Risk Management is no fairly tale

Risk and insurance managers do not believe in fairy tales. This will become clear at the 11th annual congress organised by NARIM, the Dutch professional organisation of risk and insurance managers. The congress, with the theme Risk Management: fairy tale or a true story, takes place in Veldhoven in the Netherlands, on 24 and 25 May.

The NARIM congress has grown into a valuable meeting place for all involved in risk control and risk financing. Members of NARIM's Belgian counterpart, BELRIM, have been invited, and indeed everyone who is interested in risk management from a professional point of view and who wishes to network with colleagues should attend.

NARIM says that companies, institutions and government bodies are confronted with risks. For many people, the word 'risk' still has a negative connotation. However, risks can be limited and controlled. That is not a fairy tale, but a true story. Risk management is a unique discipline which is developing at a high speed, and NARIM actively contributes to the professionalisation of the discipline.

Risk management has become an important item on political and government agendas, particularly with stringent corporate governance regulation and the more rigid inspection of financial markets. It has also become more probing. Businesses as well as governments and institutions need to organise their risk management well and executives are expected to explicitly communicate that they are in control. NARIM sees the responsibility of risk and insurance managers as finding the proper balance between the possibilities that limit or cover risks. They have to process large amounts of data, accurately analyse the extent and size of risks and determine whether insurance is an appropriate solution.

What makes a good risk manager? NARIM suggests that a risk and insurance manager is curious to find out how a risk is built up and why risks are taken. He or she is proactive by nature and does not wait for things to happen. It is important that people are notified of the risks they run and the significance of risk management. Big interests are often at stake. Prices and planning are under pressure; contracts become more complicated; risks shift from client to contracted party, and the number of conflicts rise.

The risk manager is continuously following the latest developments in the field. He or she works on calculable and non-calculable risks. If ten people wish to effect insurance against the consequences of bird flu they will have little difficulty arranging it, but the opposite is true if a large part of the global population wishes to do the same.

The tension between commercial interest and the extent to which risks are taken should be manageable, explains NARIM. That is the main starting point. Therefore, risk and insurance managers should not only know about insurance, but they should also be able to organise well and communicate the urgency of gaining control of certain risks to managers.

NARIM was founded in 1996 and aims to increase knowledge about corporate risk control and risk financing and to enlarge the practice followed in these areas. NARIM also serves the non-individual interests of the organisations represented by the associated members. It functions as a think tank, enabling the exchange of knowledge and experience, and also lobbies government and provides a conduit for European information through its membership of FERMA.

NARIM has around 140 members drawn from large and medium-sized businesses, institutions and government bodies.