As a Group, we have a dedicated risk management system. In conducting our business activities we are exposed to risks which can be grouped into several categories, including insurance risk, financial risk, credit risk, operational risk and other risks. More information is also provided in the Risk report, to which a section of the Annual Integrated Report and Consolidated Financial Statement is dedicated.
All areas of activity need to be analysed, identifying potential sources of risk, in particular, for a group like ours that attaches strategic importance to ethical concerns, factors that expose us to a reputational risk are of particular significance. Examples of this include possible damage as a result of harm to the group’s reputation or a negative perception of the corporate image among clients, counterparties, rival companies, shareholders or supervisory authorities.
Once possible areas of risk have been identified, the most appropriate measures to prevent or minimise the occurrence of these risks must be considered. This, at least with regard to the main risks, already takes place through the formulation of policies, which in many cases contain measures to mitigate the indentified risks.
Among the external risks, which could have the biggest impact on our activities, the most significant is demographic change, consisting, in particular, of an ageing population, lower birth rates, new family structures and migration. Indeed, the scenario that emerges contains major risks in economic terms, specifically relating to pressures on growth and the labour market increases in public spending on pensions, healthcare and the propensity to save.
In environmental terms, the most significant risks relate to climate change. The most serious consequences already observed include a higher frequency of major catastrophic events caused by natural phenomena such as storms and floods. These phenomena are likely to increase both in terms of intensity and frequency and of geographic regions affected. In addition to triggering increases in the amount of compensation paid out by insurers, this is leading to a growing demand for insurance coverage, with opportunities to promote the sale of existing products and develop new ones. However, the concentration of risks in the most exposed areas could also lead to increases in prices over time that are not sustainable for potential clients, or even the non-insurability of risks, if the cumulative exposure exceeds the Group’s technical capacity.