Political risks of today: should reinsurance reinvent itself for a better tomorrow ?
"Political risks are on the rise, and we have to closely monitor the consequences. The insurance sector depends on the reliability of governments and the stability of financial systems. And we also need market access and the free flow of capital for the optimal diversification of risks," is how Swiss Re's Chairman, Walter B. Kielholz addressed around 200 (re)insurance experts at our annual client event Swiss Re Invite in Paris on 12 June.
Why did we decide to host our event on the topic of Vision and perspective for reinsurance and what are the main points on how Swiss Re's Chairman connected the current geopolitical tensions to our business of reinsurance ?
It's clear that:
- Our industry not only depends on reliability of governments and the stability of financial systems. It also makes an important contribution to economic and financial stability and thus to the resilience of society;
- We protect people and businesses against risks. We also help the governments face new threats;
- Many of the recent developments (Brexit vote, the rise of populism in the US and several European countries, conflicts in the Middle East and North Africa) increased political uncertainty;
- As large investors we contribute to the real economy and strengthen infrastructure. The economic and societal significance of our sector means that – ultimately – we also play a political role;
- The role of France has become increasingly pivotal. The ongoing EU budget negotiations will reveal if the Paris-Berlin axis can be restored or if France drifts towards southern Europe;
- While many of current developments present a rather sombre picture, the world economy has actually improved.
An important take-away from our annual event is that in the near future, we will see the establishment of a new reality in the financial markets. We should welcome this return to "normality", even if the road leading there implies a difficult adjustment process for the insurance industry.
Geopolitical and other challenges will further evolve and there is no doubt that the insurance sector will be able to respond to them and stay relevant – even if this means that we have to reinvent ourselves in the process, is how Mr. Kielholz concluded his speech. And especially because of this, it is even more important that we use the opportunity to get together with our business partners, share the knowledge and engage in dialogue. Only a partnering way can lead us to success in facing future developments.
Location: Paris, France