Ferma keynote: Confronting the risks of a ‘new world’

Europe is in the most transitory period since the Second World War. This was according to the European Commission Vice-President Maros Sefcovic, in his keynote speech at the 2022 Ferma Forum.

Referring to the hybrid Ferma conference a year ago, he said there was already a feeling that life had become very unusual as Europe emerged from the pandemic lockdowns of the previous two years, but that was “well before 24 February 2022”.

Now, against the backdrop of Russia’s invasion of Ukraine, the challenges have risen yet further. “We are now in a new world, when war has made it back to the European Continent,” he said.

Sefcovic explained that part of his role was to head up the European Commission’s horizon scanning exercises.

”We are in an increasingly uncertain world,” he told delegates. ”Within the Commission, we are trying to identify risks and prepare for the next shock or crisis that heads our way.”

Supply chains: Learning the lessons

The geopolitical turmoil in Ukraine affects the whole of Europe, he explained, and had accelerated the need to tackle numerous mega trends, including the climate transition.

With supply chains in constant turmoil, there is a need to learn the lessons from recent disruptive events and ensure access to components and raw materials needed to enable economies to successfully transition to Net Zero.

“The EU is highly dependent on the supply of critical raw materials that will be needed for our green and digital transformation,” said Sefcovic. “And we need a new approach.”

The supply of lithium will need to increase by 3,500% by 2030 alone, he said, adding that previous forecasts of the need for €600 billion to €650 billion to fuel the green transition were now likely to be even more dramatic, given the impact of the War and inflation.

Realising governments’ commitments will require a merging of ‘two revolutions’ on the digital and green agenda, he thought.

There is a critical role for risk and insurance professionals, concluded Sefcovic in measuring, managing and paying out for losses involved in this transition.