Lessons from 2011
The Euro area crisis of 2011 has stirred up a certain amount of thought and publication on how to deal with the potential consequences of a possible break-up of the monetary union. In light of these events, the CRO Forum investigates the potential risk management considerations that companies could take with the objective of limiting the potential impact by providing considerations to improve companies’ responsiveness to adversity. The purpose of this work is not to contemplate how a currency break up could occur nor is it intended to write a step by step plan (recipe) of how to react to such a scenario that may unfold. Rather, the purpose of this work is to develop a risk framework of factors for management to consider that could guide companies in dealing with such a scenario. The example of the possible Euro currency break-up is used to illustrate this. This paper is therefore a series of considerations to guide companies in preparing for and managing through such a crisis. This paper is drafted with a specific focus on the implications and measures pertaining to the insurance industry. The specific target audience therein is Chief Risk Officers, Senior Management and Risk Professionals in general. We would like to iterate that the paper deals with the issues in as far as they can be anticipated. We do however recognise that there are also known unknowns which would require special attention beyond the scope of this paper.