The Federation of European Risk Management Associations (FERMA) represents the risk management profession at European level
We bring together 21 risk management associations in 20 European countries, representing nearly 4800 risk managers active in a wide range of business sectors from major industrial and commercial companies to financial institutions and local government bodies. We provide the means of coordinating risk management and optimising the impact of these associations at a European level.
We promote communication among our members and within International Federation of Risk and Insurance Management Associations (IFRIMA) of which FERMA is a member: http://www.ifrima.org/
What is Risk Management?
In today’s competitive business environment, Risk Management – “managing the threats and opportunities to our businesses within acceptable risk tolerances” – plays a vital role in the success of all enterprises.
Risk Managers bring professional expertise to this role and to the success of their organisations. They occupy a central position, coordinating the risk activities of functions across the organisation and reporting to senior management and the board.
Historically in financial institutions, risk functions such as legal, compliance, audit, credit risk and market risk were managed in separate organisational silos. Operational risk was generally the responsibility of business units as part of their daily activities. Risk management was focused primarily on financial, predictable and quantifiable risks related to loss prevention. Since the 1980s, risk management has evolved to include corporate governance, alignment to strategic objectives, capital adequacy and stakeholder value. Additionally, regular discussions on risk management started appearing on corporate board agendas.
In 2003 FERMA has adopted the Risk Management Standard to establish a uniform pan-European approach to risk management procedures sets out a strategic process, starting with an organisation’s overall objectives and aspirations, through to the identification, evaluation and mitigation of risk, and finally the transfer of some of that risk to an insurer.
What do Risk Managers do?
The risk manager supports the organisation in achieving its objectives. He or she does this by identifying and assessing risks that could threaten these objectives or that could prevent the business taking advantage of opportunities. The risk manager’s then recommends suitable measures to mitigate possible negative consequences, including insurance.
Risk managers typically have come from different professional backgrounds, such as finance, engineering, legal or insurance. Today, an increasing number are also starting their careers training to be professional risk managers.
Risk identification, assessment and mitigation are the over-arching principles of the profession but the role for the individual can vary considerably according to the industry and to the risk manager’s training and skills.
The risk manager is a coordinator, educator and communicator.