50 years of risk: Annemarie Schouw, risk and insurance manager, Tata Steel Europe

How has the risk landscape changed in the last 50 years?

In many ways, the world was a much smaller place 50 years ago. Companies on the whole tended to operate within a more localised environment, risks tended to be more operational in nature with a more confined impact.

The world that companies operate in now is much larger by virtue of it being much more connected. The emergence of the internet and more recently AI has created a much more networked operating environment, and in turn a risk environment that is much more interconnected.

In tandem, companies have become more dependent on more expansive and complex supply chains that extend around the world.

“Resilience is the focus of all organisations which in turn positions them much more effectively to find those opportunities in the evolving risk environment that surrounds them.”

As a result, the analogy of a butterfly flapping its wings is now much more pertinent in the risk arena. Companies are more exposed to a wider spectrum of risks, which have the potential to affect organisations much more quickly, with the ripple effect of an incident such as conflict or a cyber event having a much more immediate and significant impact. Risks such as cyber do not recognise borders.

However, it is also important to recognise that in such a heightened risk environment, there is also opportunity. Resilience is the focus of all organisations which in turn positions them much more effectively to find those opportunities in the evolving risk environment that surrounds them.

How has risk management as a profession changed in the last 50 years?

The risk management profession has of course evolved in tandem with the shifting risk environment. Its status within the organisational hierarchy has shifted from operational to much more strategic in scope and input, underpinned be a much more analytical, and data-driven approach to understanding, predicting and managing risk.

A key factor in that is how risk management has evolved as a profession. Whereas 50 years ago it was primarily a role taken on in addition to other responsibilities that an individual might have, today it is a clearly defined function within an organisation – one which has expanded from being primarily a protection-oriented function to one which encompasses all of the aspects that are part of organisational resilience.

“Today risk management is a clearly defined function within an organisation”

The launch of RIMAP was a key development in this as it provides risk managers with an independent confirmation of their professional competences and experience. What is has also helped create this increased professionalism is the emergence of a single, consistent and unifying lexicon for the sector – which means that the profession is speaking the same risk language which they can also use to communicate with the C-suite within their organisations.

As the role has become more defined, this has also meant the creation of clearer career paths into the profession. People are no longer entering the sector through other sectors, but are able to take a direct route into a career in risk management.

How has FERMA and its role changed in that time?

I have been involved with FERMA since 2010. When I joined, the Federation was primarily recognised for events such as the Forum and the FERMA Seminar which brought the risk community together.

Since then, it has become much more of a strategic partner to the risk associations that it represents and a much louder voice on the European stage. FERMA is now a force to be reckoned with at the EU level and has taken a front seat in regulatory developments on critical risk areas including captives, cyber threats, and climate change

During that period, it has also significantly increased the level of interaction that it has with the national risk associations across Europe. It has grown in size and stature, becoming a much more visible body to its members, European institutions and on the international stage, while connecting with those member associations in a more meaningful and impactful way.

This is reflected in the Forum itself which this year will see a record number of delegates attend from Europe and other international countries.

What are the top risk management priorities for the future?

The World Economic Forum’s Global Risk Report 2024 states that it is set against “a backdrop of rapidly accelerating technological change and economic uncertainty, as the world is plagued by a duo of dangerous crises: climate and conflict.” This is the environment that risk managers today are operating in.

“As risk managers, a key aspect of our ability to manage these risks is our ability to deal and work with people”

The report highlights critical risks ranging from misinformation and disinformation and cyber insecurity, to the economic downturn, extreme weather events, and the impact of AI technologies – all of which are priority issues for the risk management profession.

Such risks are highly interconnected in an increasingly complex world. However, the one constant is the human component in every one of these risks. As risk managers, in many instances a key aspect of our ability to manage these risks is our ability to deal and work with people. That personal interaction is a vital component of our role.

How does the industry need to adapt to keep pace with changing risks?

Collaboration will be key to how companies adapt and keep pace with the rapidly changing risk environment. It is about working with other sectors and industries, such as insurance and technology, as well as regulatory bodies, to develop innovative, multi-tiered solutions that will enable us to transform how we manage risk, mitigate the impacts, and build greater resilience.