Global reinsurers strengthen disaster risk resilience

According to a new report from the Global Reinsurance Forum, insurance is one of the main financial tools to shore up resilience in the face of the unthinkable.

Large, unpredictable, and costly disasters are inevitable. But global reinsurers play an essential role in absorbing disaster shocks by providing predictable financial relief and strengthening societal resilience. This is according to Global reinsurance: strengthening disaster risk resilience (PDF, 6.34 MB), a new report published by the Global Reinsurance Forum (GRF). Swiss Re is a member of the GRF and Group CEO Michel Liès is the Forum's chair.

The last decades have brought unprecedented improvements in human wellbeing, growth and mobility. But in a world where physical, financial, and information systems are ever more interconnected, risks are becoming more complex in their form and more widespread in their impact. The GRF report details how reinsurance can play an important role in reducing disaster risk not only now, but in the future.

Taking the long-term view

Reinsurers look for indications of emerging and future risks such as climate change, infectious diseases, technological and cyber risks. But reinsurers do not only operate on the risk side: the pooled nature of their capital commitments also makes them important global investors, whose long-term view adds stability to financial markets.

Global reinsurance: strengthening disaster risk resilience also discusses the importance of regulation and supervision.  Both areas have a key role in ensuring that the reinsurance market works effectively in terms of risk sharing/pooling and long-term investing.

Extensive expertise in assessing risks

Financial regulation is rapidly evolving. The reinsurance industry relies on the regulators to maintain certain key conditions during this time: to allow international risk transfer, free trade and free capital flow; to ensure legal security and regulatory harmonisation; to incentivise long-term investment; and to foster collaboration between the industry and the public sector. "Global reinsurers have extensive expertise in assessing and managing current and future risks and creating insurance solutions that absorb risks," says Swiss Re Group CEO Michel Liès.

"New forms of public-private partnerships can help societies absorb the financial consequences of catastrophic events and make them more resilient."

The GRF, a consortium of 12 reinsurers, is committed to maintaining active dialogue with policy-makers, regulators, and other stakeholders with an interest in anticipating, mitigating, and adapting to today's and future risks, enabling society to advance further.

Learn more about the importance of reinsurers in building resilience. Download Global reinsurance: strengthening disaster risk resilience.

Published 15 September 2014

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