PARIMA
PARIMA founder Franck Baron reflects on his 10-year tenure as the company’s chair, the organisation’s achievements and what he hopes his successor Annacel Natividad will bring to the table
How will you reflect on your 10 year-tenure as PARIMA chair?
It has been a very tiring but super-rewarding journey. I have always looked at the entrepreneurial part of being a risk manager. Therefore, dedicating my time and attention to business risks by creating, running and developing PARIMA has been like running a start-up.
It’s been a rollercoaster. It took us a while to work out how to make it happen in a very diverse region such as Asia. Gradually, we found the right people to support us, and the right risk professionals in various countries to help us make things happen.
Why do you feel the time is right to step down from your role?
By year six or seven, I felt like it was time for me to move on and make space for new leadership – after all, PARIMA is not a one-man show.
Unfortunately, the COVID-19 pandemic came along, and finding the right people to dedicate enough time and resources to run PARIMA, which is a demanding machine, was a struggle. It was important to have the right succession plan in place.
Therefore, it was necessary to determine who had the appetite and the bandwidth to take it on. I’m the founding chairman, but this has always been a team effort. Nonetheless, it is time for someone else to lead the association.
What motivated you to take on the role of PARIMA chair? What has been your greatest achievement?
I’ve always found it useful to be part of a community of risk professionals and when I moved to Asia, I found that the region didn’t have something like that in place. There were a few localised initiatives but there was no professional trade association. Given my experience in Europe and the US, I was asked to lead it. We needed it for the professional development of the region, as well as for ourselves.
I’m really proud that it’s now a sustainable organisation that is recognised and extremely active — gathering a superb selection of people within the permanent staff and among its board members.
There is a constant focus on making sure we can attract the right people to lead the organisation regionally and locally. We can see that the APAC house of risk management is full of very good people.
What challenges has PARIMA faced during your decade at the helm and how have you met them?
The first challenges were funding and structuring the organisation. We questioned at what point we would be able to hire people to manage these roles.
The main challenge was to align with the markets and the risk and insurance industries on the intent and purpose of PARIMA.
We have to work together. It took us a while to get people on board with the idea that it is not about having an exclusive partnership with one single sponsor or partner; it’s about bringing the market together.
We quickly realised it was important to listen and learn. I came with my experience in Europe and the US, and the maturity of the markets is very different there, so I had to adapt my pace to the way the Asia market works.
What have been the major changes in the Asian captive industry over the past 10 years, and what role has PARIMA played in those?
There are approximately 7000 captives around the world and, to my knowledge, less than 2 per cent of them are domiciled in Asia.
Captives are a great way to measure the sophistication of risk financing and the maturity of risk management.
We have a few domiciles across Asia and some of them are more mature than others. For a while, the number of captives were quite stagnant because the companies that were sophisticated and mature enough were the ones setting up the captive. This is what we did with International SOS 10 years ago.
We needed to convince others that this was a strategic risk financing tool. Over the last two to three years, the insurance cycle that we have been in has provided a wake up call, particularly when considering premium increases and restrictions in terms of capacity and coverage.
At PARIMA, every time we have an opportunity to address the captive point to members, we always remind them not to rush things; make sure that with your top management, there is a clear alignment about all the things you can do, and how you can leverage a captive. We are seeing momentum that has encouraged us to create a captives owners’ association in APAC.
Given the ever-increasing need for alternative risk management structures, how important is it for the region to have an organisation like PARIMA in place?PARIMA provides people with visibility on the capabilities of the market and the alternatives as well as parametric solutions, captives and the way you can manage your conversation with a chief financial officer.
Insurance across Asia is still at quite a basic standard. For a lot of people, insurance procurement is not that sophisticated and is still seen as a compliance exercise. However, we are moving to a higher degree of sophistication where the ability of insurance buyers has elevated the strategic aspect of risk financing within organisations.
There is still a lot to do but I can see maturity in Singapore. To an extent, it is also taking place in Malaysia, India, Philippines and Japan. It is already strong in Australia and New Zealand.
Looking ahead, what opportunities and emerging trends do you see in the field of risk management, and how can organisations effectively adapt to stay resilient in the face of uncertainty?
There are a few evolutions that need to happen and PARIMA will be very involved in them, but it is no different from what we have seen in Europe and the US. Firstly, how do we make sure that risk managers are stepping up to meet new or emerging risks?
With climate change, there is a role to be played by the risk manager: How can you influence your organisation to be better at developing sustainable initiatives?
We were the first association to globally develop a climate risk management school (in partnership with AXA Climate), which provides certification. We are now partnering with other associations to do the same.
It provides a fascinating example, because it’s the first time that PARIMA has initiated something that others are getting inspired by. We’re catching up with the other associations.
Climate change involves helping risk managers to cope with new risks and geopolitical uncertainties. The risks are not necessarily new but their impact is a very vivid and new concept. People-related risks and the health industry have become more important in the captive sphere post-pandemic. APAC risk managers will need to address those areas at the right level in the organisation.
As you prepare to pass on the torch, what are your hopes for the future of PARIMA and its role in shaping the risk management landscape in the years to come?
There are a few evolutions that are going to happen, but I’m not expecting any revolution. Thanks to Annacel Natividad, the newly elected president, who will take up her role at the start of 2024, there will be a new vision and energy. She’s going to build on what I have achieved.
It’s good to pass the baton and I think that it’s a reflection on the growing maturity of Asia that I’ll be succeeded by someone from the region. I’m expecting PARIMA to grow from strength to strength. We are in the process of creating legal structures for local chapters in the different countries. From there we will develop more localised capabilities.
We will make sure that our educational offering is solid and substantial. We signed a strategic partnership with RIMS, the US organisation, to distribute the risk management education and certifications that they have developed across Asia, with the prospect of adapting this to the APAC environment.
What message of advice do you have for your replacement, Annacel Natividad?
My only advice would be: please display the qualities you show in your organisation in your new role at PARIMA. Annacel is a fantastic leader and I’m pretty sure she’s going to bring PARIMA to the next level, which I’m thrilled about.
One more nugget of advice would be: be yourself. Annacel is a great risk professional and I have enjoyed working with her over the last seven years. She will be a great leader and by having her at its helm PARIMA will benefit greatly.
