ISE 2012: Luzzi says firms must think in global terms

He explained: "When the natural catastrophes happened in Thailand some people said: 'Well, I don't have business there.' But increasingly we are finding if people don't they will have a provider that does or a customer, so their business is still affected.

"Today, world events affect business. There is an ageing population, a lack of work in North Africa and the Middle East, technological developments in China, and a scarcity of energy resources.

"These factors all affect how we do business. We need to understand our firms on a global basis."

He added: "We are not alone. We are selling products in a world that has problems. Firms need to prepare their own people and then really know their supply chain.

"Business continuity is about trying to always be in the condition to do business and, if you know all the links in your supply chain, then you may well be successful."

Responding to a question from Chris Smith, global Europe director at RSA, Luzzi admitted that, despite risk management being at the top of the Pirelli management structure, management will still give approval to open in high risk regions so insurers and risk managers need to be prepared to respond.

He said: "Before we establish a factory we analyse the risk and then the decision is taken. The risk management department is not the one that decides where to open but we are a global firm and we have to deal with this."

He added that Pirelli is shortly to open a factory in Indonesia, saying: "This is a huge market. It is the fourth most populated country in the world and we would not stay out of the market just because it has problems. We are prepared to react."