The second bi-annual conference of the Federation of European Risk Management Associations, which wrapped up proceedings on Wednesday in Rome, featured presenters and workshops that highlighted both the similarities and the differences in the U.S. and the European approach to risk management.
FERMA is an umbrella group composed of representatives of the risk management associations of the U.K., the Netherlands, Italy, Spain, France, Germany, Belgium, Switzerland and Denmark. President Thierry van Santen is the director of risk management for France’s Group Danone.
It’s highly unlikely that a RIMS conference would focus as much on “corporate social responsibility” (CSR) as FERMA did. Practically every presentation included it as a bona fide concern for risk managers to consider. It’s even more unlikely that RIMS would be addressed by French labor leader Nicole Notat, or by such an outspoken critic of the developed world’s domination of the earth’s resources at the expense of the world’s poor, 2.7 billion of whom live on $2.00 a day or less, as professor Riccardo Petrella of the Catholic University of Louvain. He bluntly rejected the idea that a market economy provides an ideal model for development, charging a somewhat subdued audience to look beyond profits if it wanted to address environmental, social and terrorist problems.
Having suffered heavily from the wars of the 20th century, Europeans seem to see the world in a different light than Americans – a world at once more dangerous in terms of risk, but at the same time better prepared to deal with them due to the existence of international institutions. Basically Europeans look more to national and international bodies to sort out problems than Americans do.
All the “usual suspects” were in attendance – the world’s five largest brokers plus Assurex, most of its leading insurers, and a number of the leaders in security, risk assessment, prevention and mitigation.
A central theme concerned the discrepancies between Europe’s approach to risk management and the U.S. Forum Chairman Roberto Bosco, the Group Risk Manager of Mediaset, noted that only about six percent of Italian companies even have risk managers. While the percentages are higher in other countries, notably the U.K. and the Netherlands, the number doesn’t come close to the 80 percent of U.S. companies that have risk management departments.
Nick Maher, Chairman of Aon’s Global Practice Group observed in a company press release that the more conservative attitude in Europe, which he attributed to “cultural differences,” was keeping many companies from considering “alternative, less conservative programme structures that may involve higher levels of self-insurance.”
Marsh presented a new study, the first of its kind, which surveyed 4300 different companies in a number of industries to determine which ones had the most coverage, their limits and their potential risk exposures. Unsurprisingly, the Marsh study also revealed the growing apprehension in Europe that the “compensation culture,” born in the U.S.A., seems to be spreading across the Atlantic. Although many European companies, who do business in the U.S., have long been aware of the legal minefield it represents, until now Europe had been seen as safe from multi-million dollar judgements, class actions and frivolous lawsuits. That may be changing.
In the final presentation of the Conference Lloyd’s CEO Nick Prettejohn made a similar point. He also made a strong, and by now familiar, pitch to the industry to try and stop, or at least mitigate the hard/soft market cycle that continually erodes profits and capital. He was one of the few speakers who did not address CSR issues, perhaps reflecting the fact that Lloyd’s focus is somewhat different than its counterparts in Europe.
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