ferma risk management benchmarking survey 2014 - european risk and insurance report

In collaboration with :

FERMA RISK MANAGEMENT BENCHMARKING SURVEY 2014

European Risk and Insurance Report

1


Presentation of the survey:

7th biennal benchmarking survey conducted by the Federation of European Risk Management Associations (FERMA) in collaboration with XL Group, Zurich, EY, Marsh and AXA Corporate Solutions.

2


Key Facts:

39 questions

February to June 2014

22 national associations members of FERMA

9 contacts list of risk managers from partners and 1

contact list : others (32 contact list in total)

850 Respondents

Based on FERMA standard

3


Content: Questionnaire

The survey was divided in 4 parts :

Introduction: from S0 to Q8

Benchmark the risk management practices in Europe

Provide a tangible basis for reporting to senior management

Track trends over time

Set up a tool to serve as basis of current relevant knowledge

To be the referenced survey developed by risk managers for risk managers in Europe

European insights on risk management practices: from Q9 to Q16

Reinforce the understanding of the positioning of the risk and insurance management role

Support the development of the risk and insurance management function

European perspective: from Q17 to Q29

Identify the main priorities at FERMA level to support members and risk and insurance management function

Insurance: Evolution of the Insurance Market and Risk Managers’ Expectations: from Q30 to Q39

Compare and position their organization’s insurance program against a organization group to support and improve decision making

4


Sample - Global

5

ASSOCIATION Complete Incomplete Total

respondents Total

invited

Complete Rate (Complete / Total

invited)

Target Rate (Complete /

Target)

Response Rate (Total respondents /

Total invited)

Target 2014

AGERS 19 10 29 50 38,0% 70,4% 58,0% 27

AIRMIC 79 84 163 1 058 7,5% 52,7% 15,4% 150

ALRIM 1 3 4 9 11,1% 16,7% 44,4% 6

AMRAE 81 73 154 610 13,3% 54,0% 25,2% 150

ANRA 36 15 51 110 32,7% 52,9% 46,4% 68

APOGERIS 8 5 13 50 16,0% 29,6% 26,0% 27

ASPAR 1 4 5 16 6,3% 10,0% 31,3% 10

BELRIM 32 24 56 93 34,4% 58,2% 60,2% 55

BFV-DVS 42 38 80 143 29,4% 52,5% 55,9% 80

DARIM 42 8 50 68 61,8% 100,0% 73,5% 42

ERMA 13 1 14 36 36,1% 65,0% 38,9% 20

FINNRIMA 21 16 37 95 22,1% 38,2% 38,9% 55

IGREA 11 5 16 33 33,3% 55,0% 48,5% 20

MARM 8 7 15 34 23,5% 40,0% 44,1% 20

NARIM 33 26 59 157 21,0% 41,3% 37,6% 80

NORIMA 11 7 18 48 22,9% 40,7% 37,5% 27

POLRISK 24 16 40 93 25,8% 51,1% 43,0% 47

RUSRISK 19 4 23 55 34,5% 70,4% 41,8% 27

SI.RISK 9 1 10 13 69,2% 112,5% 76,9% 8

SIRM 26 14 40 75 34,7% 57,8% 53,3% 45

SWERMA 43 29 72 186 23,1% 45,3% 38,7% 95

PARTNER

AXA Corporate Solutions- FR 10 17 27 146 6,8% 18,5% AXA Corporate Solutions- DE 22 43 65 182 12,1% 35,7% AXA Corporate Solutions-SP 6 4 10 25 24,0% 40,0% AXA Corporate Solutions-UK 8 19 27 193 4,1% 14,0% AXA Corporate Solutions-BE 12 13 25 70 17,1% 35,7% EY 0 1 1 1 0,0% 100,0% XL Group 3 2 5 8 37,5% 62,5% Zurich Insurance 0 0 0 N/A N/A N/A Marsh- Poland 0 2 2 200 0,0% 1,0% Marsh- Romania 7 22 29 200 3,5% 14,5% Others 5 3 8 11 45,5% 72,7% Total National Associations 559 390 949 3 032 18,4% 52,8% 31,3% 1 059 TOTAL 632 516 1 148 4 068 15,5% 28,2% 1 059

A respondent is considered complete if his status is complete for all the parts of the questionnaire.


Sample - Introduction

A respondent is considered complete for the introduction part if he/she has answered for all the questions of the introduction part.

6

ASSOCIATION Complete Incomplete Total respondents Total invited Complete Rate

(Complete / Total invited)

Response Rate (Total respondents / Total

invited)

AGERS 24 5 29 50 48,0% 58,0%

AIRMIC 127 36 163 1 058 12,0% 15,4%

ALRIM 2 2 4 9 22,2% 44,4%

AMRAE 116 38 154 610 19,0% 25,2%

ANRA 43 8 51 110 39,1% 46,4%

APOGERIS 9 4 13 50 18,0% 26,0%

ASPAR 2 3 5 16 12,5% 31,3%

BELRIM 43 13 56 93 46,2% 60,2%

BFV-DVS 57 23 80 143 39,9% 55,9%

DARIM 44 6 50 68 64,7% 73,5%

ERMA 14 0 14 36 38,9% 38,9%

FINNRIMA 23 14 37 95 24,2% 38,9%

IGREA 15 1 16 33 45,5% 48,5%

MARM 11 4 15 34 32,4% 44,1%

NARIM 45 14 59 157 28,7% 37,6%

NORIMA 12 6 18 48 25,0% 37,5%

POLRISK 29 11 40 93 31,2% 43,0%

RUSRISK 19 4 23 55 34,5% 41,8%

SI.RISK 10 0 10 13 76,9% 76,9%

SIRM 33 7 40 75 44,0% 53,3%

SWERMA 58 14 72 186 31,2% 38,7%

PARTNER

AXA Corporate Solutions- FR 14 13 27 146 9,6% 18,5%

AXA Corporate Solutions- DE 37 28 65 182 20,3% 35,7%

AXA Corporate Solutions-SP 8 2 10 25 32,0% 40,0%

AXA Corporate Solutions-UK 14 13 27 193 7,3% 14,0%

AXA Corporate Solutions-BE 17 8 25 70 24,3% 35,7%

EY 1 0 1 1 100,0% 100,0%

XL Group 4 1 5 8 50,0% 62,5%

Zurich Insurance 0 0 0 N/A N/A N/A Marsh- Poland 0 2 2 200 0,0% 1,0%

Marsh- Romania 12 17 29 200 6,0% 14,5%

Others 7 1 8 11 63,6% 72,7%

Total National Associations 736 213 949 3 032 24,3% 31,3%

TOTAL 850 298 1 148 4 068 20,9% 28,2%


Sample – 1st Part

A respondent is considered complete for the 1st part if he/she has answered for all the questions of the 1st part.

7




invited)

AGERS 21 8 29 50 42,0% 58,0%

AIRMIC 96 67 163 1 058 9,1% 15,4%

ALRIM 1 3 4 9 11,1% 44,4%

AMRAE 93 61 154 610 15,2% 25,2%

ANRA 38 13 51 110 34,5% 46,4%

APOGERIS 6 7 13 50 12,0% 26,0%

ASPAR 1 4 5 16 6,3% 31,3%

BELRIM 35 21 56 93 37,6% 60,2%

BFV-DVS 48 32 80 143 33,6% 55,9%

DARIM 41 9 50 68 60,3% 73,5%

ERMA 12 2 14 36 33,3% 38,9%

FINNRIMA 22 15 37 95 23,2% 38,9%

IGREA 13 3 16 33 39,4% 48,5%

MARM 7 8 15 34 20,6% 44,1%

NARIM 39 20 59 157 24,8% 37,6%

NORIMA 10 8 18 48 20,8% 37,5%

POLRISK 21 19 40 93 22,6% 43,0%

RUSRISK 13 10 23 55 23,6% 41,8%

SI.RISK 9 1 10 13 69,2% 76,9%

SIRM 30 10 40 75 40,0% 53,3%

SWERMA 49 23 72 186 26,3% 38,7%

PARTNER






EY 0 1 1 1 0,0% 100,0%

XL Group 3 2 5 8 37,5% 62,5%


Marsh- Romania 7 22 29 200 3,5% 14,5%

Others 7 1 8 11 63,6% 72,7%


TOTAL 681 467 1 148 4 068 16,7% 28,2%


Sample – 2nd Part

A respondent is considered complete for the 2nd part if he/she has answered for all the questions of the 2nd part.

8




invited)

AGERS 9 20 29 50 18,0% 58,0%

AIRMIC 39 124 163 1 058 3,7% 15,4%

ALRIM 0 4 4 9 0,0% 44,4%

AMRAE 55 99 154 610 9,0% 25,2%

ANRA 14 37 51 110 12,7% 46,4%

APOGERIS 3 10 13 50 6,0% 26,0%

ASPAR 0 5 5 16 0,0% 31,3%

BELRIM 17 39 56 93 18,3% 60,2%

BFV-DVS 12 68 80 143 8,4% 55,9%

DARIM 23 27 50 68 33,8% 73,5%

ERMA 11 3 14 36 30,6% 38,9%

FINNRIMA 15 22 37 95 15,8% 38,9%

IGREA 6 10 16 33 18,2% 48,5%

MARM 6 9 15 34 17,6% 44,1%

NARIM 13 46 59 157 8,3% 37,6%

NORIMA 1 17 18 48 2,1% 37,5%

POLRISK 15 25 40 93 16,1% 43,0%

RUSRISK 7 16 23 55 12,7% 41,8%

SI.RISK 7 3 10 13 53,8% 76,9%

SIRM 16 24 40 75 21,3% 53,3%

SWERMA 16 56 72 186 8,6% 38,7%

PARTNER






EY 0 1 1 1 0,0% 100,0%

XL Group 3 2 5 8 37,5% 62,5%


Marsh- Romania 2 27 29 200 1,0% 14,5%

Others 4 4 8 11 36,4% 72,7%


TOTAL 315 833 1 148 4 068 7,7% 28,2%


Sample – 3rd Part

A respondent is considered complete for the 3rd part if he/she has answered for all the questions of the 3nd part.

9




invited)

AGERS 11 18 29 50 22,0% 58,0%

AIRMIC 61 102 163 1 058 5,8% 15,4%

ALRIM 0 4 4 9 0,0% 44,4%

AMRAE 48 106 154 610 7,9% 25,2%

ANRA 25 26 51 110 22,7% 46,4%

APOGERIS 3 10 13 50 6,0% 26,0%

ASPAR 1 4 5 16 6,3% 31,3%

BELRIM 26 30 56 93 28,0% 60,2%

BFV-DVS 37 43 80 143 25,9% 55,9%

DARIM 24 26 50 68 35,3% 73,5%

ERMA 6 8 14 36 16,7% 38,9%

FINNRIMA 11 26 37 95 11,6% 38,9%

IGREA 9 7 16 33 27,3% 48,5%

MARM 5 10 15 34 14,7% 44,1%

NARIM 32 27 59 157 20,4% 37,6%

NORIMA 6 12 18 48 12,5% 37,5%

POLRISK 9 31 40 93 9,7% 43,0%

RUSRISK 5 18 23 55 9,1% 41,8%

SI.RISK 5 5 10 13 38,5% 76,9%

SIRM 25 15 40 75 33,3% 53,3%

SWERMA 28 44 72 186 15,1% 38,7%

PARTNER






EY 0 1 1 1 0,0% 100,0%

XL Group 3 2 5 8 37,5% 62,5%


Marsh- Romania 2 27 29 200 1,0% 14,5%

Others 3 5 8 11 27,3% 72,7%


TOTAL 430 718 1 148 4 068 10,6% 28,2%


Sample

850 681

315 430

174 343

709 594

1024 1024 1024 1024

Introduction European insights on riskmanagement practices

European perspective Evolution of the Insurance Market and Risk Managers’

Expectations

Total number of respondents for each part (complete + incomplete)

Complete Incomplete

10


Introduction

850

681

315

430

Introduction European insights onrisk management

practices

European perspective Evolution of the Insurance Market and

Risk Managers’ Expectations

Number of complete respondents

11


Sample

A representative sample of European companies

Female 27%

Male 73%

S1: Are you?

Basis: 850

0,1%

3,4%

7,2%

31,3%

37,8%

12,9%

7,3%

Less than 25 years old

Between 25 and 30 yearsold





60+ years old

S2 - What is your age ?

12


Sample

A representative sample of European companies Basis: 850

18%

17%

18%

12%

15%

11%

9%

Less than €60

Between €60 - €80

Between €81 - €100

Between €101 - €120

Between €121 - €150

Between €151 - €200

More than €200

S3 - What is your total annual remuneration (including bonus and all compensations) (in thousands €) ?

13


Sample


Manufacturing 18%

Energy / utilities 15%

Technology and Telecoms 8%

Transportation / logistics 8% Banking and

Financial Services 7%

Public sector and non-profit

5%

Insurance 5%

Professional and Business

Services 5%

Retail 5%

Automotive 4%

Food and Beverages 4%

Pharmaceuticals and Life Sciences

3%

Other 13%

Q1: Respondents by industry

Basis: 850

14

Other 106 12,47%

Consumer Goods 25 2,94%

Government Contracting

24 2,82%

Real Estate 20 2,35%

Mining 15 1,76%

Healthcare 8 0,94%

Sports, Media and Entertainment

8 0,94%

Hospitality and Leisure

6 0,71%


Sample


3%

9%

11%

9%

30%

38%

No opinion / Don't know

Less than €100 million

Between €100 million and less than €500 million

Between €500 million and less than €1 billion

Between €1 billion and €5 billion

More than €5 billion

1%

16%

22%

11%

13%

37%


Less than 1000

Between 1000 and 5,000

Between 5,001 and 10,000

Between 10,001 and 20,000

More than 20,000

Q2.2 - Organization’s total number of employees:

Q2.1 - Organization’s turnover:

Basis: 850

15


Sample


31,2%

6,8%

15,2%

11,9%

10,4%

4,5%

6,4%

8,6%

5,2%


Negative

Between 0 and 2.5%

Between 2.6 and 4%

Between 4.1 and 6.5%

Between 6.6 and 7.5%

Between 7.6 and 10%

Between 10.1% and 20%

More than 20%

Q2.3 - Organization’s average EBITDA growth rate for the period between 2009 and 2012

Basis: 850

16


Sample


0,1%

0,4%

0,4%

1,8%

2,5%

94,9%

Latin America

Africa

Middle East

Asia / Pacific

North America

Europe

0,0%

0,2%

0,4%

0,4%

0,5%

98,6%

Latin America

Middle East

Africa

North America

Asia / Pacific

Europe

Q3.2 - Where are you located ? Q3.1 - Where are your organization’s headquarters ?

Basis: 850

17


Sample


0,0%

0,1%

0,2%

0,2%

0,2%

0,4%

0,5%

6,5%

6,7%

85,2%

Don't know

Invalid

Production/production site

Insurance services

Central services

Financial services

Other

National/ Country Organization

Division OR Regional Organization

Corporate (Head Office)

Q3.3 - Which part of the organization do you work in ?

Basis: 850

18


Sample


Q4 - Is your organization listed on the stock market ?

Yes 51%

No 48%


1%

Basis: 850

19


Sample

A representative sample of European companies Q5.3 - My organization is a member of one of the following Risk Management associations : (Multiple Answer)

0% 0%

0% 0% 0% 0%

1% 1% 1%

1% 1% 2% 2%

2% 2% 3%

3% 4%

4% 5%

5% 5%

6% 7% 7%

7% 14%

16% 16%

Don't know

Invalid

IRM

PARIMA

ASPAR CZ, Czech Republic

ALRIM, Luxembourg

Other

APOGERIS, Portugal

SI.RISK, Slovenia

MARM, Malta

ERMA, Turkey

NORIMA, Norway

RUSRISK, Russia

FINNRIMA, Finland

IGREA, Spain

POLRISK, Poland

AGERS, Spain

RIMS, United States

ANRA, Italy

SIRM, Switzerland

BFV, Germany

DARIM, Denmark

BELRIM, Belgium

SWERMA, Sweden

DVS, Germany

NARIM, Netherlands

None

AIRMIC, UK

AMRAE, France

Basis: 850

20


Sample: Respondents


0,0% 0,0% 0,1% 0,1% 0,1% 0,2% 0,2% 0,4% 0,5% 0,5% 0,5% 0,5% 0,7% 0,7% 0,9% 1,1% 1,6% 1,8% 2,4% 2,5% 2,9% 3,3% 4,2% 5,2%

12,5% 58,1%

Security Manager

Don't know

Fraud Control

Corporate Development Manager

Invalid

Claims Manager

Procurement Manager

University teacher

Chief Operating Officer

Manager (health and safety manager)

Head of Compliance / Compliance…

Consultant

President, Chairman

General / Company Secretary

Captive manager

Business Continuity Manager

Chief Financial Officer / Finance…

Head of Treasury / Treasury manager

Legal Counsel / Head of Legal…

Head of Internal Audit / Audit Manager

Chief Executive Officer / Managing…

Other

Risk Manager/officer/advisor

Insurance Manager

Chief Risk Officer /Head of Risk

Risk and Insurance manager

Q5.bis - What is your position in your team ?

Q5.1 - Respondent primary position

Team leader 77%

Team member

23%

Basis: 850

21


Sample: Respondents


Q5.2 - Where is your specific qualification in Risk Management or Insurance from ? (Multiple Answer)

Q5.1ter - Do you have a specific qualification in Risk or Insurance Management ?

Yes 56%

No 44%

0,0% 0,0% 0,2% 0,2% 0,2% 0,2% 0,4% 0,6% 0,6% 0,6% 1,0% 1,0% 1,0% 1,5% 1,7% 1,9% 3,1% 3,8%

6,0% 9,0%

25,2% 30,8%

35,6%

French National School of Insurance…

Don't know

BCI

Banking industry

CRISC

CIA

IVASS

CRMA

CINEAS

Invalid

Broker/Broker Education

FCI/FCII

Nibe SVV

Specialist courses

Qualification as insurance…

Institute of Internal Auditors (IIA)

Industry/on the job experience

Institute of Risk Management (IRM)

Chartered Insurance Institute (CII, ACII)

Other

Business School

A national risk management…

University

Basis: 480 Basis: 850

22

Yes on Q5.1ter only


Sample: Respondents


Q5.5 - What job(s) did you do before your current role ? (Multiple Answer)

Q5.4 - How long have you been in this role ?

Less than 3 years

25%

Between 3 and 10

years 49%

More than 10

years 26%

0,0% 0,0% 0,2% 0,2% 0,2% 0,2% 0,2% 0,2% 0,2% 0,2% 0,2% 0,2% 0,3% 0,3% 0,3% 0,5% 0,7% 0,9% 1,2% 1,4% 1,9% 2,1% 2,1% 2,3% 2,4% 4,0% 4,5% 5,9% 6,1%

68,1%

Commercial

Security Officer

Acquisitions

Economist

Energy

Human ressources

Marketing

Pensions

Politics

Risk consulting

Statistician

Tax

Business analyst

Customer Relations

IT

Strategy

Security management

Controlling

Quality / Project Management

Treasury

Finance

Insurance / Broker / Banking

Legal consoulting

This is the first job in my career

Internal control

Audit

Manager

Other

Operational, (e.g. Logistics, engineering, manufacturing,…

Risk management /insurance /claims related roles

Basis: 574

23

Basis: 574 Filter on Q5.1


Sample: Respondents


Q5.5 - Operational, (e.g. Logistics, engineering, manufacturing, etc.) DETAILS

21% 18%

12% 12% 9%

6% 3% 3% 3% 3% 3% 3% 3% 3%

0% 0%

Basis: 35

24


Sample: Respondents


Q5.5.1 - Overall, how many years have you worked in the risk management / insurance area ?

1%

13%

43% 43%

Less than 3years

Between 3 and9 years

Between 10and 20 years

More than 20years

Basis: 391

25

Filter on Q5.5


Risk Management Function

Q6.1 - Full time equivalent people working for Risk Management or Insurance as part of the Risk Management Function

7%

11%

46%

33%

16% 15% 13% 13%

8% 8% 9%

18%

1% 2%

headquarters regional and / or national

No staff

1 to 3

4 to 5

6 to 10

11 to 20

More than 20

No opinion/ Don't know


26

Filter on Q3.3



Q6.2 - In total, how many people in your organization that work outside the Risk Management participate in risk / insurance management in close

coordination with the Risk Management function or have risk management / insurance specified in their job profile

12,8%

29,9%

25,9%

15,1%

9,6%

6,7%

risk / insurance management participation

No staff

1 to 5 people

6 to 20 people

21 to 80 people

Over 80 people

No opinion/ Don't know

Basis: 850

27



Don’t know 9%

Yes 39% No 52% 33,4%

39,2%

61,4%

41,3%

5,1%

19,6%

Traditional Lines ofCover

Non-traditional Lines ofCover

More importantIdenticalLess important

Q7.1 - Involvement of the captive in over the next 2 years

Q7 - Does your organization use (own or rent) a captive ?

Basis: 850

Basis: 332

28

Yes on Q7 only



Don’t know 9%

Yes 39% No 52%

Q7.2 - Strategy in regards to risks which are difficult to

place on the insurance market

Q7 Does your organization use (own or rent) a captive ?

7%

21%

42%

30%

Create a captive insurance/ re-insurance company

Use alternative risk transfervehicles

Risk retention

No opinion/Don't know


29

No on Q7 only



Q8.1 - Are you able to indicate your organizations or group’s Cost of Risk in 2013 (in Euros) for each of the following activities?

72%

35% 43%

63% 52% 46% 44%

29%

28%

65% 57%

37% 48% 54% 56%

71%

General lines Health andBenefits

Retained losses Broker fees Claimsadministration

feesRiskconsultancy

Riskmanagementand insurancesystems and

software

Other expenses Captive annualadministration

cost

NO

YES

Basis: 850

30



Q8.3 - Could you please indicate your best estimate of the total cost of risk in 2013 (in Euros)?

17,7% 16,0%

14,0% 13,0%

6,3% 6,0% 4,2% 3,7% 3,3% 2,8% 2,1% 1,6% 1,6% 1,4% 1,4% 1,4% 1,2% 0,9% 0,7% 0,7% 0,0% 0,0% 0,0%

Basis: 430

31



Part 1 :European insights on

risk management practices

850

681

315

430


practices



Number of respondents

32


Risk Management/Insurance

report

7,0%

6,6%

3,1%

5,0%

2,1%

7,3%

3,5%

3,1%

1,6%

22,2%

16,7%

17,9%

3,8%

0,9%

6,6%

4,4%

10,6%

1,2%

10,7%

4,0%

3,8%

2,1%

31,3%

11,7%

11,9%

0,9%

Risk Committee

Other


Head of Treasury

Head of Internal Audit

General Counsel

General

Chief Risk Officer


Chief Financial Officer

Chief Executive Officer

Board of Directors

Audit Committee

Insurance

Risk Management

Q9ALL - To whom does your organization’s Head of Risk Management / Insurance report?

Basis: 681

33



report

0,0% 0,1% 0,1% 0,1%

0,1% 0,1% 0,1% 0,1% 0,3% 0,3% 0,3% 0,4% 0,4% 0,4% 0,6% 0,9%

1,6% 2,3%

3,1% 3,5% 3,5% 3,8%

5,0% 7,3% 7,6%

17,0% 18,1%

23,9%

VP in Business Development

Group Controller/Head of Control

Commercial Assurance Director

Shared Services Director

VP Financial Compliance

General partner

Vice President

Invalid

Corporate Affairs Director

Chief Controlling Officer

HR director

No single reporting line

Procurement manager

Other

Head of finance

Director general for administration



Don't know


Chief Risk Officer/Head of Operation Risk

Audit Committee

Head of Treasury

Risk Committee/Group risk management

General Counsel / Head of Legal Department

Chief Executive Officer / Managing Director

Board of Directors / Supervisory Board/Corporate Governance

Chief Financial Officer/Group Financial Controller (CFO)

Q9A - To whom does your organization’s Head of Risk Management ?

Basis: 681

34



report

0,0% 0,0% 0,0% 0,1%

0,1% 0,1% 0,1% 0,1% 0,1% 0,1% 0,3% 0,3% 0,3% 0,4% 0,6% 0,9% 0,9% 1,2% 1,5%

2,1% 4,0% 4,1%

10,6% 11,0% 11,0%

12,0% 12,0%

32,7%

VP in Business Development

Vice President

Invalid

Group Controller/Head of Control

Commercial Assurance Director

Shared Services Director

VP Financial Compliance

General partner

Procurement manager

HR director

Corporate Affairs Director

Chief Controlling Officer

Director general for administration

No single reporting line

Head of finance

Audit Committee

Other

Risk Committee/Group risk management




Chief Risk Officer/Head of Operation Risk

Head of Treasury

General Counsel / Head of Legal Department

Don't know

Board of Directors / Supervisory Board/Corporate Governance

Chief Executive Officer / Managing Director

Chief Financial Officer/Group Financial Controller (CFO)

Q9B - To whom does your organization’s Head of Insurance report?

Basis: 681

35


Risk management/insurance

leader responsibility

32%

47%

54%

63%

69%

73%

75%

76%

84%

90%

Analysis of capital projects and delivering business plans

Definition of compliance policy

Design and implementation of risk financing strategy andassociation solutions

Development and embedding of Business Continuity Management /Emergency Management / Crisis Management / Incident response…

Alignment and integration of risk management as part of businessstrategy

Development and implementation of Risk Culture across theorganization

Design and implementation of risk controls/prevention

Assistance to other functional areas in contract negotiation, projectmanagement, acquisitions and investments

Development of map of risks: risk identification, analysis,evaluation, prioritization and reporting

Insurance management and claims handling / insurable lossprevention

Q10A - In your organization, which of the following activities are the responsibility of the risk management or insurance leader – and are they already embedded or planned?

RM’s or IM’s Responsibility - Yes

Basis: 681

36



leader responsibility Q10B - In your organization, which of the following activities are the responsibility of the risk management or insurance leader – and are they already embedded or planned?

73,4%

56,5%

68,7%

86,9%

68,0%

34,2%

46,4%

55,2%

51,5%

47,3%

13,7%

19,5%

8,5%

4,0%

13,4%

9,1%

9,8%

20,1%

24,8%

14,7%

7,5%

14,1%

12,9%

3,7%

9,0%

31,3%

23,2%

14,2%

13,5%

20,0%

5,4%

9,8%

9,8%

5,4%

9,7%

25,4%

20,6%

10,4%

10,1%

18,1%

Development of map of risks: risk identification, analysis, evaluation,prioritization and reporting

Alignment and integration of risk management as part of business strategy

Assistance to other functional areas in contract negotiation, projectmanagement, acquisitions and investments

Insurance management and claims handling / insurable loss prevention

Design and implementation of risk controls/prevention

Analysis of capital projects and delivering business plans

Design and implementation of risk financing strategy and associationsolutions

Development and implementation of Risk Culture across the organization

Development and embedding of Business Management

Definition of compliance policy

Embedded Planned for 2014/15 Not planned No opinion

Basis: 681

37



leader interactions Q11 - How does your organization’s risk manager interact with the board of directors and/or top management ?

Formally presents to the board of

directors and top management

several times per year

45%

Formally presents to the board of

directors and top management once a year

18%

Meets board and/or top

management members on a

requested basis

23%

There is no mechanism in

place to formally report about risk

management

9%


5%

Basis: 681

38



leader interactions

Q12.1 - Please tell us the relation of your organization’s risk management / insurance function with other areas / issues. (1/6)

No relationship

43,3%

Regular, close collaboration

34,7%

Risk mgr's own responsibility

9%

Not applicable 13,2%

Strategic planning business

No relationship

19,4%


57,4%

Risk mgr's own responsibility

14,4%

Not applicable 8,8%

Ethics / Compliance / Legal

Basis: 681

39



leader interactions


No relationship

39,9%

Regular, close

collaboration 33,8%

Risk mgr's own

responsibility 12,0%

Not applicable

14,2%

Corporate Social Responsibility Sustainability

No relationship

11,5%

Regular, close

collaboration 52,0%

Risk mgr's own


Not applicable

8,4%

Business Continuity / Crisis Management

Basis: 681

40



leader interactions


No relationship

19,5%


55,1%

Risk mgr's own


Not applicable 9,1%

Internal Control / Internal Audit

No relationship

41,4%


36,1%

Risk mgr's own

responsibility 9,4%

Not applicable 13,1%

IT- for major projects

Basis: 681

41



leader interactions


No relationship

36,4%

Regular, close

collaboration 40,4%

Risk mgr's own

responsibility 8,8%

Not applicable

14,4%

Investments and investors relations

No relationship

23,9%

Regular, close

collaboration 52,0%

Risk mgr's own

responsibility 9,0%

Not applicable

15,1%

Mergers & Acquisitions – for acquisitions / transfers decisions

Basis: 681

42



leader interactions


No relationship

33,2%

Regular, close

collaboration 44,8%

Risk mgr's own


Not applicable

11,3%

Sourcing / Procurementted

No relationship

26,0%

Regular, close

collaboration 48,5%

Risk mgr's own

responsibility 7,8%

Not applicable

17,8%

Manufacturing / Logistics / Distribution / Quality

Basis: 681

43



leader interactions


No relationship

5,0%


32,9%

Risk mgr's own


Not applicable

4,7%

Insurance Managementted

No relationship

39,1%


38,3%

Risk mgr's own

responsibility 7,9%

Not applicable

14,7%

HR - Employee Benefitsted

Basis: 681

44



organization

Q13 - Which of the following potential organization forms most closely describes that of your company ?

7%

23%

40%

7% 8%

15%

all functionstogether in a

singledepartment

all functionsseparate in

four differentdepartments

Risk andInsurance

Managementtogether

RiskManagementand Internal

Controltogether

Internal Auditseparate

InsuranceManagement

separate

Basis: 681

45



organization

Q14 - To what extent does your organization prioritize risks by mapping them ?

20,4%

51,8%

5,3% 9,4% 7,9% 5,1%

On a globalcorporate levelonly (strategic,financial andoperational)

Fromcorporate level

down todivisions andbusiness units

Only forcertain

business units

Only forcertain

categories ofrisks

No suchapproach hasbeen put in

place yet

No opinion /Don't know

Basis: 681

46



organization Q15 - For which of the areas below does your organization provide training on a regular basis ? (Multiple Answer)

0,0% 0,0% 0,0% 0,0% 0,1% 0,1% 0,1% 0,1% 0,3% 0,3% 0,6% 0,6% 1,5%

19,2% 21,0% 27,8%

44,2%

57,1%

Basis: 681

47



organization

Q16 - Do you use IT / GRC (Governance, Risk and Compliance) tools to manage the following Risk Management / insurance activities? (YES)

47%

46%

43%

27%

46%

52%

47%

Risk mapping

Risk registers

Risk quantification

Risk appetite and tolerance

Claims analysis

Risk reporting / Risk dashboards

Monitoring of risk mitigation actions / controls

Basis: 681

48


Part 2: European perspective

850

681

315 430


practices




49


Top 10 risks and level of

mitigation

39%

39%

41%

45%

46%

47%

50%

51%

52%

59%

Debt, cash flow

Quality (design, safety & liability of products &services)

Human resources / key people, social security(labour)

Planning and execution of strategy

Market strategy, clients

Economic

Competition

Regulation and legislation

Reputation and brand

Political - Government intervention, legal andregulatory changes

Q17 - What are the top ten risks that keep your CEO awake at night? (Multiple Answer, list of 33 items)

Basis: 315

50



mitigation

47,2%

50,0%

26,4%

38,0%

31,5%

24,2%

24,8%

31,7%

42,3%

27,6%

37,4%

39,5%

53,5%

45,1%

47,3%

51,0%

53,5%

47,8%

47,2%

37,8%

15,4%

10,5%

20,2%

16,9%

21,2%

24,8%

21,7%

20,5%

10,4%

34,6%

Debt, cash flow

Quality (design, safety & liability of products &…

Human resources / key people, social security…



Economic

Competition



Political - Government intervention, legal and…

High Mid Low

Basis: 185

Basis: 163

Basis: 161

Basis: 157

Basis: 149

Basis: 146

Basis: 142

Basis: 129

Basis: 124

Basis: 123

Q19.1 - Please assess the current level of mitigation for the areas risks you have previously identified: Mitigation level

51



mitigation

56,9%

71,0%

58,9%

55,6%

57,5%

36,2%

41,4%

39,1%

66,3%

27,0%

13,8%

15,3%

13,2%

4,2%

6,8%

10,1%

3,8%

4,3%

4,9%

8,6%

29,3%

13,7%

27,9%

40,1%

35,6%

53,7%

54,8%

56,5%

28,8%

64,3%

Debt, cash flow





Economic

Competition




Reduction Transfer Accepted

Q19.2 - Please assess the current level of mitigation for the areas risks you have previously identified: Mitigation strategy

Basis: 185

Basis: 163

Basis: 161

Basis: 157

Basis: 149

Basis: 146

Basis: 142

Basis: 129

Basis: 124

Basis: 123

52



mitigation

41,0%

46,0%

21,0%

29,0%

19,0%

17,0%

15,0%

20,0%

37,0%

16,0%

41,0%

44,0%

56,0%

54,0%

63,0%

62,0%

65,0%

55,0%

49,0%

54,0%

18,0%

10,0%

23,0%

17,0%

18,0%

21,0%

20,0%

25,0%

14,0%

30,0%

Debt, cash flow





Economic

Competition




High Low Mid

Basis: 185

Basis: 163

Basis: 161

Basis: 157

Basis: 149

Basis: 146

Basis: 142

Basis: 129

Basis: 124

Basis: 123

Q19.3 - Please assess the current level of mitigation for the areas risks you have previously identified: Satisfaction level

53


FERMA priorities at EU level

Q20 - Among the following current regulatory matters, what should be the first 3 priorities for FERMA at EU level?

24%

26%

27%

29%

34%

38%

38%

38%

45%

Insurance Contract Law Expert Organization

Collective Redress in the European Union

Network & Information Security (NIS) Directive

Insurance Premium Tax (IPT)

The European Insurance Mediation Directive(IMD 2)

The possibility of an EU-wide mandatoryfinancial security

Solvency 2 and the captive treatment

Annual reporting and transparency

Data Protection Regulation

Basis: 295

54

Optional for non-EU organisations



The possibility of an EU-wide mandatory financial security(bonds, letter of credit, provisions...) or an insurance scheme to cover some industrial incidents: 38%

61,6%

33,0% 42,9%

53,6%

23,2%

36,6% 29,5%

28,6%

15,2% 30,4% 27,7%

17,9%

Environmentalliabilities

Terrorism Data breach orinformation systems

incident

Natural catastrophes

YES NO No opinion / Don't know

Q21.1 - Do you think a mandatory financial security or an insurance scheme at EU level would help mitigate the consequences of the following types of risk in your country?

Basis: 112

55



Solvency 2 and the captive treatment: definition, proportionality and simplified rules and calculations for eligible captives 38%

Q22.1 - Do you anticipate rising costs in the use of a captive because of the future Solvency 2 rules ?

YES 88%

NO 12%

Basis: 113

56




Q22.2 - Do you believe this will eventually restrict the choice available to companies to transfer the risks to their captives ?

YES 75%

NO 25%

Basis: 113

57




Q22.3 - Do you believe this will eventually increase the need for traditional insurance capacities ? YES 57%

NO 43%

Basis: 113

58




Q22.4 - Do you think Solvency 2 will favor the risks mitigation policies in companies, in interesting the management to reduce its expected losses ?

YES 55%

NO 45%

Basis: 113

59




Q22.5 - In your opinion, how will Solvency 2 change the interest in creating a captive ?

Increased 9,7%

Decreased 64,6%

Same 25,7%

Basis: 113

60



The European Insurance Mediation Directive (IMD 2) and the level of protection for the diversity of professional insurance buyers 34%

Q23 - Which level of consumer protection would be the most adequate?

48%

23%

15% 14%

Full mandatorydisclosure on

remunerationsand fees

On requestdisclosure on

remunerationsand fees

On requestdisclosure on

remunerationsand fees based on

the size of theclients

Voluntarydisclosure

Basis: 100

61



Collective Redress in the European Union 28%

Q24.1 - Did your company have to face litigation as a consequence of the national collective redress regulation?

YES 7%

NO 93%

Basis: 76

62



Q24.2 - In your opinion, what are the most likely impacts of a collective redress regulation on business activities? (Multiple Answer)

37%

50%

16% 20%

26%

Increasedpremiums on

productliability

coverage

Increasedlegal costs

Reduced riskappetite forinnovations

Increased useof Alternative

DisputeResolutions(mediation,

arbitration...)

Noopinion/Don't

know

Collective Redress in the European Union 28%

Basis: 76

63



Q25.1 - In your opinion, which one of the new features of the Data Protection Regulation would have the strongest impact on your organization ?

33% 27%

18% 13%

9%

Possiblesanctions forbreaching the

Regulation up to1,000,000 eurosor 2% worldwide

turnover

Appropriatedocumentation

for all dataprocessing

activities andavailable on

request to theregulator

Mandatory databreach

notification tothe regulator

Cross-borderbusinesses willhave to choose

only oneregulatory

authority thatsupervises

activities acrossall EU membe

Theappointment of

a DataProtectionOfficer for

companies over250 employees

Data Protection Regulation 45%

Basis: 133

64



Annual reporting and transparency 38%

Q26.1 - Do you play an active role in providing input in the 'annual report' process, in particular about the risk section ?

YES 73%

NO 27%

Basis: 113

65



Annual reporting and transparency 38%

Q26.2 - In your opinion, how would a country by country reporting on profits made, taxes paid on profits and public subsidies received impact your organization ?

23%

49%

28%

Global competitiveness issue

Confidentiality issue regarding strategy

Business model and cross-border synergies

Basis: 113

66



Insurance Contract Law Expert organization 24%

Q27.1 - Do you believe a harmonization of insurance contract law in the European Union is needed ?

YES 87%

NO 13%

Basis: 71

67



Insurance Contract Law Expert organization 24%

Q27.2 - Do you think it will be an incentive to buy insurance products in other European countries ?

YES 85%

NO 15%

Basis: 71

68



Network & Information Security (NIS) Directive 27%

Q28.1 - Do you believe the reporting of NIS event... ?

42%

46%

12%

Increases the level of cybersecurity and should be extended to othersectors than just critical infrastructures

Increases the level of cybersecurity but should remain only for criticalinfrastructures

Does not bring any added value in terms of cybersecurity

Basis: 81

69



Insurance Premium Tax (IPT) 29%

Q29.1 - In your opinion, are the different IPT rates a barrier for insurers to provide organization-wide coverage ?

YES 49% NO 51%

Basis: 86

70




Q29.2 - Are you aware of how much IPT is being charged and in what countries in respect of your insurance risks? Are you satisfied this is the right amount ?

YES 52% NO 48%

Basis: 86

71




Q29.3 - Have you ever faced difficulties regarding the settlement of IPT for your company, regarding the localization of the risk (HQ / operational site) ?

YES 52% NO 48%

Basis: 86

72


Part 3: Insurance: Evolution

of the Insurance Market and


850

681

315

430


practices




73


Changes of Insurance

Program

2%

6%

7%

24%

28%

30%

34%

43%

50%

No opinion / don't know

Purchase of credit insurance

None

Acceleration of claims settlement process

Selection of more financially robust insurers

Implementation or further use of captive facilities

Insurance buying pattern

Strengthen loss prevention activity

Negotiate long-term agreement or roll-over

Q30 - Which of the following changes to your insurance program will you consider as a result of the current financial and economic climate ? (Multiple Answer)

Basis: 430

74


Changes of Insurance

Program Q30.1 - Could you please define for each item below if it increases/decreases or stay identical?

55,2% 40,0%

52,4%

8,3%

16,6% 4,1%

36,6% 43,4% 43,4%

Retention level Purchased limit Lines of cover

Identical

Decrease

Increase

Insurance buying pattern: 34%

Basis: 145

75


Types of insurance

Q31 - What overall limit does your organization benefit from per annual aggregate, independent of sublimits, for the following types of insurance?

23,7%

21,4%

39,1%

40,7%

43,5%

19,3%

27,0%

24,4%

28,8%

13,3%

17,2%

5,1%

24,4%

22,1%

21,9%

4,9%

11,9%

2,3%

22,6%

21,4%

7,2%

4,7%

7,4%

1,4%

2,3%

10,7%

3,0%

36,5%

20,0%

71,9%

Public Liability

Product Liability

Directors' & Officers' Liability

Gradual Environmental impairment Liability

Errors & Omissions / Professional Liability

Cyber risk coverage

<50M EUR 50 – 100M EUR 101 –300M EUR >300M EUR No coverage

Basis: 430

76


Types of insurance

Q32 - How do you select your purchased limit per types of insurance ? (Multiple Answer)

77%

57%

45%

27% 20%

15%

3% 1% 1% 0% 0% 0%

Basis: 430

77


Types of insurance

Q33 - In your opinion, what is commonly the most efficient international insurance program for the following risks?

17% 10% 24%

3% 11% 15% 3% 9% 10% 5%

19%

11%

13%

15% 20% 19%

18%

35% 34% 40%

35%

11%

49%

8%

31% 35%

8%

40% 40% 42% 9%

14%

4%

43%

9% 6%

55%

2% 7% 4% 20%

54%

10% 31% 29% 25%

16% 14% 9% 9% No opinion / don't know

Local standalone policiesonly

Master policy & local policieslimited to selected countries

Master policy and localpolicies in each countrywhere the insured is present

Master policy only, grantingcoverage on a non-admittedbasis for internationaloperations

Basis: 430

78


Types of insurance

Q34 - What is your main reason for implementing local standalone policies in certain countries ?

4,2% 10,7% 11,6%

1,4% 2,6%

63,0%

6,5% 0,5%

Costimplications

Serviceproximity (of

insurers,brokers, andthird parties)

Local riskprofile

Political andeconomicalbackground

of thecountry

Pressure oflocal entityto remainout of theprogram

Complianceto local

regulation

Other No opinion /don't know

Basis: 430

79


Types of insurance

Q35 - With the exception of BRIC countries, please list the top the 1 or 2 countries in which you would like to see improvements in the local insurance offering

19%

11% 10% 10% 9%

8%

6% 6% 4% 4% 4% 4% 4% 4% 3% 3% 3% 3% 3% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 1% 1% 1% 1% 1%

Oth

er

Bra

zil

Mal

aysi

a

Arg

en

tin

a

USA

Me

xico

Fran

ce

Ch

ina

Ru

ssia

Nig

eri

a

Ital

y

Ind

ia

Turk

ey

Jap

an

Alg

eria

Afr

ica(

n)

con

tin

ent

The

UA

E (U

nit

ed

Ara

b E

mir

ates

)

Sou

th A

fric

a

Ukr

ain

e

An

gola

Ger

man

y

UK

Ch

ile

Ind

on

esi

a

Swit

zerl

and

Egyp

t

Vie

tnam

Po

lan

d

Bu

lgar

ia

Ve

nez

uel

a

Be

lgiu

m

Can

ada

Mo

rocc

o

Ro

man

ia

Sou

th K

ore

a

Pe

rú

Inva

lid

Do

min

ican

Rep

Mag

hri

b

Do

n't

kn

ow

Basis: 178

80

Exclusive option avalable


Types of insurance

Q36 - On average, at last renewal when were your policy documents issued in relation to the policy inception date for …?

Before inception

date

18%

Within 1 month of inception

date

33%

Within 3 months of inception

date

35%

Over 3 months of inception

date

14%

Master policy

Before inception

date

10%

Within 1 month of inception

date

29% Within 3

months of inception

date

43%

Over 3 months of inception

date

18%

Local policy issuing

Basis: 430

81


Large claims handling

Q37A - What are the 3 main areas of improvement related to large claims handling? (Multiple Answer)

39%

22%

24%

17%

11%

8%

37%

14%

43%

14%

36%

17%

Policy wording tests

Set-up of claims handling procedure

Building relationships between insured, insurers and brokers

Pre-selection of lawyers and adjusters

Crisis management simulations

Return phone calls within 24 hours

Coordination between teams involved (in house, broker,…

Adequate and realistic reserve and evolution of reserve

Confirmation of position on coverage as quickly as reasonably…

30 days advanced payment once coverage is confirmed

Learnt lessons analysis

Automatic access to worldwide claims reporting

For your service providers (brokers, insurers, third parties)

Basis: 430

82


Large claims handling

Q37B - What are the 3 main areas of improvement related to large claims handling? (Multiple Answer)

19%

35%

20%

17%

34%

7%

37%

10%

10%

4%

56%

10%

Policy wording tests

Set-up of claims handling procedure

Building relationships between insured, insurers and brokers

Pre-selection of lawyers and adjusters

Crisis management simulations

Return phone calls within 24 hours

Coordination between teams involved (in house, broker,…

Adequate and realistic reserve and evolution of reserve

Confirmation of position on coverage as quickly as reasonably…

30 days advanced payment once coverage is confirmed

Learnt lessons analysis

Automatic access to worldwide claims reporting

Within your own organization

Basis: 430

83


Use(s) of risk and insurance

Q38 - Please select among the following items the most significant use(s) of risk and insurance related data. (Multiple Answer)

6%

20%

21%

23%

33%

44%

47%

57%

I do not conduct risk and insurance data analysis

Improve benchmarking abilities

Provide rationale for the risk management budget

Allow you to conduct captive optimization

Assess the cost of uninsured risks

Understand the company's risk appetite and tolerance

Allow you to conduct insurance program limit optimization

Allow you to conduct insurance program retention optimization

Basis: 430

84


Areas of improvement

Q39A - What are the top 2 areas of improvement you expect from a risk and insurance management IT platform / portal? (Multiple Answer)

24%

22%

38%

18%

44%

19%

15%

24/7 access

Daily update of activity & documents

Claims management tools

Interactivity

Tailor-made and user-friendly reporting…

Technical information/ advice/ best…

Management schedules / planning

In-house IT tool

Basis: 326

85

Filter on Q16


Areas of improvement

Q39A - What are the top 2 areas of improvement you expect from a risk and insurance management IT platform / portal? (Multiple Answer)

21%

26%

29%

27%

37%

31%

8%

24/7 access

Daily update of activity & documents

Claims management tools

Interactivity

Tailor-made and user-friendly reporting…

Technical information/ advice/ best…

Management schedules / planning

External IT solution (broker or insurer-provided)

Basis: 326

86

Filter on Q16


Thank you

87

ferma risk management benchmarking survey 2014 - european risk and insurance report

Business

risk management practices

risk managers expectations

insurance management

insurance market

insurance report1

referenced survey

questionnairethe survey

senior management track