Start of Our New HORIZON Series “Environment in Danger”

Under the title “Environment in danger”, our upcoming HORIZON series concentrates on the ecological transformation and therefore looks at all its challenges from various angles.

In our previous HORIZON series, we introduced our 4 Risk Changers model and took a close look at the systemic influences of ecological, geopolitical, technological, and social transformation on a company’s risk landscape.
Other crises, the climate crisis being a prominent example, are more likely to emerge as developments that gradually manifest themselves. The HORIZON – “Risk Thought » Fast Forward” is our community platform for risk thought leadership. It is based on our vision to detect the impact of these systemic risk changers at an early stage and introduce risk management solutions that boost our clients’ resilience. The extent of their impact will only occur in the future and are therefore not immediately apparent. Due to their abstract nature, these developments are overshadowed by immediate events, although their relevance is often more far-reaching and therefore require our utmost attention.

Under the title “Environment in danger”, our upcoming HORIZON series concentrates on the ecological transformation and therefore looks at all its challenges from various angles.

Risk-based methodology for transformation risks

We have developed our risk-based methodology to manage the risks associated with the underlying systemic change. We distinguish between primary transformation risks, which in the case of climate change are climate risks such as natural hazards, which are directly derived from global warming, and secondary transformation risks, which arise from the necessary adaptation of the corporate strategy (including their business models, products, services, applications, processes, and technologies) to the climate crisis thus lead to a change in the risk landscape.
When we look at climate change, primary transformation risks appear as physical risks. They are apparent in form of a changed or an increased exposure to natural disasters, such as floods, storms, hail as well as heat, drought, or a rising sea level. As far as companies are concerned, these risks can cause anything from material damages to disruptions of transport routes, in energy, or raw material supplies.
Besides these primary transformation risks, which affect companies as “pure risks” from the outside, systemic change leads to secondary transformation risks that are “speculative”. They derive from companies’ adapted business strategies that were developed in response to the systemic change and comprise both risks and opportunities.

Transformation of the ecological risk landscape

To master the ecological challenges that lie ahead of us, we will have to tackle a far-reaching transformation of our economic system. The decarbonization of industry, commerce, freight, and passenger transport as well as private households has top priority. This inevitably leads to the switch to renewable energy sources, the promotion of clean mobility, the introduction of new energy management systems and green building technologies, new ways of energy storage, the development of sustainable fuels and ultimately also new methods of carbon dioxide capture, utilization, and storage.
Equally important is the protection of biodiversity through a development towards a circular economy and the careful use of resources, new technologies for clean water, advanced methods in agriculture, but also nature conservation and restoration.
This HORIZON series focuses on the new risks and regulatory challenges that companies face because of this transformation, as well as the role of data analytics and AI in this area. We invited clients and business partners to join our risk thought leadership community and provide some insights on their point of view. Also, many of our employees across our group contributed to this series.
I want to thank them all for growing our community and their efforts in doing so.

Georg Winter


T +43 664 962 39 06

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“To Be or Not to Be”?

Other crises, the climate crisis being a prominent example, are more likely to emerge as developments that gradually manifest themselves. The full extent of their impact will only occur in the future and are therefore not immediately apparent.

“The time is out of joint,” lamented William Shakespeare’s Hamlet more than 400 years ago. Yet, one could be forgiven for thinking he was talking about the confusion of the present day as we battle crisis after crisis.Many of these crises are sudden, tend to be short-term in nature, and are local or industry specific. They affect us directly and persistently demand our full attention.
Other crises, the climate crisis being a prominent example, are more likely to emerge as developments that gradually manifest themselves. The full extent of their impact will only occur in the future and are therefore not immediately apparent. Due to their abstract nature, these developments are overshadowed by immediate events, although their relevance is often more far-reaching and therefore require our utmost attention.

The concrete crisis dilemma

In practice, companies are often faced with the dilemma of focusing on long-term, sometimes even abstract goals and the necessary resources required for them, when suddenly unforeseen events crop up out of the blue, disrupting the sustainable pursuit of measures that are crucial to achieving the changes that are necessary in the long run. The perception of strategic risks is therefore pushed into the background again and again. At the same time, sticking to managing these strategic risks is also an important contribution to being prepared for events that could occur at short notice.
It is human nature to pay close attention to risks that are tangible and have concrete repercussions in the here and now. Abstract dangers that are not immediately a threat to us are neglected in our subjective risk perception.  As a result, politicians are tempted to follow the public mood to maximize their chances of success in the next elections, or the media orients itself accordingly to gain maximum circulation.
In times when public discourse seems to have lost courage and far-sightedness, and society is jumping from one crisis to the next, companies are required to act with foresight and keep an eye on their long-term goals. The urgently needed paradigm shift away from focusing on short-term results towards building strategic resilience is of particular importance.

Why we should listen to the next generation

Many political and economic decision-makers belong to a generation that can look back on an eventful life characterized by confidence and growth. Their diligence and commitment have made a significant contribution to the development of a society in Europe that is based on social prosperity and peaceful coexistence.  To ensure this peaceful coexistence in the future, the tolerance that we have towards our fellow human beings and their risk perception and concerns is of the utmost importance. When dealing with long-term risks, such as the long-term effects of the climate crisis on our personal security and economic existence, it is crucial to include the next generation, which will be directly affected by these effects, and to take their concerns seriously. 

How companies will deal with their ecological risk landscape – a pragmatic scenario

If climate scientists’ models are to be believed, the likelihood and impact of physical hazards will increase dramatically as global average temperatures rise. The climate-related change, which was previously perceived as a long-term development and the consequences of which will only appear in the distant future, will transform itself into an acute danger with immediately noticeable effects due to the drastic increase in suddenly occurring, climate-related events.
A possible scenario could be that the dimension of these primary risks is heading towards a tipping point, at which not only a clear public opinion manifests itself, but also political action becomes unavoidable. By then at the latest, banks and insurance companies as well as investors will place additional, non-material criteria at the centre of their risk assessment.
For both society and the public, the cost of managing these physical risks will be enormous, at some point exceeding the cost of transformation. From this point on, companies will put their full focus on the ecological transformation of their corporate strategy.
The costs of physical risk are becoming a competitive disadvantage for companies. From the tipping point, investments in ecological transformation will therefore pay off insofar as they increase the resilience of the company, open-up new business opportunities, and will ultimately emerge as a decisive competitive advantage.
What does this mean for risk management? In view of the increasing danger from physical climate risks, it is essential to identify their influence on one’s own assets and to eliminate weak points as best as possible. In addition, secondary transformation risks must also be identified as early as possible to be able to develop cause-related and effect-related measures for these, often new, risks.

Insurers – innovation vs. aversion

Insurers also play a key role in mitigating transformation risks. However, it is in their nature to primarily look in the rear-view mirror to be able to assess a risk based on the claim’s history. However, as we do not have the necessary historical data for transformation risks, the insurance market will have to find new ways to be a systemically relevant part of this transformation.
If insurers want to continue to fulfil their role as “enablers of the economy” in the future and not continue to lose industry importance, then it is time to support the transformation with targeted incentives and innovative solutions instead of with a restrictive underwriting policy only to keep an eye on their own risk landscape.
Therefore, the insurance market must be proactively involved in the transformation at an early stage. The prerequisite for this is the combination of the company’s agile and transparent risk management strategy, coupled with proactive risk mediation by the broker.  Only through a joint effort will we be able to meet the challenges of the transformation ahead of us. What matters here is a sense of responsibility, future orientation, and mutual respect, because only a functioning risk partnership between companies, risk carriers and brokers will be able to contribute to the well-being of our society.

Georg Winter


T +43 664 962 39 06

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Be more agile! How to anticipate a transforming risk landscape

An effective risk management process is a basic requirement for tackling transformation risks. In most cases, the risk analysis that goes with identifying risks focuses on actual risks. Abstract risks, which are currently hard to assess and thus difficult to evaluate, yet which in essence derive from systemic change or resultant strategic decisions, are often overlooked. However, to master the ever-increasing speed of change we are challenged to adjust the pace with which we tackle the associated risks. Agile risk management plays a decisive role in this process.

My first article of the current HORIZON series introduced our 4 Risk Changers model and put the spotlight on the multiple challenges faced by companies. In the light of ongoing and rapid change, these challenges are to date omnipresent.
Based on our vast experience and extensive expertise in corporate risks, I consider these complex changes as systemic risks. I have categorised them as ecological, geopolitical, technological, and social transformation risks.

The 4 Risk Changers

Unlike the tangible assets in former years, it is now the intangible assets which increasingly influence the transformation of companies’ risk environment. The major challenges for a forward-looking risk management are posed less by the concrete individual risks at an operating level but more by the abstract systemic risks which are caused by global events and external developments.
Central to my view are the effects of this systemic change on the risk situation of companies. Also, I differentiate between primary and secondary transformation risks.

  • Primary transformation risks derive directly from the risks associated with systemic change. For example, the impact of the war in Ukraine on the supply of energy and the development of prices in Europe are a result of geopolitical transformation.
  • Secondary transformation risks are typically speculative. They include both risks and opportunities and derive from the metamorphosis which companies have undergone because of systemic change. The aim is to emerge from the crisis stronger than before and/or take advantage of the new opportunities presented by this change. The resultant new risks – despite being abstract – are of great significance and cannot be ignored. They must be viewed from a holistic perspective.

How systemic change affects insurance

Primary and secondary risks tend to increase during a transformation process. They evolve over time. At the beginning, these transformation risks can only be identified with great difficulty. Most of the time we tend to pay less attention to them. Only when they reach a specific threshold, when we become aware of “soft signals”, can they be identified as such and dealt with by risk management.
As is the case with conventional “emerging risks”, the required risk assessment, however, lacks experience, i.e. it lacks historical data and information, presenting an obstacle for analysing transformation risks.

When developing suitable risk management strategies, the attempt to transfer these risks to the insurance market as part of the development of suitable risk management strategies is bound to fail in most cases. The principle of insurability applies. This means, a risk must be measurable for the insurance market to secure adequate capacities. If there is no measurability – as opposed to the maximum loss calculation in the case of fire risks, where the possible maximum loss (PML) represents the maximum expected damage caused – it will be determined based on data modelling of historical risk and claims as well as on actuarial assumptions.

Transforming risk landscape affects insurability

Since new risks and transformation risks lack the required historical data, there is usually also a lack of availability of insurance capacities, especially in their uncertain early stages of development. Adequate insurance solutions (can) only come into being over time.
The current systemic transformation leads to numerous new and changing risks which cause companies’ risk landscapes to change permanently and at an increasingly rapid pace. These dynamics now result in less and less insurance for operational risks, which in the past were adequately and successfully insured.
Thus, as the gap between the lack of insurability and company risks continues to widen, there is an urgent need for the implementation of new methods in risk management.

A transforming risk landscape is often ignored

In practice, many risk management systems that have been implemented only manage concrete risks which already exist. Due to a lack of both early-warning mechanisms and the outside perspective on systemic change and its global events, the risk analysis focus is still on the known and assessable risks. The attention is on the actual situation of the risk environment.
Today’s abstract risks, i.e. risks which still evolve as a result of the changing business environment and have therefore not yet occurred or new risks arising from strategic changes in the business model that aim at seizing new opportunities, are often ignored. In practice, the resultant transformation of the risk landscape is hardly ever anticipated. It is only dealt with once risks manifest themselves because that is when they can be identified and assessed accordingly.
So, how can risk management help to tackle increasing volatility, uncertainty, complexity, and ambiguity and, in turn, boost the resilience of companies? An effective approach that facilitates an agile management of abstract transformation risks needs to be implemented. Existing risk management processes must widen their scope and perspective with some type of risk forecasts, enabling risk managers to anticipate risks at an early stage and allowing them to better prepare themselves.

Agile approach to anticipate transformation

Quite often, we encounter situations where a company’s risk management is organised in closed administrative departments which function like silos that were put in place to comply with legal requirements. Because such risk management deals with risks at an individual level only, its benefit as a company-wide tool to effectively manage risks often fails to achieve its full value.

Systemic change - Primary and secondary risks

The agile management of risks and opportunities is based on a corporate culture that is open-minded towards such risks and opportunities and is organised around transparency, dialogue, trust, and constant feedback cycles.
It comprises interdisciplinary teams whose members act with utmost flexibility as and when needed and who are an integral part of strategic and operative decision-making processes.
That way, transformation risks can be anticipated and acted upon at an early stage. This boosts the resilience of companies, enabling them to make the most out of future opportunities.
Anticipating transformation risks at an early stage means viewing the world from a future perspective and interpreting the inherent risk situation in the best possible way. Paying attention to soft signals, like new and shifting trends, as well as an open-minded attitude towards strategic considerations helps the establishment of effective early-warning indicators to manage risks.

Agility drives insurability and strengthens resilience

As a risk specialist, it is our vision to manage the risks of our clients in such way that they can rest assured and focus on their core business.
As a loyal and trustworthy partner, we work for and with our clients in flexible, interdisciplinary teams where we prove our transparent, dialogue-driven culture every day.
We anticipate systemic change and proactively direct our organisation towards the future needs of our clients. Agile risk management plays a key role for us.
In future, our progressive service approach will focus even more strongly on anticipating any change and resultant risks at an early stage.
HORIZON – “Risk Thought » Fast Forward” is our platform for risk-thought leadership. It follows our ambition to anticipate systemic change at an early stage, drive the insurability of a transforming risk landscape and create value through tailored solutions that strengthen our clients’ resilience and protect their future ventures.
GrECo, matter of trust.

Georg Winter


T +43 664 962 39 06

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Investing in Backup Systems to boost resilience: Interview with Mariana Kühnel

Mariana Kühnel, Deputy General Secretary of the Austrian Chamber of Commerce spoke with Georg Winter, CEO GrECo Group about staying calm in these unpredictable times and how Europe can gain comparative advantages in the age of geopolitical transformation.

Winter: Recently you have been present in the Austrian media, speaking about the situation of Austrian companies in the Ukraine in view of the war. Does the war in the Ukraine show us the dramatic face of a new political world order?

Kühnel: Austria’s economy has been remarkably resilient so far in the face of the unstable geopolitical situation. But of course, there are continuing downward risks to the Austrian economic development, most pressing in the Energy sector. Energy prices in Europe are currently higher than in other parts of the world, massively hampering economic growth.
Given the current geopolitical situation and the increasing instability of existing supply chains, the EU needs to find viable alternatives and more than ever engage with up-and-coming regions such as Latin America & Southeast Asia. EU trade agreements not only ensure better market access for goods, services, and investments in third countries, but are also an important tool to mitigate negative socio-economic developments. They help strengthen the economic resilience of businesses by providing opportunities for much needed supply chain diversification.

Winter: The war also made us aware of Europe´s dramatic energy dependency, particularly on Russian natural gas. How can the economy become independent and mitigate this risk in the medium to long term?

Kühnel: A warm winter and our strong efforts to store gas helped us to avoid energy shortages. But the current crisis is not over yet. To reduce our dependency from Russia, we need to further diversify our energy supply. On the one hand by accelerating the deployment of renewable energy in Europe, on the other hand by building up new energy imports routes. In addition to improving energy efficiency and the availability of renewable electricity, we need to invest in back-up systems, climate-neutral gas, and liquid energy sources to compensate for the resulting volatility. Especially with the goal of climate neutrality by 2050 in mind, we need to employ all alternatives that can contribute to the reduction of greenhouse gases and embrace the principle of technological openness.

Winter: With the new Inflation Reduction Act (IRA), the United States are currently attracting numerous European companies to invest overseas., in particular in the field of renewable energy and infrastructure. What chances do you see and how should the European Union react to avoid the danger of de-industrialization in Europe?

Kühnel: First and foremost, it is important to stay calm. A subsidy race between the EU and the United States is the last thing we need right now. As far as the level of funding is concerned, we see that existing EU funding is in no way inferior to the IRA. However, the IRA comes with much less regulations and bureaucracy than we have here in Europe. Therefore, we can actually learn from the US in this regard, on how a policy design for the EU could look like. In addition, the IRA mainly focusses on mass deployment of green technologies rather than innovation. By focusing on early-stage development and increasing EU resilience to trade disruptions the EU might gain a comparative advantage in the medium to long term.

Winter: The United States are also gaining in importance for European companies in view of the cooling relations with China, which is confidently promoting its role on the global stage. The Chinese Belt and Road Initiative for instance demonstrates the future balance of power. Strategic competition between the U.S. and China is driving global fragmentation as both focus on boosting self-reliance, reducing vulnerabilities, and decoupling their technology sectors.

While China was one of the most promising trading partners just a few years ago, companies are now faced with political unpredictability resulting in unreliable supply chains, to name just one effect. Taiwan is another key flashpoint. How do you see the future development of foreign trade with China?

Kühnel: In these unpredictable times we are currently living in, we can observe a trend that companies are looking into diversifying their markets and supply chains. However, China will remain an important player on the world economic stage given the sheer size of its market. Although 2022 was a tough year for Austrian businesses in China, our trade relations actually increased. From January until November Austrian exports rose by 9.6% and imports registered a plus of 33%.

Winter: Do you see trends that the lessons learned from the supply chain problems over the last few years will lead to a relocation of production back to Europe, for example Eastern Europe?

Kühnel: We have indeed learned that, in addition to efficiency, we need to pay increased attention to resilience and the reduction of strategic dependencies in our international trade relations. Various legislative initiatives at the EU-level, such as the European Chips Act or the Critical Raw Materials Act, are designed to do exactly that. In addition, it is important to also expand our trade relations with like-minded partners and promote global cooperation.

Winter: The European Union has been negotiating an association agreement with the Mercosur countries (Argentina, Brazil, Paraguay and Uruguay) to create stable and predictable rules for trade in goods, services and investments. In 2019, an agreement in principle was reached. What is the strategic relevance of those countries for European companies and which other territories should be on the radar for the future?

Kühnel: Europe is deeply connected with Latin America by common languages, culture, and commerce. We are like-minded partners with shared values and interests. Faced with an unprecedented multitude of crises, it is crucial to deepen our economic ties with this up-and-coming region. In addition, global climate concerns require urgent and coordinated action to ensure a transition toward clean energy. The access to critical raw materials, is one of the preconditions for the digital and green transition in Europe. We should therefore secure our resource supply channels through EU trade agreements.
With regards to other areas of strategic interest, the EU is currently negotiating with Indonesia and Australia. We hope that also negotiations with the Philippines, Thailand and Malaysia will soon continue. These potential markets offer great potentials for Austrian businesses. Indonesia and the Philippines combined have over 380 million inhabitants and in the case of Australia offer important resources like Lithium, cobalt, and rare earths metals. When it comes to Africa, there is also a geopolitical need to strengthen the EU’s presence on the continent. In the past we have seen increasing engagement of China and Russia on the continent, mostly to the detriment of the traditional close ties to Europe. Therefore, deepening and improving EU-Africa relations should be a priority.

Winter: Companies in all industries are struggling to find new employees. In view of the demographic developments, there are clear signs of a dramatic shortage of workforce in Europe. On the other hand, fewer and fewer people are willing to work full-time. What are the most urgent actions for both, companies and politics and what role will migration play in the future?

Kühnel: The demographic development and the resulting lack of skilled workers is really challenging for Europe. In Austria, the number of 20- to 65-year-olds is said to decline by 244.000 by 2040. Much more needs to be done to allow companies to fill their vacancies and to close this developing gap. Apart from tapping the domestic potential, by increasing the number of women in full time employment and by mobilising older people, a clear focus must be put on developing a qualified migration policy.

Georg Winter


T +43 664 962 39 06

Mariana Kühnel

Deputy General Secretary of the Austrian Chamber of Commerce

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Pillar of Our Strategy Is Specialisation – Interview With Georg Winter

Georg Winter Interview

Georg Winter, who has been a member of the executive board of GrECo International Holding AG for almost 10 years, has been appointed CEO this year. In the following interview, Winter offers some insights into his vision for GrECo. Interview was originally published in Lockton Global Partners Magazine.

How did you come across the insurance industry?

Winter: After I had concluded my Master in Industrial Engineering I gained a few years’ experience in the industry. In 2004 I started as a risk engineer for a major global insurance broker. In more than five years I had the chance to survey many production facilities, learning about operational risk management as well understanding the key elements and risks of various industries.
When I look back at the beginning of my career, I am very happy now that I started as a risk engineer. Because “risk” is the topic that is getting more and more important in the insurance industry. Managing them requires much more than traditional methods of risk management.

GrECo has made a great development in the last years and on top acquired MAI, another major broker in CEE, last year. How will you move on together?

Winter: I already had the chance to meet many MAI colleagues in different countries within the last months, they are great people. I think that our two cultures are quite similar, it is a good fit. So, building on two strong and similar cultures means that we are getting even stronger – Stronger Together!
Regarding our knowledge and experience we also complement each other. MAI has a long history and strong capabilities in servicing international clients as well as an excellent Health & Benefits team. GrECo on the other hand is also strong with local clients and focusses on dedicated industries –our specialty approach.

As CEO you are responsible for the future course of GrECo. What are your plans in these uncertain times?

Winter: It is indeed a difficult and challenging situation that raises many most pressing questions. We need to discuss them, their impact on the transformation of the risk landscape as well as possible solution scenarios. It is based on our vision to detect the impact of these changes at an early stage and introduce risk management solutions that boost our clients’ resilience.
Another pillar of our strategy is specialisation. We need to speak the language of our clients in order to look into the risks and challenges of them in more detail. This is the only way to provide them with progressive and tailored solutions for their sustainable future.
Speaking of sustainability, this is also a major topic for our future as well for our client base. It is my profound belief that we need to change our way of doing business in order to leave behind a livable earth to the next generation.

How do you attract people of this next generation to work for GrECo?

Winter: I think that GrECo is a great place for great people. We have the right size and as a family company everybody has the chance to work entrepreneurial and bring in ideas. We also developed a sophisticated internal learning & development programme within the GrECo Academy in the last two years. We know that lifelong learning is a major factor for this generation.
We are working on many more projects to increase our employee proposition, from hybrid working to employee wellbeing offers as well as diversity & inclusion, environmental performance and social commitment. All this together will build the strong employer brand GrECo.

Who is Georg Winter in private?

Winter: I am happily married and live in Vienna, a wonderful city in the heart of Europe. As often as possible I try to do sports such as swimming, hiking and skiing (as Austrian this is kind of a must). During my studies I even worked as a voluntary fire fighter!
I am also interested in private life in innovative ideas and projects that transform our world, i.e. sustainability on all levels. I think that each private individual can do his or her part to improve our world. When I find some time you can also find me in the kitchen with a cooking apron preparing fine Viennese pastries.

Georg Winter


T +43 664 962 39 06

”The World Is in Big Trouble.“

Our CEO Georg Winter shares his views on why geopolitical transformation is our focus this year and why it exacerbates existing risks and causes new risks to emerge.

Secretary-General António Guterres made this statement at the General Assembly of the United Nations on 20th September 2022 in New York.

We are undergoing times of permanent change, which many refer to as systemic transformation or multiple crises strung together. This change takes place in different fields and segments. They, in turn, are interlinked at various levels. HORIZON’s risk-oriented approach aims to define and outline the key areas of change affecting your company. In doing so, we take a close look at the systemic influences of ecological, geopolitical, technological and social transformation on your company’s risk landscape.

The 4 Risk Changers

The 4 Risk Changers

These transformation processes are very dynamic, they are often interdependent and thus characterised as complex processes. They also result in systemic risks. Managing them requires much more than traditional methods of risk management.

In terms of risk management, we refer to these systemic risks as “risk changers” that directly affect companies and categorise them as follows:

  • “Environment in danger” for ecological,
  • “Beyond globalisation” for geopolitical,
  • “Digital transition” for technological and
  • “Social disruption” for social transformation.

HORIZON – “Risk Thought » Fast Forward” is our platform for so-called risk thought leadership. It is based on our vision to detect the impact of these risk changers at an early stage and introduce risk management solutions that boost our clients’ resilience.

How do the 4 Risk Changers affect companies?

Companies are exposed to various kinds of risks. At the same time, systemic transformation exacerbates existing risks and causes new risks to emerge. These primary risks have a direct bearing on companies.

 How do the 4 Risk Changers affect companies?

Primary risks – Transformation leads to direct exposure

Ecological risks
When we look at climate change, we refer to climate risks. They are apparent in form of a changed or an increased exposure to natural disasters, such as floods, storms, hail as well as heat, drought or a rising sea level. As far as companies are concerned, these risks can cause anything from material damages to disruptions of transport routes, in energy, or raw material supplies.
Geopolitical risks
Geopolitical change, characterised by an economic bloc having been established between the USA and China, has put free world trade to the test. It also shows, by looking at Russia’s invasion of Ukraine, just how quickly a system conflict, which we thought had been settled between the democratic and autocratic world, can be reignited. All that, exacerbated by global events, like the Covid-19 pandemic, puts pressure on the availability of energy resources, disrupts supply chains and leads to a global wave of price hikes that challenge governments, businesses, and the civilian population alike.
Technological risks
Technological change has resulted in an over-dependence on data, software and IT infrastructure. All are targets of a rapid increase of cyber threats all over the world and are thus one of the biggest threats of the 21st century.
Social risks
The growing divide between rich and poor, the lack of equal opportunities regarding age, ethnic background and nationality, gender and gender identity, physical and mental abilities, religion and ideology, sexual orientation and identity as well as social backgrounds increases social tensions. The Club of Rome deems equality and justice as part of the ideal solution for a liveable future.

Companies cannot shirk their responsibility in this regard. For instance, social issues are becoming more and more important as we are facing an inevitable demographic change that has already resulted in a systemic shortages on the job market.
The interdependency of these systemic risks is best demonstrated by the war in Ukraine: From a geopolitical point of view, it has led to an energy crisis. In terms of technology, it has led to an increasing number of cyber threats. On top of that, well-targeted campaigns are aimed at splitting society and disturbing social peace in our Western world. From an ecological perspective, however, there is hope that our efforts to reduce carbon dioxide emissions can finally be carried through.
Systemic change – Primary and secondary risks

Systemic change - Primary and secondary risks

Secondary risks – Adaption creates new chances and challenges

Besides these primary transformation risks, which affect companies as “pure risks” from the outside, systemic change leads to secondary transformation risks that are “speculative”. They derive from companies’ adapted business models that were developed in response to the systemic change and comprise both risks and opportunities.
Ecological adaption
In the fight against climate change, many companies have decarbonised their processes or have developed sustainable products. Saving resources and taking advantage of new opportunities are key focal points. However, new products and processes lead to new risks that must be identified at an early stage.
Geopolitical adaption
As a result of the geopolitical change, companies had to explore new markets and new sources for raw materials and find new ways of attracting both customers and suppliers, while keeping a watchful eye on possible dangers. Although the currently rising energy prices still paint a different picture, supply chains can be shortened through nearshoring. This could very well result in a wave of reindustrialisation in Europe.  
Technological adaption
Technological change enables us to pursue totally new paths. While the automation and digitisation of value chains is gaining importance, the full potential of mergers, transparency, big data, and metadata remains to be exploited. Manufacturers of previously traditional products and services are becoming system providers, goods are being replaced by data, and machines by platforms.
Social adaption
In the past, humans used to be regarded as resources. Now, humans with all their resources take centre stage. The concept of Industry 5.0. does exactly that. It places the human being at the centre to promote and foster diversity, different talents, and activities. Many companies have already initiated a transformation process because employees nowadays attach more importance on meaningful work. They believe that they can make a difference when it comes to resilience and sustainability.

Beyond globalisation – Geopolitical transformation in the spotlight

The upcoming release of HORIZON will concentrate on the geopolitical transformation and therefore looks at all its challenges from various angles.
New political world order
Does the war in Ukraine show us the dramatic face of a new political world order and how does this conflict at the very centre of Eastern Europe disrupt our economic basis?
How will the global trend of bloc formation between democratic and autocratic countries influence companies’ global business activities in the future?
What is the risk of technology being abused as an instrument of power and how could this affect companies?
How will the increasing conflict between the USA and China influence global economic relations?

Energy crisis
Blackout and a cold winter – how can we prepare for a total outage?
Will the current shortage of natural resources ruin Europe’s industry or will an ambitious energy transition turn Europe into a role model for a green global economy?

Supply chain dilemma
Will the geopolitical transformation result in a new era of offshoring, or will regional supply chains and increasing investments in circular economy boost independence and resilience?
How will China´s rise continue – considering its growing regional influence along the new silk road – and what will be the effect of its strategy of isolation as a result of its zero-tolerance pandemic policy?
Is the conflict over Taiwan’s independence a ticking time bomb for the global economy?

Loss of wealth
Will double-digit price increases lead to a decreased standard of living over the long term?
Does high inflation increase the risk of social riots in Europe?
How do these circumstances influence people’s work-life balance and their work attitude?
What does a new wave of migration mean for European companies and their DE&I (Diversity, Equity, and Inclusion) agenda?
It is indeed a difficult and challenging situation that raises many most pressing questions. We need to discuss them, their impact on the transformation of the risk landscape as well as possible solution scenarios.
Stay tuned!

Georg Winter


T +43 664 962 39 06

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HORIZON Risk Thought Platform

We have created Horizon, firstly as a print publication and now as a platform for sharing the latest insights about ongoing transformations. Our risk specialists will continue to provide their expertise and knowledge to shine a light on the challenges of the future.

The complexity of today´s risk environment is changing at an accelerating pace, making risk management even more challenging. We address these challenges by highlighting underlying systemic transformations and their implications for future risk and insurance management in various sectors. We are proud to announce the launch of HORIZON – “Risk Thought » Fast Forward”, our platform for sharing the newest insights regarding these risks.
The platform is based on our vision to detect the impact of 4 significant areas of risk changes early and introduce risk management solutions that boost our clients’ resilience. We created Horizon initially as a print publication and now as a platform for sharing the latest insights about ongoing transformations out of a belief that knowing our risks is the first way to mitigate them.
On the platform, you can read about ecological, technological, social and geopolitical transformations shaping the future. Our risk specialists will continue to provide their expertise and knowledge. Together with thought leading guest authors and clients we will shine a light on future challenges.

Visit our new HORIZON – “Risk Thought » Fast Forward” platform

Our CEO Georg Winter shares his views on why geopolitical transformation is our focus this year and why it exacerbates existing risks and causes new risks to emerge.

Explore HORIZON – “Risk Thought » Fast Forward”

The Austrian road to organic farming

Organic farming in Austria

While agriculture in Austria remains at a very high level and is the world leader in organic farming, it is facing similar challenges to other farming economies in Europe. Challenges relate to a change in the EU’s common agricultural policy and external threats not influenced by farmers in Austria themselves.

Organic farming – overview

Austria has for many years been relying on environmentally friendly farming methods due to consumer expectations and the climatic and climate, and geographical conditions. Austria has consistently pursued a quality policy instead of promoting the highest possible yield per hectare.
At the top of such a defined agricultural policy is organic farming. Austria is recognized as an organic farming pioneer in Europe, and the first organic farms in the world were registered in Austria in 1927, i.e. almost 100 years ago. Austria also became the first country to establish national regulations on organic farming ten years before the European Union adopted similar solutions. The Austrian agricultural philosophy considers organic products much more than just a niche. Austria has already achieved the EU target set in the European Commission’s flagship strategy. Currently, 23% of Austrian farmers benefit from organic farming advantages, while more than 25% of all agricultural areas are managed according to high environmental standards. The main goal is to promote the most ecological use of land to maintain a good quality of soil, water and air for the next generations.
In 2020, more than 10% of supermarket turnover in Austria came from fresh, organic products. Compliance with the requirements for organic food forces the resignation from biotechnology. Austrian consumers do not accept chemical fertilizers, pesticides or genetic engineering (commonly used in other countries). This creates serious challenges for food producers, farmers and input suppliers. Despite the limitation of the use of chemical fertilizers and pesticides, average yields of, for example, maize in Austria are higher than in the United States. High average yields raise legitimate questions about the sense of using chemical growth enhancement. As the Austrian example shows, similar results are possible by increasing the use of organic substances, promoting crop rotation or caring for animal welfare. So far, as the pioneer, Austria has avoided the introduction of genetically modified crops into its agriculture and has managed to maintain sustainable production methods with quality and hygiene throughout the food production process, from the field to the table.

EU agricultural policy – new challenges?

Implementation of the new EU agricultural policy in Austria, according to the current assumptions, would entail significant restrictions on the operation of organic farms, constituting a significant share of the total number of Austrian farmers. This is now the main concern and point of contention in talks between farmers and the Austrian government.
Notwithstanding the above, Austrian entrepreneurs are currently facing the following challenges:

  • Ownership structure, based on small and medium-sized enterprises: This significantly hinders competitiveness in the European and global market, limiting development opportunities also in the internal market. The small scale of operations limits access to capital and qualified personnel, which results in lower expenditure on new ecological technologies.
  • Poorly developed network of connections between individual entrepreneurs: In Austria, there are several networks of entrepreneurs and clusters, but their cooperation is quite limited. Undeveloped connections hinder the exchange of experiences and the creation of a common research and development infrastructure.
  • Poor dynamics of development in the local market: While Austrian companies are dynamically developing on the international market, a result of a strong emphasis on the export of the ecology and environmental services sector, the local market for ecological services and products has lost its momentum and is not growing as dynamically as 10-15 years ago. Local markets reached a certain limit of growth at the current level of development of the general economy, potentially influenced by the decreasing price competitiveness of organic food. Changes in the global markets may have a further impact on household incomes, adversely affecting the growth in demand for green products and services.
  • Maintaining the profitability of farms after implementing the new EU agricultural policy: Thanks to the government’s agricultural policy, a robust organic farming sector has been built over the past few decades. Running such farms requires much more expensive than in the case of intensive farming, and a change in the method of financing organic farms may disturb their income levels.
  • Ensuring adequate animal welfare: Austria is one of the few countries in the European Union to have legal regulations regarding the welfare of farm and farm animals, adopted in 2004. Regulation and recommendation compliance requires additional effort and resources. Also, the epizootic disease occurrences in Austria and neighbouring countries raise concerns about maintaining livestock production levels in the coming years, especially for pigs.
  • Maintaining the yield of crops, especially with the limited possibility of using chemical fertilizers and pesticides on organic farms: While Austrian farmer productivity is currently comparable to intensive-agriculture farmers, the inevitable progression of climate change may impact growing conditions. On top of the climate change risks, there may be biological threats (new varieties of diseases) that will be difficult to combat due to the limited possibilities of using plant protection products in organic farming.

Overall, while agriculture in Austria remains at a very high level and is the world leader in organic farming, it is facing similar challenges to other farming economies in Europe. Challenges relate to a change in the EU’s common agricultural policy and external threats not influenced by farmers in Austria themselves.

This article is a part of our Foodprint publication focusing on issues and risks facing the Food & Agriculture industry. Read the publication and learn more about insurance solutions and the growing importance of risk management and alternative solutions like parametric insurance.

Related Insights

Georg Winter


T +43 664 962 39 06

Everyone wants to get back to nature, but no one wants to walk it …

… when it comes to the ecological footprint. The current question is: Can risk management contribute to more sustainability, and will the achievement of ESG goals even become a criterion of insurability?

Hardly any company today is not concerned with its ecological footprint. The decarbonisation of production processes and supply chains, the efficient use of energy and the sparing use of valuable resources such as land, water and raw materials are prominent topics on the corporate ESG agenda.

Transformation of the risk landscape

In addition to the challenges and consequences of climate change, other systemic risks are also changing our environment. The opportunities and risks of digitalisation, the effects of Covid-19 on the state, society and the economy, but also the demographic development with the resulting shortage of skilled workers in many industries, are leading to a fundamental transformation of the risk landscape of many companies.

The classic risks consist of tangible assets that can be reported on the balance sheet, such as factories, real estate, machinery and inventory. In 1975, according to an annual study by Ocean Tomo, 83% of the total market value of companies in the Standard & Poor’s 500 stock index was made up of tangible assets. To date, this share is steadily decreasing and was a meagre 10% in 2020. This means that the value of a company today is predominantly composed of intangible assets such as intellectual property, networks, brand values, data and customer relationships. These assets are now largely at risk. Sustainable risk management must take this shift in risk into account. Are domestic companies meeting the transformation of their risk landscape with the necessary attention? Are resources being used in a targeted manner and new solutions for managing and financing these risks being developed, or are they continuing to haggle over percentages at the insurance bazaar in order to pass on the (classic) risks that are receding into the background as cheaply as possible?

Does sustainability change risk?

Today, investments in sustainability are among the most important drivers of innovation. They generate additional growth opportunities and thus contribute to increasing value creation. But what does a company’s sustainability agenda mean for risk and insurance management?

Decarbonisation at the centre

It is clear that investments to achieve specific ESG goals have a direct impact on operational risks. A key issue in the fight against climate change is the decarbonisation of production processes and supply chains. The replacement of fossil fuels with alternative energy sources or carriers is creating new risks in industry. The use of green hydrogen instead of coal in the steel industry or the use of electricity to fire rotary kilns or tunnel kilns poses completely new challenges for business continuity management. The failure of the power supply after a supraregional blackout not only impairs the continuation of operations of many industrial plants, but in some industries also harbours a considerable property damage potential, for example due to the sudden shutdown of automated processes.

For many manufacturers, the recyclability and reusability of the raw materials and materials used is a top priority when developing new products. The sustainability of the supply chains plays a central role here. The requirements for quality management also change when secondary raw materials or completely new materials are used. The product itself and its use becomes the carrier of specific ESG goals. In the textile industry, for example, new materials or processes are introduced to change the properties of the products so that garments need to be washed less often, thus reducing water consumption.

Comprehensive business model

In order to survive in global competition, many companies have expanded their business model. New competences are integrated, and the company is thus positioned as a platform for holistic solutions. In addition, the involvement of suppliers in the implementation of ESG goals is essential. Producers therefore often act as consultants to their own customers in order to contribute their expertise in the area of sustainability along the supply chain. The paper industry, for example, supports its customers in the food sector with innovative solutions for recyclable packaging. All these developments bring with them changed risks in terms of operational and product liability. The expansion of a building materials producer’s value chain through additional services, such as consulting and planning in energy-efficient construction, also leads to new asset loss risks that must be considered in sustainable risk management.

Investments in sustainability can even be interpreted by the insurer as an increase in risk and thus as a disadvantage. Adequate risk and insurance management must make a significant contribution to managing negative risk changes.

The European Commission adopted an ambitious and comprehensive package of measures in April 2021, including the Delegated Regulation on EU Climate Taxonomy, to help channel more money into sustainable activities within the EU. This regulation will enable investors to invest sustainably and contribute significantly to Europe’s climate neutrality by 2050.

First measures by the insurance industry

The insurance industry is also taking the first steps towards climate neutrality. In the Net Zero Insurance Alliance (NZIA) initiated by the United Nations, eight of the world’s leading insurers and reinsurers have committed to individually convert their insurance portfolios to zero greenhouse gas emissions by 2050. Furthermore, due to better capital costs, a greening of underwriting can be expected, which will lead to an increased availability of capacities for sustainably operating companies.

Sustainable risk management

The idea that companies with ambitious ESG targets also represent a better risk for the insurance market is gaining traction. For this reason, there are already first announcements to provide capacity for ESG-performing companies. Statistics clearly indicate that climate change will lead to a significant increase in insured losses from natural hazards. The situation is similar for fire losses, where the share of insured losses from overlapping forest fires will increase significantly.


In a climate-neutral economy, sustainability-based risk management will be an important component of a future-oriented risk management strategy. As a risk specialist, GrECo develops progressive ESG models to increase the resilience of its clients and accompanies them with innovative solutions into a sustainable future.

What is ESG, please?

Environmental Social Governance (ESG) is the umbrella term for the new standard of corporate environmental, social and ethical responsibility. This topic has gained new momentum, especially since the introduction of the UN Sustainable Goals. The three letters ESG describe three sustainability-related areas of responsibility.

E stands for Environment. It refers to pollution, environmental hazards, greenhouse gas emissions and energy efficiency issues.

S stands for Social. This refers to occupational safety, health protection, diversity and social commitment.

G stands for Governance: This refers to corporate values, compliance, steering and control processes and risk management. Each company can determine and weight its ESG goals itself. However, due to the increasing importance of ESG for investors, public pressure on companies is also rising. In the meantime, ESG criteria are also being included in the analysis of securities.

Related Insights

Georg Winter

CTO GrECo International Holding AG
Risk & Insurance Technique

T +43 5 0404 335