Risk managers will emerge from the financial crisis as heroes against the failure of investment banks and capital markets, says Willis Executive Chairman Joe Plumeri.

Speaking at the Association of Insurance and Risk Managers annual dinner in London, he said risk managers “have never been more important than they are today in helping companies evaluate risk and access capital”.

“In the current economic environment, risk managers will emerge as heroes,” he said. “The failure of investment banks and capital markets means that today insurance may be the only capital available for risk.

“Companies are quickly realising that strong risk management can help them gather that insurance capital at a lower cost.”

Mr Plumeri expects the financial crisis to drive renewed appreciation of enterprise risk management practices, and increased transparency and regulation.

“If everyone was transparent, off-balance sheet issues, structured investment vehicles and credit default swaps would have been found,” he said. “The only stable capital is insurance capital.”

He says insurance capacity and rates will remain static, but is concerned that a lack of money in credit and stock markets will eventually force rates up.

Clients can expect gradual rate hikes during a recession rather than the sharp hikes that followed the US terrorist attacks in 2001, he said.

Mr Plumeri also praised UK regulator the Financial Services Authority for backing mandatory contract certainty – the timely delivery of policies to clients – and called on others to follow the example.

“This is the only industry I know where you shake hands before deciding what you have agreed on,” he said.