Sustainability at heart: A conversation with Alison Martin

In a series of virtual events, the UNEP and Swiss Re team up to discuss and progress PSI, UNEP's Principles for Sustainable Insurance Initiative. The first in this series brought together UNEP's Executive Director Inger Andersen with Swiss Re's Group CEO Christian Mumenthaler, as well as Alison Martin (CEO EMEA and Bank Distribution at Zurich Insurance Group), Dr. Maria Neira (Director Department of Environment, Climate Change and Health at WHO) and Mike Mitchell (Head P&S Underwriting Reinsurance at Swiss Re).

Post-event, we had the opportunity to catch-up with Alison Martin, who held various leading positions at Swiss Re, before joining Zurich Group as Chief Risk Officer in 2017, then taking on her current role in the summer of last year.

When you look beyond the current crisis, what makes you hopeful?

With regard to COVID-19, the World War II analogy is often used. If we look at what happened in the wake of that tragic event, we realize that the positives were not just created for that time, but continued afterwards. Just think of women's role in the workplace. It was born out of necessity and has continued to become the norm it is today. I'm convinced that we will carry some of the positives with us into the time beyond the pandemic crisis.

Very positive things are happening for the environment. These days it feels like a rare occurrence to spot an airplane in the sky, doesn't it? Of course, we will travel again eventually, but it will be different – and I do not want to lose what I have gained during this crisis when it comes to connecting with people. Our virtual means are delivering on their promise in ways they never had to previously. I have a team of over 20'000 people, and I could never visit them all. But now we can be connected in ways that we couldn't before. These days I see many more of my colleagues compared to the time when I was flying around the world. I'll definitely want to keep this.

Zurich Group is a sustainability leader – how do you approach the current situation?

Frankly, the COVID-19 crisis hasn't changed our approach. Our strategic priorities (LINK) are clear and robust, they are something we have at our core, and embed in everything we do. As insurers, it's important to remember that we have many levers we can use. There's the underwriting side, the asset side, but there's also our people and the communities we operate in. Now is a time of heightened awareness and I think that we can leverage that awareness to bring everyone together, to work together, for a sustainable future.

At Zurich, we have three sustainability priorities. The first is, unsurprisingly, climate change. The second is increasing confidence in a digital society – we have to make people and organizations more resilient, and we believe this will only happen if there is confidence in a digital future. The third sustainability priority is squarely focused on work. The world is changing, and we must do everything we can to support our employees and our customers in navigating the impact of this changing world – it will fundamentally alter the nature of work.

How can a global crisis such as COVID-19 be tackled by insurers?

Through multilateral responses. Many risks are becoming increasingly complex and interconnected. For an individual, or an individual organisation, these risks are daunting – they are just too big, too difficult, too challenging – and so it would be understandable to shy away from them. But we are in this together, all of us. And it is beholden on each of us, and the companies we work for, to do something. There are steps we can take, and the biggest challenges – such as a pandemic – can only be addressed by public-private partnerships. We now see instances, Germany and Austria are good examples, where the insurance industry works hand in hand with governments as a way to provide real-time aid.

What's really needed, of course, are long-term solutions. Across Europe there are systems in place that might be adapted to enable greater resilience in the wake of a future pandemic. Many countries have public-private partnerships to protect against natural catastrophes, or terror – we can learn from existing schemes and must build new pandemic-focused public-partnerships without delay. Pandemics have happened in the past, and COVID-19 won't be the last – that much is certain.

Tell us more about the digital transformation, a key component of Zurich's sustainability priorities

This is, to our mind, as fundamental as the changing climate. The future is digital and that impacts everyone across the globe, every individual, every company, every organization and every government. We must create an environment that inspires confidence in such a digital future. The transformation is happening as we speak and, at Zurich, we see it as our responsibility to work towards a future where people don't just understand the digital world, but embrace it and shape it, in the best interests of themselves, their families, their companies and communities.

In a way, the current crisis has one positive side-effect directly connected with that – millions of people are now using digital tools far more, and with far more confidence, than they have done even just a few months ago. The advent and rapid progression of the world's digitalisation has been a source of fantastic innovation … but, alongside, it has also created new risks – among them are cyber threats, and the risks that come with increasing automation.

How does Zurich address rising levels of automation?

People are a key component of our sustainability priorities. It is part of our core because we see the threat, we see the global challenge. An increasing number of roles around the world are being automated for productivity reasons. This has led to economic gains – but also to increasing inequality, in countries and between countries. We have sown the seeds for what we are now reaping. Automation will continue – but at the same time new fields of work will open up. To ensure a sustainable future, we see it as our responsibility to support employees and customers in this time of transformation – this means embracing learning opportunities, more education, better education, reskilling and upskilling into the digital world.

There are very positive scenarios for humanity's future in a digitalised world, but it won't be enough to reskill people into new positions – those same people also need to have a better risk awareness and understanding. Data privacy is one such risk, the aforementioned cyber threats another. What we aim for is a society that has a greater understanding of existing and emerging risks, and, because of it, also a better understanding of insurance. Take the example of proximity biases. If something happens rights next to us, we're afraid of it – if it happens far away, we don't care. People need to understand their biases and, from there, become aware of the need to build resilience.

How does Zurich help the world to better manage climate risks?

We consider climate change as one of the most complex risks facing society today. Everything is connected and interdependent. We prevent risks where we can before they have a negative impact – but not everything can be prevented. Huge economic growth has been built in unsustainable ways. When it comes to fossil fuels and carbon emissions, we can mitigate with all the levers at our disposal. Zurich is a member of the Net-Zero Asset Owner Alliance and is part of the 1.5° Business Ambition Pledge. Both our asset and underwriting levers are powerful tools to help us invest and protect for sustainable impact.

As an example, many insurance companies, ourselves included, have very strict policies to reduce insurance capacity for the most polluting of those fossil fuels. However, it also needs to be about what we can do to help the transition through innovation, through the investing side – and how we can help those polluting companies, by setting science-based targets for instance, to become part of positive, bright future. We must be realistic – when it comes to climate change, a great deal of damage has been done, and therefore a lot of the focus must also go toward adapting to consequences. The Zurich Flood Resilience Alliance is one example.

We have to do everything we can to help build resilience in the communities we operate in – and that means helping both our employees and our customers lead more sustainable lives.

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