Geneva Association Summit 50

Jad Ariss: Opening remarks

Jad Ariss, Managing Director, The Geneva Association

The world is in a state of flux. Populations are ageing at an unprecedented pace; geopolitical tensions are rising; the global economy is increasingly volatile and fragmented; climate risks are intensifying; technology is changing our way of life; and growing inequality within nations is challenging social cohesion. These shifts are transforming the global risk landscape, with many perils increasing in frequency, severity and complexity, as well as becoming more interconnected and intangible. 

The relevance of insurance in such a context is clear – it provides financial protection and peace of mind. It strengthens resilience at the individual, business and societal levels. However, the insurability of some of the most important risks we face today is being challenged, with the growing potential for large numbers of policyholders around the world to be affected at the same time.

In response, insurers are broadening their value proposition by offering a variety of risk services, including prediction, prevention, mitigation and ex post services. This enables them to contain the cost of claims while also responding to evolving customer expectations. Insurers are also stepping up their engagement in public-private partnerships and working to promote sustainable development, for example through impact investing and underwriting.

Antonio Huertas: Keynote address

Antonio Huertas Mejías, Chairman & CEO, MAPFRE

Insurance plays an important role in protecting lives and environments. Despite recent geopolitical and economic challenges, the insurance industry continues to be resilient.

Growing regulatory complexities in Europe create an increasingly challenging environment for insurers to operate in – directives relevant to insurance have risen from 12 in 2007 to 30 in 2023. Digital transformation in insurance, once considered a luxury, is now essential for maintaining relevance and meeting customer needs. AI will be a transformative tool for enhancing skills and driving economic growth, as long as new regulation allows for experimentation and fosters innovation.

The role of insurance in the cyber realm goes far beyond compensation for damages, with insurers increasingly providing risk prevention and mitigation services. This will ultimately help to expand the insurability of cyber risk. Climate change and escalating natural catastrophes call for insurers to leverage their investments to enable the low-carbon transition, including by integrating Environmental, Social and Governance (ESG) factors into decision-making.

Addressing demographic changes and evolving patterns of work requires insurers to adapt and adopt innovative underwriting and pricing practices, as well as design financial products that meet the changing needs of customers. In emerging markets, the social role of insurance has evolved from providing microinsurance to fostering inclusive insurance markets.

Panel: The Future of Health

Melissa Leitner, Swiss Re; Axel Heitmueller, Imperial College Health Partners; Niti Pall, HARBR; Daniel Zimmerman, RGA

While societies and businesses are increasingly concerned about the economic realities of living longer, relatively little focus has been given to health spans, i.e. the number of years spent in good health. Growing climate, environmental and economic uncertainties are putting pressure on health spans, and ever larger sums are being spent on healthcare globally.

The growing complexity and chronicity of illnesses has implications for insurability. Focus on health needs to be recalibrated towards ‘health creation’ as opposed to ‘healthcare’ or ‘curing sickness’. This will require cultural and political shifts; financial instruments that view health expenditure as an investment in human capital; a move away from indemnity-focused models towards prevention and health optimisation; and segmentation of the risks of ill health across population groups to better design and target services.

Technology and data hold much promise in these areas, but insurers need to actively shape service delivery to manage their risk exposure. They also need to use technology to do more than bring new products to the market. This could include creating a seamless experience for customers, improving care quality and, where possible, democratising health through ‘plain speaking’ information to foster healthy behaviours and practices. Old, linear models of healthcare could also be replaced, with approaches that ‘meet customers where they are’ (e.g. shopping centres, banks).

To harness the benefits offered by longevity, insurers will need to go beyond analysing the drivers of disease to look at the factors that define healthy ageing. Longevity should be viewed through a lens of inclusivity and health optimisation to make the most of the societal and economic opportunities it presents.

David Knibbe: Fireside chat

David Knibbe, CEO & Chair of the Executive Board & Management Board, NN Group

Insurers are publishing ambitious climate action plans to hit net-zero targets within the next few decades. Most have begun divesting from coal but continue to invest in oil and gas. Companies producing oil and gas need time to transition and will require continued investment if they are to successfully move away from fossil fuels. Insurers can therefore contribute by investing selectively in oil and gas producers with credible transition plans and ceasing to invest in those who do not show commitment to align with net-zero goals.

Insurers are also increasingly expanding their offerings of risk prevention services. In the health space, driving down sickness rates at the workplace through the application of such services offers significant economic benefits, although applying the model to small and medium-sized enterprises (as opposed to large companies) remains a challenge, as HR departments in these organisations tend to be less developed. Technology is a key facilitator of these services and allows insurers to offer more individualised pricing based on data collected from customers. There are risks associated with such approaches, like the exclusion of certain customers and concerns over data privacy. Regulation will be vital to unlocking the benefits offered by new technologies while minimising these risks.

Panel: What Will Insurers Look Like in 2050?

Christian Mumenthaler, CEO, Swiss Re, and Chairman, The Geneva Association; Rogério Campos Henriques, CEO, Fidelidade; Charles F. Lowrey, Chairman & CEO, Prudential Financial; Jessica Tan, Co-CEO, Ping An

A panel of insurance CEOs – representing America, Europe and Asia; P&C and life; and direct insurance and reinsurance – offered their views on how trends related to demography, geopolitics, technology, sustainability and the risk landscape will shape insurance in the decades to come.

Insurers can adapt their businesses to demographic shifts in two main ways. First, in developed countries where populations are ageing, insurers should increase their penetration with relevant accident, health and retirement products. Second, insurers should further diversify to markets where populations are increasing – and there is business growth potential – to offset the impacts of shrinking populations elsewhere. 

Trust in institutions has been declining over the past 15 years, manifesting in protectionism, a reshuffling of value chains and geopolitical uncertainty overall. Global fragmentation disrupts the system of diversification that re/insurers have long relied on.

Technology has the great potential to expand customer access to insurance as well as reduce costs for insurers. Insurers can leverage AI to help customers make better decisions. Offering simplified products online or via hybrid methods – and using technology to speed up distribution – can increase customer uptake.

Large-language models now use 100s of billions of variables, compared to less than 1,000 five years ago. Generative AI can help prevent claims fraud, as well as increase efficiency. There remain, however, many situations where the ‘human touch’ is necessary.

Pressure is mounting for businesses to become net zero by 2050. For insurers, Scope 1 emissions, those of their own company, and Scope 2 emissions, related to energy, are relatively straightforward. But 95% of an insurer’s footprint is outside its own walls, under Scope 3. Upstream, all suppliers need to be net zero. Downstream, insurers must reduce the carbon footprint of their investments and their insurance policies. Metrics for the latter are much less developed, but progress is expected in the coming years. In the world more broadly, the overhaul needed to decarbonise industrial processes is an unprecedented challenge for humankind.

Finally, will insurability challenges around extreme risks, from NatCat to cyber, reduce the relevance of insurance in 25 years’ time? Protection for tail risks like a pandemic or a nuclear event do require government involvement. In motor, technology is likely to prevent accidents and even theft, so risks may decrease. But the relevance of and demand for other products will continue and even increase – for example, life insurance and liability insurance. Insurers should focus on the sustainability of their businesses, whether that means enduring different economic cycles or diversifying into service-oriented products.

Walter Pasquarelli: Keynote speech
The Age of AI: Charting a course for responsible innovation

Walter Pasquarelli, Cambridge University | The Economist Group

The rise of generative AI – a branch of AI capable of creating diverse outputs from textual prompts – allows the extensive use of internet data, rather than limited datasets, for training models. So far, this has led to the development of generative pre-trained transformers (GPT) like ChatGPT, which can perform a variety of tasks within a single interface.

AI has many capabilities in insurance, such as in claims processing, as well as in text-to-image conversion and text-to-speech conversion for music and videos. But the risks associated with AI are also numerous, including cybersecurity, liability, privacy and data protection issues. As such, the importance of education, auditing and human oversight in AI systems cannot be overemphasised.

AI could also serve as an augmentative tool when it comes to the future of work, creating new jobs and increasing job satisfaction and productivity, rather than simply automating existing jobs.

When it comes to integrating AI into a business, essential considerations are demystification, identifying relevant use cases, developing the necessary capabilities and infrastructure, starting with small pilots, and embedding ethics and trust from the outset.

Panel: Insurers and the Transition to a Resilient and Decarbonised Economy

Lesley Andrea Harding, Liberty Mutual; Tim Ash Vie, HSBC; Joachim Meister, Worley; Renate Strasser, Allianz Global Corporate & Specialty; Tyson White, Breakthrough Energy

Meeting the climate goals of the Paris Agreement will require ‘rewiring’ the infrastructure of almost the entire global economy. However, to date, the capital required to finance these projects is insufficient.

This panel focused on the role of insurance in building and scaling climate tech and innovation initiatives for decarbonisation. Insurers should be engaged as risk managers at an early stage in order to assess and understand project risks. Project developers and entrepreneurs can then adapt their businesses to make them insurable and therefore, ‘bankable’, i.e. enable them to meet financing requirements.

Beyond project developers, insurers should educate and collaborate with various other stakeholders, including governments and financial institutions. The Geneva Association’s own climate tech initiative brings together the different key players, across sectors, to understand and promote the insurability of risks related to green hydrogen and carbon capture storage.

The panel also took stock of insurers’ own decarbonisation strategies and efforts to measure their emissions. Measuring scope three emissions, especially in underwriting, is particularly challenging. The focus now should be on developing methodologies and standards for measurement while also engaging with customers to address data availability challenges.

Panel: Harnessing Technology to Insure More People

Alexander Braun, Institute of Insurance Economics (University of St. Gallen); Raimund Snyders, LeapFrog Investments; Camila Serna, Chubb; Garance Wattez-Richard, AXA Emerging Customers

Insurance inclusivity needs to include not only emerging economies but developed economies as well, with particular focus on individuals that are ‘too rich to be poor and too poor to be rich’.

Simplifying and seamlessly integrating processes, products and distribution strategies needs to be prioritised, with focus extending to the entire customer journey. A blend of physical and digital channels will be required for distribution. In emerging economies, issues around awareness, trust and affordability persist, but increasing digital connectivity – especially among younger generations – provides a major opportunity to address these issues.

While Insurtech is still grappling with headwinds, it already successfully reaches untapped customer segments. Small impacts are having a compounding effect, particularly in the Global South.

Panel: Safeguarding Critical Infrastructure: What role for cyber insurance?

Catherine Piana, Confederation of European Security Services; Ben Ashworth, National Cyber Security Centre; Martin Kreuzer, Munich Re; Ivo Maritz, Monti Stampa Furrer & Partners AG

Public reports of cyberattacks, with physical consequences in manufacturing and infrastructure, have more than doubled annually since 2020. The sophistication of attacks has also increased. State-aligned actors such as terrorists, criminals and hacktivists increasingly use cyberattack vectors to exploit interconnectedness and interdependencies among industrial control systems and within global supply chains to cause maximum disruption, destruction and even bodily injury.

How can countries safeguard critical infrastructure against cyber threats? First and foremost, the operators of essential services must strengthen cybersecurity within their own operations, especially legacy systems. This includes more robust external security perimeters that detect, withstand and contain cyber intrusions, but also rigorous internal procedures that guard against insider threats. This will go some way to limiting the cascading damage on economies that might arise from a major cyber incident at, for example, a key utility, telecoms or financial sector company.

Regulators and policymakers in many countries are pushing for such upgrades in cybersecurity standards in critical infrastructure. Cyber insurance can also play a bigger role in improving firms’ cyber hygiene, although the scale and/or uncertainty of losses that might arise from a cyber incident at a major piece of infrastructure limits insurers appetites/abilities to assume related risks from policyholders. Going forward, increased sharing – among governments, critical service providers and insurance firms – of information and expertise about cyber threats and vulnerabilities will be vital in boosting societal cyber resilience.

Andy Briggs: Closing remarks

Andy Briggs, CEO, Phoenix Group

Businesses are operating in a very difficult environment, with war, the climate crisis and demographic challenges painting a rather bleak picture for the future. Under these circumstances, however, insurers’ core social purpose is more relevant than ever. Insurance companies are uniquely placed to help societies develop solutions to the problems they are facing and to support them when things go wrong. By pursuing purpose-led strategies and standing in the shoes of their customers, insurers can step up their contributions to society, meet evolving customer needs and attract the best talent to their business. It is a huge position of responsibility, but one the industry is privileged to be in.