As he took over as President of FERMA, Jorge Luzzi defined his imperatives over the next two years in three words: “communication, inter-action and innovation.” His remarks closed the most successful FERMA Forum so far with more than 1,500 risk professionals taking part.
With FERMA’s growing membership, now 21 associations in 19 European countries and likely to expand further, Luzzi commented on the diversity of the members of these groups. And he said: “FERMA should represent all of them and be an instrument to elevate their status.”
Luzzi, who has been Vice President of FERMA for the previous two years, paid tribute to outgoing President Peter den Dekker. He would not behave like a politician and claim that everything that had gone before was wrong and that great reforms were needed. Instead, he said, his predecessor had done “a great job” and FERMA was in good health.
The formal proceedings of the 2011 Forum had begun in a serious way with the keynote address by the CEO of Deutsche Bank, Josef Ackermann. He told the audience that they were witnessing “a tectonic shift” in the outlook for the financial services industry, especially in banking. The whole structure of the industry was changing fundamentally.
Growth prospects for the financial industry in the West were limited, along with a shift in economic power from Western economies towards emerging markets, and financial services were facing stringent new regulations. Ackermann argued that although changes to the regulatory framework were necessary, he warned that governments “should not cause additional harm” when putting them into effect.
There was, however, some encouragement for FERMA members in his remarks. Ackermann said that many financial institutions had strengthened the role of risk managers following the financial crisis. He commented: “Deficiencies in controlling risk were at the heart of the crisis. As a result many financial institutions have strengthened the role of risk managers within their organisations, have revised their risk methodologies and revisited the instruments they use for mitigating and controlling risk.”
The second keynote speaker, Magnus Lindkvist, however, was able to see uncertainty about the future in a more positive light and he urged risk managers to do so, too. Styling himself as a trendspotter and futurologist, Lindkvist said: “You are all trend spotters. That’s what risk management is all about. What is happening and in which direction is it pointing.”
You should, he told the audience, make ideas join up, experiment and use failures to create success. Become, he urged them, “chief imaginary officers.”
- What’s happening
Something which has happened and will continue to do so is that business has become much more interdependent and complex. Natural catastrophes in the two years since the previous Forum had revealed this clearly, said FERMA President Peter den Dekker in his opening remarks.
“Our businesses are so complex that we cannot control every aspect of our supply chains when there is a catastrophe.” stated den Dekker. He called on the insurers and reinsurers to understand their clients’ new business models and support them by finding ways of providing contingent business interruption insurance. Risk managers should work with their underwriters to make them confident that they understood the risks.
“To get the sort of financial protection that we need in the face of catastrophes – and to make it a worthwhile business for the insurers and reinsurers – is an issue for us working together,” he said.
The Forum concluded with the panel discussion among leaders of the insurance industry – What keeps you awake at night. Journalists Adrian Ladbury of Commercial Risk Europe and Nathan Skinner of Strategic Risk challenged the participants with questions about whether the soft market was turning, how they were going to help risk managers make their global programmes compliant and finally what did keep them awake at night.
Then it was time for the closing ceremony with thanks to all those who contributed, for a new President to take over and a farewell lunch in the magnificent surroundings of Stockholm City Hall.