The 21st century has already witnessed a transformational shift in the global risk landscape, with a palpable change in the severity and frequency of events since 2000, warned Willis Chairman and CEO Joe Plumeri.
Speaking to an audience at the InsiderScope London 2012 Conference, held in the Willis Building, Plumeri called for a “repositioning of the insurance industry as the global leaders on resilience and commercial sustainability for companies, organizations and enterprises facing a future of unknowable risks.”
Willis’ report of the event noted that Plumeri has “viewed the new risk landscape evolving over the last decade from the front lines.” He urged his colleagues to view insurance “not simply as a transaction but rather as the natural business partner for clients achieving mitigation of risk and enabling long-term sustainable growth.”
Plumeri stressed that the pace and severity of events between 2000 and 2011, combined with long-term risks arising from challenges such as climate change, growing income disparity, increasing competition for energy resources and the fundamental shift in the global balance of power from the West to the rapidly emerging powers of China, Brazil, India and others, all “symbolize a world which is struggling to find a new equilibrium.”
He described the insurance industry as unique within the financial services sector in having proven its own resilience in the face of the global financial crisis and, more recently, in the response to the record catastrophe losses in 2011.
He pointed out that the insurance market has remained fully operational throughout these crises and those of previous decades, which he characterized as a “testament to the strength and resilience of this capital market.”
Plumeri stated: “Resilience is about managing extreme events, and who better to provide this than the industry which is unique in its approach to the use of modeling and analytics in managing risk? Who else models on the basis of extreme 1 in 200 year events?” He added that this approach had made the insurance industry more resilient to catastrophe and shocks from Mother Nature and man-made markets than any other.
Plumeri pointed out that the growth in risk and uncertainty across the globe was driving demand for the knowledge, expertise and capabilities which were the hallmarks of the insurance industry. He described insurance as the obvious vehicle for delivering resilience, thanks to the combination of risk management and analytical services that are unique to this industry.
He also noted that it was, in effect, the insurance industry’s “responsibility to own resilience and to utilize its leadership position in enabling clients to achieve long-term sustainable growth.”
he also indicated that if the insurance industry is able to rise to the challenge, the situation “represented a significant future growth opportunity for the insurance business.”
Plumeri’s keynote address at InsiderScope 2012 followed presentations from Pat Ryan, Founding Chairman and CEO, Ryan Specialty Group; Charles Franks, CEO, Kiln Group and Sir Laurie Magnus, Senior Adviser & Deputy Chairman, Evercore Partners.
Source: Willis Group Holdings plc