Magazine article Risk Management

Risk Management Associations Merge in France

Magazine article Risk Management

Risk Management Associations Merge in France

Article excerpt

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. …

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