Amrae's long time president reveals his plans for the association and describes what risk managers in France feel like
Your election coincided with a considerable revision to the structure of the association. What are the main points?
I hoped to be elected on the basis of a programme presented to the governing council at the time of the election. I also hoped that this election would be an opportunity to strengthen the association’s procedures, and that it would see an influx of people who wanted to participate in the development of AMRAE. My election was therefore based both on a programme and on a significant renewal of the executive – which now has three vice presidents, two of whom, Anne-Marie Fournier and Bruno Dunoyer de Segonzac, are new. The third is Gilbert Brat. Together with Georges Bouchard, the secretary general, and Yvon Colleu, the treasurer, we make up an executive body which has been largely renewed. This significant change comes with a full recognition of the achievements of our predecessors, without whom we could not undertake this development today.
The change to our structure has also allowed us to bring in people of very varied backgrounds. Georges Bouchard and Bruno Dunoyer de Segonzac are chief risk officers in their organisations. Anne-Marie Fournier and Yvon Colleu are risk managers, Gilbert Brat combines all these functions, and, for my part, I have responsibility for audit as well as being a risk manager. Together we make up a panel which is representative of our universe.
AMRAE has also been reorganised - in what way?
We wanted to strengthen and clarify our organisation and governance. This is happening through the modification of our structure. I wanted to put in place three pillars, the first of which – the life of the association – has Gilbert Brat in charge. Its mission is to manage and develop four fundamental areas: members and associates, our annual conference – Les Rencontres, the working groups and the clubs.
The second pillar is communication, in the care of Bruno Dunoyer de Segonzac. It concerns everything which involves the reputation and reach of AMRAE: media relations, lobbying, international relations...
The third pillar is expertise: research into important ideas, a watch kept on regulation, taking positions on important topics. Anne-Marie Fournier is in charge here. In parallel with these three pillars, Michel Yarhi will continue to organise Les Rencontres, and Marie-Claude Delaveaud will pursue the development of training.
Why all these changes?
I hope that this new structure will help our association to be more easily understood by our members and by the outside world.
It emphasises our express desire to communicate in an optimum way and to carry out our function fully. We can make our presence felt better, make ourselves listened to, and – whenever possible – bring our influence to bear on the questions which concern us, and on those subjects where we can offer a constructive viewpoint to both business and society.
Both before and after the election we have been working on the idea of expertise, so that we can try to pick out those subjects – in theory and in practice – that we should be thinking about. This work is ongoing, and it seemed to me that we should be looking for competencies that were not restricted to a limited circle. With this in mind, we have set up thematic groups comprised of members and associates – to take in insurers and brokers .... these groups should be a medium for exchange.
What are the subjects?
There’s no lack of subjects! What is the future for the Gareat (the French terrorism co-reinsurance pool) and the coverage of terrorism risk? International insurance programmes, Solvency 2, class actions and many others. There are also more practical subjects, such as the economic development of certain regions, such as China, which will bring out new problems. One can add to these economic intelligence, governance, damage to reputation. Plus the concerns which affect our day to day work.
So what will be the role of the groups?
Naturally they will continue to work within their themes. Simply put, the thematic groups will allow us to consider subjects more broadly. But the groups must also have a good insight into the quality of their work. This will happen through the emergence of experts who can lead the thinking and whom we can call on for their specialised knowledge.
Are you going to continue with training initiatives?
I want to strengthen the continuity of the profession of risk management, while being entirely aware of its diversity. There is no single type of risk manager, and it follows that promoting the role is not a simple matter. But we must make everyone understand the importance and usefulness of managing risk. It is useful for our society; it is useful for our enterprises.
Is AMRAE going to undertake any public relations initiatives?
“Risk management mustnâ€™t act as a brake. The risk manager has to go hand in hand with progress
We are going to set up some new initiatives and acquire some extra tools for promotion, with the aim of showing our profession in the best possible light. This is happening, for example, through setting up a conference together with the ‘Les Echos’ newspaper which will take place on 13 June. And we are going to keep adding to the AMRAE collection, ‘Mastering Risks’. The second publication, on mapping, has just come out, following a first book on captives.
Is AMRAE going to open up to new membership categories?
We can work together, sit round the same table and put forward our thoughts. To do that, it’s hardly necessary to change the rules. Bringing in people from broking or insurance can be done in a much more informal way: that’s the whole point ofhaving thematic groups. I believe that goodwill exists, and that relations with our partners are improving every day.
What is your objective as president?
What I want above all is that the work of AMRAE achieves the recognition of everything that risk management can bring to an enterprise. It is already significant and gratifying to see that more and more presidents and chief executives are supporting, and involving themselves in, risk management. This is something of fundamental importance.
But risk management mustn’t act as a brake. The risk manager has to go hand in hand with progress. Progress which is sustainable, valuable and a force for good.
Managers of operational risk and of financial risk are often seen as different. Is it difficult to reconcile the two?
You can’t say that there are the technicians on the one side and the financial people on the other. Things are infinitely more complicated. For several years now we have evolving. You can’t manage risk without knowing about insurance. And you can’t sign contracts and insure your business if you haven’t mastered financial matters. We have to know the businesses, the processes and the activities of our organisations.
We have to know how to detect and analyse risk in order to be able to cover it. Knowledge of insurance can be taken into other sectors - moving towards the analysis of risks which may be fundamentally uninsurable, but where it is important to study ways of financing them. At heart, we are all making the same journey.
How do you see the recent development of the profession?
There are two main influences driving the evolution of risk management. The first is insurance, which brings the need for experts to study the contracts and sign them. These are people trained to analyse insurable risk – and therefore predisposed to analyse uninsurable risk – effectively another face of their profession.
And it is the market which has created the pressure to transfer from the one to the other. The increase in the price of insurance in 2001 made the financial transfer of risk less advantageous.
So, tools for self-insurance, such as captives, were developed in the context of a global trend for risk management to analyse risk in its entirety – far beyond the analysis of insurable risk. The return of a soft market has not stopped this development, which appears irreversible.
The second influence is regulatory pressure. Ever more stringent demands (Sarbanes-Oxley, LSF...) are made on those who run businesses. It is up to them to prove that they have the means to grasp and control the risks within their organisation. One of the consequences has been the rise to prominence of internal controls. But they are only a part of the global progress of risk management, and today businesses are turning to risk managers who have moved beyond this particular stage.
How can risk managers gain more power in organisations?
This is above all a question of personality rather than function. When it’s possible, people tend to steer themselves towards those zones which they really want to control. But increasingly frequently we see company boards creating opportunities for the risk manager to be entrusted with the mission of putting in place a global initiative to analyse the risks of the entire enterprise.
There are organisations where the risk manager takes responsibility for aspects of risk control as well as insurance. In others, they are separate functions. For still others, risk management integrates functions such as audit or internal control. I do not know whether it is necessary for risk managers to gain more power, as you suggest. But I do think that it would be a good thing if their work was judged at its true value everywhere.