Ferma urges Sweden’s EU presidency to focus on cyber and sustainability
The Federation of European Risk Management Associations (FERMA) has called on the Presidency of the Council of the European Union, which passed to Sweden in January, to focus on closing the protection gap for cyber and sustainability insurance. It also calls on the insurance industry to provide more coverage to support the digital and green transitions.
In an article entitled “Contribution to the Swedish Presidency’s agenda – Strengthening competitiveness at EU level”, FERMA highlights the importance of effective risk management to support the Swedish Presidency’s stated ambition to strengthen European competitiveness. It notes that the country’s presidency, which runs until the end of June, comes at a time of multiple challenges from inflation, energy crisis and war, along with the effects of the green and digital transitions.
FERMA believes that the key issues that risk managers must address in this context to strengthen competitiveness are cyber threats, increased influence of ESG considerations on policy, geopolitical uncertainty and unsustainable supply chains.
In terms of digital transformation, business technological innovation will be critical to Europe’s competitiveness, Ferma says, and risk managers will play a central role in helping organizations deal with growing cyber risks. However, it warns of a growing threat of cyber risks becoming uninsurable.
“It is FERMA’s view that the cyber insurance protection gap – namely the mismatch between the increasing demand for and lack of supply of cyber insurance – should be on the politicians’ radar, especially during the Swedish presidency,” it noted. It calls on policymakers to promote a holistic risk management approach to cyber resilience by building on the strong principle of cybersecurity by design in the Cyber Resilience Act.
The organization recently launched a Cyber Insurance Project to analyze current cyber challenges and provide solutions to strengthen digital competitiveness. It is also working on Project LUCY, which aims to help risk management organizations in Europe replicate what AMRAE has done in France to create a set of data and information on the cyber insurance market.
FERMA is also clear that the insurance industry has a decisive role in supporting the green transition.
“Encouraging companies to innovate and invest in greener and more sustainable products is one way to advance the climate agenda,” the report states. “But the financing of this adaptation is key; risk managers are calling for increased support from insurers who have proven to be risk-averse in connection with the green transition. Business insurance buyers are demanding more insurance coverage for the risks required to innovate.”
Welcoming the paper, Dirk Wegener, CEO of FERMA, said: “Enterprise risk management is the foundation; it enables companies to remain resilient and in business. Risk leadership is our compass to achieve what we want for our greener and more digital planet .”
Valentina Paduano, Chair of FERMA’s Sustainability Committee, added: “Risk managers’ role is to support senior management in highlighting sustainability topics at strategic levels. It is also to have a company-wide perspective to address these emerging new topics through consolidated processes and strategic discussions .”