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Risk management associations merge in France.

THERE'S AN OLD ADAGE that says that two heads are better than one. However, risk managers in France do not necessarily subscribe to that notion if the two separate entities are risk management associations with strikingly similar functions. Thus, this past May bore witness to the founding of a new French national risk management association, the Association pour le Management des Risques et des Assurances de l'Entreprise (AMRAE). Resulting from a merger of ACADEF and GACI, two professional French risk management associations, AMRAE unites under one organization some 400 individuals and companies in France to form what it hopes will be the authoritative voice for the entire risk management sector in the country.

ACADEF (Association des Charges de la Gestion des Risques et des Assurances des Entreprises Francaises) and GACI (Groupement des Assures du Commerce et de l'Industrie) were both created in 1972. At that time, each did have substantially different objectives. "GACI was an association of corporate entities whose main concern was to protect the interests of corporations facing a cartelized insurance market and strong premium increases," recalls Pierre Sonigo, director of risk and insurance for Saint-Gobain Co. in Courbevoie, France, who had served as the president of GACI from 1992 to 1993, and currently is a vice president of AMRAE. On the other hand, "ACADEF was an association of individual insurance buyers who wanted to protect and develop their function," Mr. Sonigo adds. As a result, these philosophical differences were sufficient to prevent the formation of a single organization for the next two decades.

Why Now?

THE MERGER came about because "over the years, it became obvious that both associations were going after the same goals -- promoting risk management as a function in organizations and acting as consumer associations facing the insurance world," Mr. Sonigo says. Also, the memberships (approximately 30 percent) of ACADEF and GACI overlapped, as did many of their activities. For example, each association had working committees laboring over the same subjects.

But instead of being complements, the two associations more resembled competitors. As a result, they were not projecting a "proper professional image" to the insurance community, Mr. Sonigo says, adding that a unified front made further sense in light of a hardening French insurance market. So the boards of both associations agreed to a one-year trial period of joint ACADEF and GACI operations, which began in January 1992. "After a successful completion of this year, the boards decided that a merger was appropriate, which has since been extremely well received by members, brokers and insurers," Mr. Sonigo reports.

Part of the success of this merger can be attributed to the preparatory work of Thierry Van Santen, a risk manager for Valeo in Paris, who had invaluable insight into both organizations. Mr. Van Santen -- now serving as AMRAE's first president -- had served both as a board member of GACI and as vice president of ACADEF. Under his leadership, the objectives of the two associations were consolidated into an ambitious statement of AMRAE's goals: "to promote and develop methods of risk management and insurance using all financial, legal, management and technical systems to improve the prevention and management of risk and the protection of public or private organizations; to defend the interests of its members; and to promote the exchange of information and improve the knowledge of its members, notably by training."

The French Experience

"I BELIEVE THAT we are currently going through a decisive stage in France," says Guy Lamand, a vice president of AMRAE and corporate risk manager for Framatome in Paris. "More and more managing executives understand the necessity of including risk management as a component of their corporate strategy. It is no longer sufficient to have a coherent insurance purchasing policy -- one must also have the determination to better master risks and deal with them, rather than just trying to finance their costs," he adds.

This trend should certainly make the risk manager's job easier. For example, with top management's support, "a certain number of French risk managers are developing a veritable risk analysis and prevention policy, having finally realized that it is preferable to avoid risks than to allow them to strike, and that money does not solve every problem -- it can never recover lost customers or restore a damaged company image, for example," Mr. Lamand says.

Companies in France will also find that today, "the risk manager's participation in exchanges with insurers and brokers associations and representatives of the government is quite extensive," Mr. Sonigo reports. He adds, however, that risk management principles still need to be extended to the mid-level corporations.

One way AMRAE plans to enhance the risk management discipline's appeal and professionalism in France is by focussing much of its efforts on improving and expanding the availability of risk management education. Today, risk management education in France, Mr. Van Santen notes, can be divided into three areas: risk management-specific elective courses in some universities and private schools; optional risk management courses in some management training programs for experienced executives; and an advanced course of study offered by the University of Bordeaux. According to Mr. Sonigo, l'Institut de Management des Risques in Bordeaux has trained graduate students in risk management since 1989, and gives them, upon completion of an 18-month course, a degree equivalent to a master's degree.

Although the risk management discipline still lacks an accreditation program in France, Mr. Sonigo reports that "several education programs are being developed in cooperation with our association and should be available soon." And while AMRAE does plan to develop courses in universities, it also plans, according to Mr. Van Santen, "to set up a risk management course for the association's members."

Future Activities

"FRENCH RISK MANAGERS will certainly have a much wider field of action in the future than just insurable risks," predicts Guy Lamand. Most notably, they will have to deal with such Pan-European issues as European Community government directives heavily influenced by Anglo-Saxon principles of law, which differ from the "Latin" character of French law.

Risk managers will also have to address the evolution of legislation concerning environmental protection, which will require more and more risk audits, particularly when companies are bought or sold. Furthermore, Mr. Lamand notes, "there will be the question of Central and Eastern Europe: new markets, but also new risks?"

To help meet these challenges, AMRAE's working groups, which were previously run separately by the two associations, now will offer 12 areas in which the members can carry out study and research: captives; construction; the cost of risk; crisis man-agement; the environment; fire and business interruption; legislation; information systems; pension funds and employee benefits; products liability; the state of the market; and transport. Future activities will also focus on organizing or sponsoring meetings and conferences. More specifically, AMRAE plans to run a series of topical business breakfasts and lunches, and to stage its first national conference in Lyon from January 20 to 21, 1994.

The new association also aims to maintain contacts with business and government on national and international levels and to reinforce links with French and foreign organizations that have similar goals. To be sure, AMRAE is well on its way to fulfilling this objective, when one considers the contacts with other organizations its members already have with the International Federation of Risk and Insurance Management Associations and the Association Europeenne des Assures de l'Industrie.

For more information on the association, please contact: AMRAE, 9-11 Av. Franklin Roosevelt, 75008 Paris; Tel.:; Fax:
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Author:Kurland, Orin M.
Publication:Risk Management
Date:Sep 1, 1993
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