Risk Environment & Perspectives

•SEMINAR 2014 •1

BRUSSELS, 20-21 October www.ferma.eu

Top 10 Risks…

SEMINAR 2014 2

BRUSSELS, 20-21 October www.ferma.eu

…and 2014 risk dashboard

SEMINAR 2014 3

BRUSSELS, 20-21 October www.ferma.eu

2014 Risk Mitigation

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High risks (importance) with higher Mitigation level : Continuous monitoring

High risks (importance) with lower Mitigation level :

Action required

LO

W

IMP

OR

TA

NC

E

HIG

H

LOW MITIGATION LEVEL HIGH

BRUSSELS, 20-21 October www.ferma.eu

2014 Risk Mitigation

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Are you satisfied by your current level of mitigation ?

Not really! Room for improvement ?

BRUSSELS, 20-21 October www.ferma.eu

Preferred Risk Management Strategies

From ACCEPT, to REDUCE, and TRANSFER

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Strategic and

external risks

Operational and

compliance risks

Operational and

financial risks

BRUSSELS, 20-21 October www.ferma.eu

Your concerns about EU regulatory matters

1. Data Protection Regulation (DPR)

a. DPR is important especially for the banking and

financial services sector (73,6%).

b. Fines and sanctions (33%), and requirements from the

national regulator (45%) are the main concerns.

c. Only 9% of the respondents perceive the appointment

of a Data Protection Officer, for organisations with more

than 250 employees, as a negative requirement

SEMINAR 2014 7

BRUSSELS, 20-21 October www.ferma.eu

Your concerns about EU regulatory matters

2. Annual reporting and transparency

a. The country by country reporting seems to be a

problem from a confidentiality view point (49%):

i. It may lead to disclosure of too much information on an

organisation’s strategy

ii. Especially if there is no level playing field with other regions in

the world which are not following the same regulatory trend,

eventually threatening the competitiveness of European

companies

SEMINAR 2014 8

BRUSSELS, 20-21 October www.ferma.eu

Your concerns about EU regulatory matters

3. Solvency II and captives treatment

a. Quite logically, 60% of captive owners have chosen Solvency II as a regulatory priority for FERMA.

b. According to captive owners, future interest in captives differs : i. If an organization does not own a captive yet, 77% of current captive

owners responded that Solvency II will decrease its interest to create one due to heavier rules and requirements.

ii. But if an organization does already own a captive, involvement of this captive in the next 2 years will increase or at least stay identical (94% for traditional lines of cover, 80% for non-traditional lines of cover)

c. Results in line with FERMA argumentation: i. Rising costs for the use of captives (88%)

ii. Fewer options to transfer risk (75%)

d. But 55% are seeing Solvency II as a useful incentive to implement risk management policy to reduce losses

SEMINAR 2014 9

BRUSSELS, 20-21 October www.ferma.eu

Evolving Risks

Cyber Liability

EU Data Protection Directive – postponed until at least 2015

Increased workforce mobility. The “Internet of Things”

Use of big data analytics. Increased use of cloud computing

Environmental Liability

Changes in environmental regulatory landscape in Europe and

globally

Prospect of increasing enforcement in respect of environmental

damage

SEMINAR 2014 10

BRUSSELS, 20-21 October www.ferma.eu

Emerging Risks “Emerging Risks are risks which may develop or which already exist and

are continuously evolving. They are characterized by a high degree of

uncertainty in terms of impacts and likelihood, and have a substantial

potential impact on Insurance business lines”. *

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*CRO Forum 2013

Thanks for your support !