The Federation of European Risk Management Associations (FERMA) is urging the Spanish Presidency of the Council of the European Union to make progress on the green and digital transitions a priority to help drive EU competitiveness and enhance strategic autonomy, while also ensuring the ongoing effectiveness and affordability of the private re/insurance market.
In their paper: “Contribution to the Spanish Presidency of the Council of the EU – ‘Europe, closer’: what does this mean for Risk Managers?”, FERMA has called for definitive action on a variety of several legislative fronts. This includes the Directive on corporate sustainability due diligence (CS3D) and Solvency II, and addressing the need for adequate insurance coverage to facilitate the transition into a low-carbon economy, as well as for greater collaboration on cyber resilience.
All in all, the FERMA paper addresses three key areas: Advancing the green transition, ensuring the EU’s open strategic autonomy – with a digital focus, and the key role of insurance management in supporting the transition.
Moreover, while FERMA supports the ambitions of CS3D and the need for companies to address environmental and human rights impacts in their supply chains, the paper underlines the importance of cementing a risk-based approach at the heart of the rules, which would enable companies to prioritize activities on these fronts. It believes this is important towards ensuring that Europe continues to play a leading role in facilitating the move to a low-carbon economy while remaining competitive.
The paper reads: “To support the green transition, and to meaningfully combat the effects of climate change, FERMA advocates a more risk-based approach to value-chain due diligence aligned with international standards.”
At the same time, the paper also addresses the need for “affordable and adequate insurance coverage” to support organisations in their transition efforts and spotlights the importance of closing the growing protection gaps on this front.
It reads: “FERMA is concerned that the private (re)insurance market is not offering sufficiently innovative, affordable or competitive risk transfer solutions.”
Moving forward to Solvency II, FERMA pushes for the adoption of a more proportionate framework, which it states “would ultimately give captive (re)insurance undertakings the status of low-risk profile undertakings, which would help give enterprises in the EU more options for their risk-transfer strategies.”
Elsewhere, as discussions around the proposed Cyber Resilience Act continue to take place, FERMA calls upon the Presidency to achieve political consensus on the legislation, stating: “For risk managers, the ethos of ‘cyber security by design’ in legislation is a positive and necessary development.”
However, it also adds: “We are mindful of the possible ramifications such a piece of legislation might have on the insurance coverage options for enterprises” and highlights the challenge of ensuring product availability that meets the risk needs of buyers.
Dirk Wegener, President of FERMA, commented on the paper: “FERMA looks forward to engaging with the Spanish Presidency during this critical period. The risk management community has a central role to play in advancing developments on all of these critical fronts and contributing to the continued competitiveness of the European market.”
Juan Carlos López Porcel, President, AGERS, added: “AGERS believes that through close collaboration between the FERMA the risk management community and the EU Spanish Presidency can play a central role in supporting the Council in achieving many of its risk and resilience-focused ambitions. We firmly believe that the areas that FERMA is focused on will help to ensure a more robust and relevant supply chain for governments and businesses to the benefit of the EU as a whole.”
Daniel San Millán, President, IGREA, said: “The commencement of the Spanish Presidency of the Council of the EU is clearly an important and exciting development for IGREA. We view the risk priorities that FERMA has urged the Council to address as critical not only from a risk management perspective but for the overall competitiveness of the EU. We fully believe that these areas are fundamental to ensuring that Europe remains a highly conducive and productive business environment.”
