RIMS president: risk managers should ‘think global, act local’

Risk managers should strive to “think global, act local” in their approach, believes David Arick, the 2024 president of the US-based risk management society RIMS, who is attending FERMA this week “to look for opportunities for risk managers to collaborate on a global basis.”

Arick, who is also managing director, Global Risk Management at Sedgwick, told FERMA Forum Today that he believes such an approach can benefit all, especially considering the abundance of talent that will be attending the event in Madrid this week.

“There are a number of risk managers attending who I consider to be among the best and brightest in the world,” he said. “While there, I also hope to spend time with them to compare notes on issues, priorities, and solutions.

“Working together, RIMS and the members of other risk management associations who are in attendance can identify opportunities to address the challenges facing us, and our organisations, today.”

Asked to explain his “think global, act local” mantra, he said that it may be strategically important for a firm to have a global approach or framework for addressing risks, but the organisation should also be ready to adjust. Any strategy should also specifically address differences in local regulations, customs, and operational needs, he said.

“To achieve this, it increasingly requires communication and support around the world so that risk managers stay current on regional events, changes in regulations, and new solutions,” he said.

Tools that ‘help bring credibility’

Such an ethos is even more important considering the many significant developments shaping the future of risk management, he noted, particularly in the context of technological advancements and emerging risks.

He said that almost every conference he has attended of late has sessions discussing artificial intelligence, cyber risks, climate change, and geopolitical risk. “There is so much to unpack with each of those topics, plus the development of both the risks themselves and the analysis of those risks is accelerating, especially from a technology standpoint.”

He noted that the analytics and visualisation tools available today are increasingly helpful in guiding discussions regarding risk assessment, mitigation strategies, and ongoing monitoring and reporting. These help risk professionals state their case more clearly.

“Analytics and modelling tools that support quantitative decision-making help bring credibility to risk professionals when they make recommendations in areas such as insurance limit/deductible changes, operational changes such as installing fire protection at manufacturing facilities, or other areas of risk management responsibility.”

Another significant development he highlights is the increasing acceptance of parametric risk solutions, as well as new use cases and triggers for these products. “Parametric solutions could become the insurance industry equivalent of a financial hedging product, something that finance and treasury professionals have used in their roles for decades to manage commodity, interest rate, foreign exchange, and other financial risks,” he noted.

Fostering a community

“The risk managers represented by both RIMS and FERMA have far more in common than what is sometimes believed.”

Returning to the subject of risk managers from different parts of the world and sectors comparing notes, he states that collaboration between industry bodies like RIMS and FERMA is important—and can help develop a more resilient and responsive risk management community in Europe.

“Working together is a force multiplier. It brings together not just additional people and financial resources, but more importantly, it fosters a community with diverse backgrounds and opinions that can empower us to work more effectively and efficiently to solve a common problem,” he said.

“The risk managers represented by both RIMS and FERMA have far more in common than what is sometimes believed by casual onlookers. Both associations have member organisations that are expanding operations into countries where RIMS and/or FERMA can provide support and resources.

“The global risk community is grappling with global issues like cyber security. And on a personal level, risk professionals are trying to elevate their skills. Because of commonalities like these, I believe FERMA and RIMS will continue to explore areas where we can jointly develop resources that benefit members of both associations.”

FERMA Forum Today is in partnership with Captive Review, part of Newton Media.

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