Re/insurance remains a stabilising force in the face of major global disruptions, absorbing shocks and supporting economic recovery, according to industry giant Swiss Re.
According to the reinsurer, the renewals discussions will focus on the rapidly changing environment and persistent uncertainty impacting the re/insurance market, creating volatility and challenges in the assessment of risks, along with the transformative impact of artificial intelligence.
Urs Baertschi, Chief Executive Officer P&C Reinsurance, commented, “In a time of elevated global uncertainty and rapid adoption of AI, re/insurance stands as a stabilising pillar. We look forward to engaging with our clients, partners and the public sector on how to further strengthen resilience, harness technology and address the evolving challenges of a changing world.”
The accelerating impacts of extreme weather remain at the forefront of industry concerns. According to the Swiss Re Institute, the combination of economic growth, claims inflation, and more intense perils has pushed annual insured natural catastrophe losses well above $100 billion in the past few years.
Now, there is an increased possibility of annual insured losses accelerating to $200 billion or even $300 billion in a peak year, according to the reinsurer.
The increased losses highlight the need for preventive measures such as improved zoning, building standards, and advanced risk modelling, according to Swiss Re.
Simultaneously, strong partnerships between the private and public sector are critical.
The reinsurer stated, “Collective investment into loss prevention and weather resilience will be essential to help mitigate future risks. It is also important that the industry continues to build on the solid foundations of reliable data and increased risk transparency across the value chain.”
Swiss Re emphasises the importance to adopt a holistic understanding of risks and to focus on accumulation management and disciplined underwriting to navigate the current uncertain geopolitical environment.
Geopolitical tensions, protectionist policies, and shifting economics are reshaping global supply chains, raising costs, amplifying uncertainty, and increasing the risk of long-term fragmentation. Additionally, there has been an increase in strikes, riots and civil commotion globally, in the last year, over 70 countries have experienced significant protests.
According to Swiss Re, AI brings a “transformative opportunity” for the re/insurance industry, outpacing initial expectations. In a business where the vast majority of information resides in emails, submissions, contracts and claims files, the ability to process and learn from unstructured inputs is no longer a technical aspiration, but a competitive requirement.
Gianfranco Lot, Chief Underwriting Officer P&C Reinsurance, added, “In the face of increasing risks, data will become even more important. It’s the basis for risk and accumulation management, and AI will be a game changer. At Swiss Re, we see it as our responsibility to bring together our expertise, technological capabilities, and partnerships – to help turn ambition into reality.”
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