preliminary_sigma_estimates_for_2015.html

Newsletters
Airmic
http://www.airmic.com/airmicnews
DVS (German)
http://www.dvs-schutzverband.de/publikationen/die-versicherungspraxis-vp/?L=1%2529
NARIM (Dutch)
http://www.narim.com/userfiles/File/NARIMagazine_december_2015.pdf


FERMA Newsletter 69 (Table of Content) – January 2016

Table of Contents


Expert Views: the changing aspects of managing terrorism risk

Terrorism has been a threat for some years and materialised sadly in France several times in 2015. We are facing a situation where victims of an attack in France (whatever their nationality) will be indemnified by state funds, either existing or through free access to medical services which was recently decided.

Anne-Marie Fournier, board member of AMRAE and Risk Manager of luxury brands group, KERING

Anne-Marie Fournier, board member of AMRAE and Risk Manager of luxury brands group, KERING

Employers have to take decisions on the protection of employees and security departments in industrial or commercial services companies decide on most appropriate measures depending on location, activity, reputation, etc. Most industries are checking more carefully all persons entering their locations and probably also checking many sensitive areas like for example crucial data of the company.

Regarding property damage and consequential business interruption (PD/BI), insurers underwriting PD/BI covers have an obligation to provide terrorism cover. As a counterpart of this mandatory cover, insurers access a global reinsurance scheme administered by GAREAT, a pool launched on 1 January 2002. GAREAT organises the tariff and reinsurance of this exposure with the commercial insurance market and through French state funds for “unlimited treaties” reinsured through the Caisse Centrale de Réassurance.

Unfortunately GAREAT has no dedicated reserves, as all premiums are transferred to the market reinsuring the terrorism exposures. As a consequence, there is a limited possibility of action in order to answer current needs for cover for “financial losses” without property damage. For example, activities that closed by prudence in the days following the recent attacks cannot benefit from business interruption cover if they have not suffered any property damage.

There are many activities with large numbers of visitors or participants which have cancelled activities and closed locations by prudence and have no insurance for these financial losses.

AMRAE would encourage this system to be reconsidered in order to leave the commercial market free to deliver the cover that it does elsewhere. There is hardly any other mandatory state schemes for terrorism insurance in the world; (many are optional.) The state-backed scheme could then concentrate on losses which cannot be obtained from commercial markets: nuclear, biological and chemical (NBC), pure financial losses, unlimited cover over €2B, etc.

Additional resources:
AMRAE resilience attentats (French)


Solvency II: Spotlight now turns on national regulators

Consistent implementation of Solvency II across the EU is the only guarantee that European insurance buyers will benefit from a new level playing field to optimise the protection of their organisation.

Because regulators have now a key role in the local enforcement of Solvency II, this is where our attention should be in 2016. The interpretation and local adjustment will play a fundamental part in how Solvency II will be perceived by the sector.

Since 1 January 2016, the rules set by the Solvency II Directive have been officially the new regulatory regime for the insurance industry in the European Union. The Directive has been transposed and implemented into the national laws of the 28 EU member states. From the adoption of the Directive in 2009 until the latest amendments in 2014, it is now up the national regulators to apply and enforce the new rules.

EIOPA offices in the “Westhafen Tower” - Frankfurt

EIOPA offices in the “Westhafen Tower” – Frankfurt


Solvency II also came in 2014 with a detailed text called a delegated act which specifies with further details how the national authorities will have to understand and effectively put into place the capital, governance and reporting requirements.

It remains to be seen how the local regulatory authorities will handle the additional workload. The new reporting rules and the documentation will require a lot of resources to be assessed and used properly. This is the necessary condition to turn the new regime into a really meaningful exercise and grasp the full potential of Solvency II.

The newly needed resources, however, are likely to increase the fees that most supervisors impose on insurers. With its privileged position and access to all EU local insurance supervisors, the European insurance and pensions authority, EIOPA, will have to monitor closely the impact of Solvency II in terms of the regulation costs for the whole industry.

EIOPA also announced that the principle of proportionality set forth by the Directive will be scrutinised to monitor how local regulators have translated and defined what is a captive and how the principle of proportionality should be applied to the eligible entity (Keynote speech of Gabriel Bernardino, Chairman of EIOPA, “Implementation of Solvency II: The dos and the don’ts” – International conference “Solvency II: What Can Go Wrong?”, Ljubljana, 2 September 2015).


Final agreement on data protection regulation

With the European Parliament’s agreement on a final text for the General Data Protection Regulation on 17 December 2015, the new European data protection regulation is now likely to enter into force in spring 2018.

In this final version of the regulation, large organisations will have to pay specific attention to the five following provisions:

– The mandatory appointment of a data protection officer but only for organisations whose core activities consist of processing a large amount of personal data (‘regular and systematic monitoring of data subjects on a large scale’);

– Data Protection Impact Assessment will become mandatory when there is a high risk for the rights and freedoms of individuals , in particular when using new technology;

– Fines for breaching the regulation of up to 4% of global turnover;

– The notification of a personal data breach to the supervisory authority no later than 72 hours after having become aware of it;

– No effective system of ‘one decision, one outcome’ for cross-borders cases. EU citizens could still complain to their local data protection authority even if the case is already pending in another EU jurisdiction.

Blue_Mountain_Supercomputer
The final version of the regulation still gives each national data protection authority a margin of discretion on a case-by-case basis to matters like sanctions, definition of high risk processing, claims handling and so on.

This is preventing the regulation from achieving the initial ‘one stop shop’ wanted in the original proposal from the European Commission in 2012.

This compromise with the Council (co-legislator) and the European Commission is the result of many months of negotiations among the three EU institutions. The text has been adopted by the Civil Liberties Committee, which is leading the dossier at the European Parliament, and will now be formally endorsed during a plenary session of the Parliament in March or April.

Two years after its publication in the official journal of the EU, the new regulation will be fully applicable in 2018 in the European Union.


“Solvency II Predictions” article featuring Jo Willaert, FERMA President

The article has been originally published  by Captives Review on 3 December 2015.

Captive review - solvency II predictions

Click above to read the full article

 


FERMA welcomes Global Risks Report 2016 call for a culture of integrated risk management

Click here to access the Global Risks Report by the World Economic Forum

Click here to access the Global Risks Report by the World Economic Forum

The Federation of European Risk Management Associations (FERMA) welcomes the call in the Global Risks Report 2016 for a culture of integrated risk management to create resilience a world that is facing risks which are manifesting themselves in new, often unpredictable and potentially very harmful ways.

FERMA strongly supports the view stated in the report that an integrated culture of risk management – the beliefs, norms and values that underpin daily actions – must span the whole organisation, including its supply chains. It cannot afford to have different policies, operating procedures and managers for different types of risk. Instead all parts of an organisation must work collaboratively on risk management through integrated planning.

FERMA President Jo Willaert said: “As risk managers, one of our principle roles is to see that risks are managed across the organisation and support the board and senior management in embedding and maintaining a transparent risk culture. We therefore welcome the conclusions of the Global Risks Report 2016, which underlines the need for companies, organisations and governments to follow a holistic approach to risk management so as to build resilience at national and global levels.

The Global Risks Report is published annually by the World Economic Form. The 2016 edition is available at http://www.weforum.org/reports/the-global-risks-report-2016

Ms Typhaine Beaupérin, FERMA CEO: typhaine.beauperin@ferma.eu, tel: +32 (2) 761 94 31
Lee Coppack, press contact: lee@coppack.co.uk, tel: +44 208 318 0330/ +44 7843 089904
All FERMA press releases can be found here.