Resilience 2.0 – building a society that can bend rather than break
No-one reading this needs a reminder that catastrophe has been the defining theme of 2020.
Within the insurance sector, however, we have one eye on dealing with the immediate effects of the hardships of the year, and the other on promoting a stronger, healthier society and structures for the longer term so that events like pandemic, fire and flood do not inflict such damaging wounds as they have.
For that reason, resilience continues to be the key theme for Swiss Re this year.
The type of thinking and behaviour that resilience inspires also influences our thinking around the other upheavals of 2020. We envisage a society where debates over race, equality, technology and economic development can be adequately heard and addressed.
I’ve been part of the insurance industry for more than 20 years and building resilience has always been at the centre of everything we do.
This year, our annual Swiss Re Institute Macroeconomic Resilience Index revealed that COVID-19 will lead to global resilience falling by around 20%. That may not come as a shock. What it exposes, however, is that COVID-19 does not exist in a vacuum. Combined with the existing issues of mortality, health and natural disaster risks, we saw the combined protection gap reach a new high of USD 1.24 trillion.
Considering resilience does not merely speak to the pressing issue of COVID-19. Rather, we must consider the effects on society when existing issues such as climate change, increasing natural disasters, worsening mental health, and an increasing wealth gap are intensified by the pandemic. The effects of disasters can rarely be attributed to a single factor, and we need to focus on building a society that can bend rather than break. We cannot afford to create a lost generation.
Insurers and reinsurers are naturally placed to ask the tough questions of how to adequately respond, and how to ensure society is still confident enough to take the risks it needs to in order to develop and improve. As Swiss Re’s chief economist Jerome Haegeli noted, ‘The widening global protection gap is a huge opportunity for insurers to fulfil their mandate as risk absorbers and improve societal resilience’.
But how do we rebuild resilience after such an extraordinary year?
The economic recovery will require a huge commitment, financially and otherwise. It will require a collaborative effort between the private and public sector – something we have seen positive examples of here in Australia and New Zealand already. Two examples spring to mind, One being the collaboration between our industry and the Master Builders Australia (MBA) that focuses on strengthening homes and communities against natural disasters and the other being the discounts offered for more resilient homes that have been supported by State government grants. We need more of such initiatives across the value chain, corporations, governments, educational institutions all working together to build more innovative solutions for this complex situation.
To turn the discussion to a more personal topic, resilience has been a constant theme for team leaders as we navigate 2020.
I have been encouraged by the positive attitude of our Australia and New Zealand teams. Though, I am mindful not to take this for granted and remind myself to constantly ask my colleagues 'How are you today?'. I know the pressures do not stop at the physical health effects of the pandemic.
Resilience and mental wellness go hand in hand. While I have witnessed such a positive response to supporting mental wellbeing by our industry and government in Australia, and I hope this continues. The effects and support needed for Mental wellbeing should continue to be a priority for us.
I am so proud to be part of the re/insurance industry at such a juncture in our history. We are fortunate to be part of so many opportunities to shape the recovery – at large – of our healthcare systems, environments, and societies as a whole. But we must continue to do our jobs well to ensure we are ready and armed to respond to future risk events.