According to the latest survey by the Observatory Permanent on Risk Management in Italian SMEs by RiskGovernance-Politecnico di Milano, the situation is ambiguous: there has been a certain increase in the interest and knowledge concerning risk management issues, but application is still blocked by structural and cost-related constraints and is thus limited to financial aspects. This approach is accounted by the economic crisis, which has turned out to be counter-productive for recovery and even for the survival of companies.

Translated into numbers: 90% of small enterprises and 82% of medium-sized enterprises don’t have an internal professional Risk Manager.

The SME market has changed during the past two years in our country, just like the risk perception of the managers that lead enterprises has changed. This is what has emerged from the survey conducted by Observatory Permanent on Risk Management in Italian SMEs by RiskGovernance-Politecnico di Milano, of which some results were discussed during the convention “Enterprises and Risk: Emerging Threats and Possible Solutions,” which was promoted by Insurance Connect and sponsored among others by ANRA

The Observatory interviewed a sample of 701 Italian enterprises representing all economic sectors, in particular those belonging to the macro-sectors of the service (36% of the sample) and manufacturing industries (41%). According to the survey, faced with the need to adapt to new ways of approaching the market, enterprises have initiated renovation processes, often neglecting risk-related aspects. For Italian SMEs the way out of the recession seems still far away and in two years since the previous survey enterprises that feel that the market is shrinking have increased by 20%, reaching 46% of the total; at least, 54% of respondents are optimistic: they think their future looks brighter compared to two years ago.

“It really seems that the worsening of business risks, which is due to the continuing weakness of the economy, has further weakened the good practice of Risk Management – says Paolo Rubini, President of ANRA. The so-called animal spirits of entrepreneurs have gradually focused, in an almost natural way, on risks that may result in opportunities, at the expense of the management of risks that are only harbingers of losses. Financial risks (cited by 58%) have prevailed over operational risks, so that the most “popular” insurance policies have ended up being trade credit insurance policies. The survey by the RiskGovernance-Politecnico di Milano on risk management in SMEs, has revealed alarming numbers, given that 90% of small enterprises and 82% of medium-sized enterprises don’t have an internal Risk Manager. In addition, 47% of enterprises today perceive risk exclusively as a negative factor to be avoided: the percentage rises to 68% when it comes to small enterprises. Instead, we must underline in every possible way that risk is an actual event, with which any human or entrepreneurial action has to deal with and, therefore, must be handled as such, also considering the opportunities that are inherent in it.

Also the confrontational strategy implemented by Italian enterprises against the crisis has changed slightly over the past two years, with fewer enterprises looking abroad in search of growing markets or of available raw materials at lower costs (45% of respondents compared with 59% two years ago, but it remains a priority for those who perceive that the market is growing), and with less confidence in the opportunity to make cost-effective investments in our country. In contrast, to make a change in their situation, the enterprises that perceive that the market is shrinking aim at their internal structure, changing in 90% of cases their own top management. Immediately behind the search for new markets, the most sought-after solutions are the expansion of one’s product portfolio (33,6%) and the opening of new sales channels (24,3%). It is interesting to note that enterprises facing new markets often have a lower perception of risk, an aspect that denotes an inadequate preparation in dealing with new and unknown situations whose critical aspects some enterprises are not able to assess completely.

This situation is significantly affected by the absence, in 63% of surveyed enterprises, of the use of risk management techniques, while slightly more than half of the remaining 37% considers risks in a formal way and with a structured process – a proportion greater than 10%, compared to 2012 findings. The reason is to be found especially in the absence of an internal figure dedicated exclusively to risk management, a role often entrusted to internal figures who generally operate with other and more important responsibilities: this situation concerns 90% of small enterprises and 82% of medium-sized ones, which generally rely on CEOs for risk assessment (72%) or on chief financial officers (13%). The absence of a dedicated figure is mainly due to two causes, the incidence of the cost for enterprises or a real lack of interest in the function, which is only intended as formal. The responsibilities assigned to companies today, such as the 231 law or transposed EU directives, require the presence of figures who have the skills and enough attention to recognize risk and manage it. Today’s enterprises have three options: choosing and training an internal figure, subscribing to the risk engineering services provided by many companies, or outsourcing to consulting firms.

There seems to have been a certain increase of attention to the need for proper risk management, as the Observatory’s research indicates that SMEs have increased spending in this area, shifting from 0,3% of total turnover in 2012 to 3,8% in enterprises with total revenues amounting to more than 10 million. Medium-sized enterprises have a long-term perspective and invest more readily in risk management, thereby demonstrating a greater culture even though the level is still inadequate. This is a trend that ANRA is also observing from the number of enrollments in courses promoting partnerships and that focus in particular on issues related to risk engineering, environmental risk and clinical risk.