Two national Risk Management Associations, Italian ANRA and Slovenian SI.RISK, held their second joint yearly forum on March 25th, 2014 at Triglav Insurance Company in Ljubljana which also supported the event. Around thirty members of both associations and other invited participants attended the forum to discuss Business Interruption Insurance and Business Continuity Planning issues.
Due to the fact that FERMA’s Executive Board had a meeting the day earlier in Bled, Slovenia, the organizers of the forum also had the opportunity to welcome the executive board members of FERMA as the Honored Guests of this year’s BILATERAL FORUM ANRA – SI.RISK.
Maja Sustersic and Paolo Rubini
Maja Šušteršič, SI.RISK President and Paolo Rubini, ANRA President welcomed the forum participants and gave the floor to Julia Graham, FERMA President to open the second bilateral forum of SI.RISK and ANRA. Graham expressed her content with being present at the forum and emphasized the importance of such events which give their participants the possibility to meet their peers, exchange views and experiences and discuss topics of interest in more detail. “Being present at such events enables FERMA to meet members of national risk management associations and get firsthand information on issues and areas where FERMA can offer more support for increased work efficiency of their members.” Graham presented the mission of FERMA and its activities in promoting best practice in risk management. The participants received information about the two main FERMA’s projects: certification and benchmarking survey. Graham invited all present as well as their fellow risk managers to meet in Brussels during FERMA’s seminar on October, 20th and 21st 2014, where the results of the benchmarking surveywill also be presented, and take the opportunity to celebrate FERMA’s 40th anniversary among risk management professionals.
Stefan Feldhütter, Munich RE gave a general introduction on Contingent Business Interruption Insurance covers with regard to perils and property covered from the insurer’s perspective. While supply chains become increasingly vulnerable due to predominantly environmental issues and their inherent risks becomes more accumulated due to economic factors, the overall risks originating from supply chain and sales channels significantly increase the BI exposure of most industries. Feldhütter stated that Contingent Business Interruption (CBI) became more important to business as ever and increasingly challenging for insurers when weighing the risk factors and marketable cost of such insurance. Feldhütter concluded his presentation with a CBI case study relating to power outages caused by partial break down of transmission grid in some areas of Slovenia caused by weather disaster in early February 2014.
Views on (Contingent) Business Interruption Insurance in relation to supply chain were further developed by Ian Hasson, Head of Forensic Accounting, Crawford & Company. In his opinion a company aiming at ensuring business continuity should have a very good knowledge of various supply chains’ features and their vulnerability. Hasson pointed out the importance of managing residual risks, besides getting a CBI coverage, which may prove to be a key factor of survival for organisations having just-in-time inventory management.
Forum continued with a presentation of the Triglav, the leading insurance company in Slovenia by Gorazd Jenko. Triglav Group is present in eight markets and seven countries, and employs over 5,400 people. Triglav currently holds A- (S&P) and A- (AM Best) rating.
Companies’ experiences with (Contingent) Business Interruption Insurance and Business Continuity Plan were shared by Maja Šušteršič, Petrol d.d. and Marco Pisciotta, Prysmian during the following two presentations. Šušteršič presented the participants with Petrol’s basic approach to creating a business continuity plan for case of major business disruption (e.g. epidemic), while Piscotta discussed the company’s approach to operational risk mitigation strategies and techniques to secure Prysmian operations.
Participants of the roundtable (Stefan Feldhütter, Munich RE, Maja Šušteršič, Petrol d.d. and Marco Pisciotta, Prysmian) discussed companies’ experiences with (C)BI Insurance and Insurers. The panel agreed that a prudent company will not trade off a Business Continuity Plan with buying a (C)BI insurance, but will rather consider a (C)BI Insurance as a possible tool within the Business Continuity Plan framework. The panel further agreed that in order for (C)BI to work optimally and within expectations for the insured and the insurer, the insurance process should be transparent with reasonably managed asymmetries of information and a partnership between the insurer and the insured at the end, rather than a buyer and a seller of insurance. The roundtable was chaired by Klemen Potisek, Holding Slovenske elektrarne.
The main conclusion of the forum was: “The companies should do a good risk assessment and treatment including preventive measures, business continuity plans, and, last but not least, an efficient insurance coverage.”