Risk managers have made important contributions to the resilience of their organisations during the ongoing pandemic, according to a COVID-19 report by the Federation of European Risk Management Associations (FERMA).
The survey underlined the value of enterprise risk management (ERM) and the range of tools in the risk managers’ toolbox.
It showed that 74 percent of respondents had business continuity plans (BCP) in place, which helped to mitigate the impact of the COVID-19 crisis.
FERMA said BCPs and other measures help to explain why 90 percent of respondents said their organisations had been well or reasonably prepared to manage the pandemic, even though the pandemic was only on 31 percent of risk registers.
Respondents also suggested that insurance coverage during the crisis so far has not matched organisational needs.
Over half, 67 percent, of respondents said insurance did not provide their organisation with sufficient coverage from the business interruptions that resulted from this pandemic and subsequent government actions.
But FERMA noted that there is a demand for increased financial protection among the organisations surveyed.
Approximately 60 percent of respondents have either a reasonable or very great interest in a non-damage business interruption (NDBI) insurance product, according to the survey.
The report highlighted that those surveyed were in favour of EU intervention in this area.
The majority of risk managers said they would welcome an increased role by the EU in the management of a future pandemic or other large systemic events.
This could be driven by 72 percent of respondents’ views that EU-policy interventions during the crisis had ‘no impact’ on their organisations, FERMA said.
Based on the responses, FERMA outlined: “We need to build capacity to build resilience. We wish to see the EU encourage corporate risk and insurance managers to play a key role in promoting risk awareness for example, with their suppliers, which are often small and medium enterprises.”
Commenting on the report, FERMA president, Dirk Wegener said: “Most respondents felt their organisations were largely or fairly well prepared to manage the pandemic, although, at that stage, a majority said their organisations had suffered negative operational and financial impacts from the pandemic. We could not anticipate the full impact of government lockdowns and other control measures. When we have a longer perspective, we believe that we will see the value of flexible risk management tools, such as business continuity plans, in business resilience and recovery.”
He continued: “Insurance, unfortunately, has not provided the support organisations need for their business interruption. There is a strong appetite for a future financial solution. We have a long relationship with the insurance industry. We want it to be part of a solution by contributing not just risk transfer but also risk expertise to a combined public-private initiative.”
“While this survey is not — nor could it be — exhaustive in terms of content, it provides an important insight into the role of risk managers during the pandemic and lessons that will be incorporated into enterprise risk management for the future,” Wegener concluded.
The data in this report was collected from an anonymous web-based survey distributed through FERMA’s 22 member associations between 28 September and 21 October 2020.
Responses were received from 314 respondents in 21 countries. The countries with the highest number or responses were France, Italy, Sweden, Germany and Belgium.
