World Economic Forum 2018: Creating a shared future in a fractured world
How tech-driven insurance can help speed up resilience
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As 3000+ world leaders of politics, business, academia and civil society head for the World Economic Forum in Davos, they will be thinking about the various ways in which they and their organisations can help create a shared future in a fractured world. Swiss Re will contribute by outlining how technology-driven insurance solutions can help bridge widening protection gaps faster and more efficiently, thereby boosting resilience.
The WEF's Global Risks Report warns that the world is entering a period of intensified risk. Extreme weather events and other natural disasters remain the top perceived risk to the world in 2018, closely followed by environmental disasters, cyber crime and large-scale involuntary migration.
The top risks are climate-change related, but in light of our highly connected world and rapidly growing populations, they are also deeply systemic. As always it is the most vulnerable that face the hardest hits, but increasingly the impacts are being felt in wealthy, industrialised countries and communities as well – and the changes are happening fast.
Record year for natural disasters
In the US last year, a record of three category 4+ hurricanes made landfall within the space of four weeks – hurricanes Harvey, Irma and Maria. Insured losses from these events, plus two significant earthquakes in Mexico, are estimated at USD 95 billion by Swiss Re. Other notable disastrous events in 2017 include the raging forest fires in different parts of the world, including particularly impactful wildfires in California and Portugal, and the ongoing, ever-worsening droughts in Africa.
Total economic losses from natural and man-made disasters in 2017 are expected to exceed USD 300 billion, an increase of about a third compared to USD 188 billion in 2016.
New risks, new opportunities
At the same time, technological, economic, demographic, societal and geopolitical macrotrends are driving deep changes which impact us all. That said, while these structural changes are creating new and growing risks to society, they also create new opportunities.
During its more than 150 years of operation, Swiss Re has seen time and time again how active risk management can help nations, corporations and individuals to mitigate and adapt to risks, and recover from catastrophes faster. The two sides of this coin – active risk management and insurance – provide a powerful planning and resilience tool for all parts of society. At a time when rating agencies signal that credit will become more expensive for countries that fail to plan adequately for disasters, this type of planning is becoming more urgent than ever.
Reducing protection gap
Making insurance available to everyone has been fraught with challenges in the past due to the complex processes governing insurance companies and challenging insurance regulation. Big data has improved our risk models, drones and satellites make certain risk and claims assessments faster and easier, and people can increasingly use mobile phones to make policy payments and receive claims payouts. We are now in a position to narrow protection gaps for more people, faster and more efficiently than ever before.
At a time when cyber incidents and business interruption interlink as the greatest threat to companies and business, the public and private sectors must pull out all stops to work actively together in order to counter those threats, and clear the way for the benefits that technological disruption – including tech-driven insurance solutions – can bring. Jayne Plunkett's blog in the box to the right describes the three levels of insurance that can make a difference.