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Mar 2024

Insurance CEOs buckle up

Source: Asia Insurance Review | Feb 2022

Many leading CEOs in the insurance, reinsurance and risk sectors will have heaved a sigh of relief at the closing of 2021 – in the fond hope that 2022 would prove to be less punishing that the year just gone.
 
On the upside, everyone is getting better at coping when something calamitous happens. When calamities become the norm, we learn to expect the unexpected and have some sense of how we will claw our way back from the brink. But it doesn’t do much for quality of life.
 
The biggest challenges facing our industry are broadly the same as they were this time last year. Cyber is still the bane of business and consumer alike. The bad guys are ever active and they don’t appear to take time off. Headlines from the Singapore media over the festive season make for scary reading – as regular bank customers find themselves wiped out financially by the bad guys.
 
Climate has ceased to be a risk that solely affects other people. Only the very fortunate have not had some first-hand experience of a flood or a fire or a drought or a typhoon. If we add on Nat CAT that are not directly related to climate change, such as tsunamis, earthquakes and volcanic eruptions, the undeniable conclusion is that the planet is sending us a very clear message.
 
Increasing political risk seems to be dovetailing with supply-chain disruptions to cause a rising sense of anxiety in both political and business leaders – which inevitably spills into the media, causing entire populations to develop increasingly polarised views of the future.
 
Interest rates will start a long climb at some point this year – as soon as the US Federal Reserve makes it full intentions known. As ever, this will prove to be both a positive and a negative – but at least it is a risk for which economists offer endless models. Inflation will be an inevitable side-effect.
 
The pandemic – truly the gift that keeps on giving – is also showing us new ways to disrupt business and distort business plans with the latest iteration hammering businesses that want to open but cannot because staff are recovering from Omicron or self-isolating because they have been at an exposure site.
 
Meanwhile technology marches on, offering insurance, reinsurance and risk professionals a better way to do business – or a quicker way to fall behind the competition. Never before has the tech team been kept busier – incorporating lessons learned from the gaming industry into the way they develop, package and deliver insurance solutions.
 
But the CEOs that survive and thrive in the year ahead will be the ones that know that the present level of disruption is not a one-off that will recede. They know that this is how business life will be in the future on a constant and rolling basis. In other words, this is as good as it gets.
 
Forward planning will remain essential – but so will planning for frequent and seismic disruptions. Business intelligence coupled with nimbleness and brilliant marketing will be the way forward.
 
Welcome to the working week.
 
Paul McNamara
Editorial director
Asia Insurance Review
 
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