StrategicRISK asked Paolo Rubini, head of risk management for Telecom Italia, to name his three top risks right now. Here they are.

1. Finanical risk

As the economic crisis develops, Europe’s financial weaknesses are becoming more and more apparent. As a result of the two-speed economy and the lack of control over the behaviour of financial institutions and governments, there is an increasing risk of default. The lack of growth in our region makes the work of the risk manager more difficult. We have to carry out our activities in accordance with an environment where growth is low and demand is weak. We are dealing with lower margins, which puts more pressure on everyone, and companies could also experience problems securing sufficient credit. We can mitigate this financial threat by effectively bringing all of the company’s risks under control.

2. Demographic risk

Demographic problems are particularly great in Italy and this could have a serious effect on how the population consumes products and services. Typically, young customers are easier to deal with than older customers, so if you have a growing elderly population, this will have a significant effect on your business. There is a certain amount of conflict and tension between generations, which has been made worse by globalisation. Another significant demographic change is the rise of the multicultural society, this means that we have new customers from different cultures who sometimes speak different languages. Companies need to be able to meet the needs of these new customers.

3. Political risk

With recent developments in the Middle East and North Africa, there are more regions that are affected by significant political risk. This kind of risk can be difficult to measure and difficult to insure. In general terms, I think there is sufficient coverage in the insurance market, but there are still some areas, such as nuclear power and political risk, where coverage is not available or where there is not enough capacity in the market. Political risk can also be difficult to insure. For example, if you want coverage for political risk in Brazil or Argentina, it can be very difficult to find.

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