Ferma releases results of 2010 risk benchmarking survey

Ferma, the European risk federation, released the results of its latest benchmarking survey on the opening day of its risk management conference in London.

The survey, which tests the water to see how far European companies have progressed in their risk management efforts, found that there was no change in the main factors encouraging companies to adopt risk management procedures.

Legal, regulatory and compliance issues are the principal driver of risk management in Europe according to 70% of the survey respondents.

Speaking on the results at the opening of the conference Jean-Michel Paris, a director with Ernst & Young (sponsors of the survey) said that this was a surprise. "The pressure on companies to adopt better risk practices from shareholders was less than he expected", he said. Although with 39% of the respondents indicating shareholder pressure was a big influencer it is slowly raising in importance, he added.

Catastrophe risks, the fear of which was originally one of the principal drivers of risk management in Europe according to the survey which dates back to 2005, is slowly dropping off. This year less than half (45%) of the respondents said it was a major factor encouraging their companies to invest in risk management efforts.

Other important findings from the survey related to risk management maturity and risk appetite.

The findings showed that corporate attitudes to risk are mainly driven by the category (or type) of risk rather than a technical risk assessment. For example, companies mainly adopt risk-taking strategies when it comes to strategic or business risks (such as M&A or macroeconomic or financial issues). Conversely companies appear to be totally risk averse when it comes to regulatory, ethical and health and safety issues.

Perhaps unsurprisingly the survey also showed that the most risk mature organisations are also those with the most complex operations.

Over 700 risk professionals (not just risk mangers) responded to the survey, which is one of the most successful in Ferma’s history.

Continue to watch the website for more in-depth analysis of this survey and the Ferma conference over the coming days and make sure to pick up the next issue of StrategicRISK.