Eberhard Faller wins European Risk Manager of the Year 2017
Mr Faller developed a completely new and innovative insurance strategy for his firm
Eberhard Faller, senior vice-president of central insurances at BASF, was named European Risk Manager of the Year at a gala dinner in London last night. He took the leading prize on an evening when winners of the other Excellence in Risk Management categories were announced, along with those from the Excellence in Customer Services and Individual Achievement shortlists.
Mr Faller, who is a member of German risk management association GVNW, won his award at the event jointly held by Ferma and Commercial Risk Europe at The Gibson Hall. Nominating him for the award, GVNW spoke of Eberhard’s “extraordinary performance over the last 12 months,” and described the insurance strategy he devised as “as benchmark for German industry”. He received his prize from Chris Fischer Hirs, CEO of category and awards’ headline sponsor Allianz Global Corporate & Specialty (AGCS), in front of more than 300 colleagues from the world of risk management and transfer.
All award winners were chosen by a judging panel of leading risk managers from within Ferma and its national associations. Mr Faller won European Risk Manager of the year from a shortlist of finalists that included Gökçe Çıtak, risk and insurance coordinator at Socar and member of Turkish risk management association Erma; and Martti Ojanen, group head of risk at Loomis and member of Swedish risk management association Swerma.
The judges said Mr Faller developed a completely new and innovative insurance strategy for his firm, which gained the full support and backing of its executive board. It included the development and implementation of a new global insurance programme that led to standardised terms and conditions for all subsidiaries and an enterprise risk management (ERM) approach.
In addition, he developed a risk retention programme within a captive insurer that enabled BASF to retain improved aggregate claims performance. The judges felt that Mr Faller demonstrated excellent professionalism in identifying and implementing the insurance strategy that, in the opinion of one judge, should become the benchmark within the risk management community.
Eberhard Faller talked to FERMA about his career and his work.
How did you get into risk management?
The long version is this: born into an insurance household and grew up very young in personal insurances and the challenges of distributing a non-physical product. The short version: after many years in finance and general management my current role was offered to me and I could bring all my prior experience into developing a global and modern organisation at BASF.
Briefly, what are your main responsibilities as the Senior Vice President of Corporate Insurance for BASF?
Organise adequate insurance coverage for catastrophic incidents while maintaining our own target risk retention for all global insurance programmes that are defined as mandatory products within the BASF group. Manage all insurance claims with own or outsourced resources. Advise on risk management and risk prevention aspects. Assist the operating divisions in specialised insurance solutions that are tailored to their business needs. Lastly, as CEO of the captives, managing them forms a further job element.
Why and how did you develop a new insurance strategy for BASF? How long did it take?
At BASF every global function needs to develop a strategy describing what it wants and needs to accomplish over the forthcoming five years. Our aspiration in this context is possibly reach a leading role in our relevant peer group.
In that sense, when I was offered my role in 2010, I was given six months to develop what was indeed the first BASF insurance strategy, present it the board of executive directors and subsequently implement it. We rolled in all critical elements in accordance with a high-level implementation schedule over four years: in a nutshell, forming a global team, developing global insurance programmes and managing a suitable risk retention.
The company suffered a major loss in 2016. Can you describe it and explain how the insurance programme responded?
This refers to the explosion at our harbor at the Ludwigshafen site of our headquarters. While the reports of the experts are still not available, it is alleged that that during routine repair work on one pipeline, a cut was made into an adjacent pipeline which contained flammable liquid. resulting in a tragic loss of five lives, significant damage to infrastructure and property as well as business interruption. Our associated property, liability and accident programmes responded fully in accordance with policy terms and conditions.
How valuable do you think captives are for a company like BASF?
Captives are a valuable tool to implement the insurance strategy in terms of the company’s own risk retention. That means we offer the insurance market typically a market layer attached to a level that historically has not produced a claim (exception: property) and retain all claims in the primary layer signed by the captive. The captive offers different deductibles to BASF’s businesses ranging from small to very significant according to their respective risk bearing capabilities.