FERMA study lifts the lid on resilience

FERMA and McKinsey have released the findings of a new study which provides evidence of the importance of risk and insurance managers to the overall resilience of their organisations.

Launching the report, the president of FERMA Dirk Wegener said: “Before the pandemic, we knew that risk management and risk and insurance managers had an important role in keeping shocks from destabilising their companies. The pandemic proved that. Until this report, however, we had little data on that contribution.”

The Coronavirus pandemic accelerated the push for corporate resilience, though in varying degrees across sectors and resilience pillars. More than 60% of the survey participants acknowledge resilience as a top priority or very relevant in strategic decision-making.

The majority of participants feel their organisations are well equipped to manage resilience overall. Risk and insurance managers are involved in the process in a meaningful way with further room to lead initiatives, especially in predictive capabilities such as scenario planning and stress testing.

Wegener added: “The pandemic has highlighted the importance of good risk and crisis management and its contribution to resilience, but we must not be complacent.”

”We continue to face other, potentially disruptive shocks, for example, from climate change and cyber risks. Resilience is essential for the success of European business, and as this survey shows, in this, risk and insurance managers can be leaders.”

Other findings include:

• Financial, operational, digital and technological resilience are considered the most relevant areas across companies. Foresight capabilities (scenarios and stress testing) emerge as a core area to strengthen corporate resilience.
• The risk function and executive teams play a leading role in building resilient organisations, more than strategy teams.
• Looking forward, almost three-quarters of the risk managers surveyed see a clear need for both improving risk culture and more strongly integrating resilience in their organisations’ strategy.
• More than 90% of those surveyed said that the global pandemic made risk management and resilience more important to their organisations; more than 50% said to a considerable or great extent.
• More than 60% of the participants acknowledge resilience as a top priority or very relevant in strategic decision-making.

The report presents the views of risk and insurance professionals and senior executives about a post-pandemic view of resilience management in their organisations across sectors globally in the summer of 2021.