We've been here before: Insurance as a beacon of strength in an uncertain world

I don't like roller coasters. I don't like the way they make me feel, the anxious anticipation, the unsettling feeling in my stomach, the dizzying descents. In my family, I'm the one who stays behind to watch the bags while the others embrace the thrill. Lucky for me, my wife is braver than I am. She joined the kids when they were young, and now they're old enough to go on their own, so I'm safe!

Those of us in the profession of managing risk also experience the ups, downs, and unexpected twists of a roller coaster, but this ride is easier for me to handle. Even though 2025 may feel like a wild ride, with its extreme weather, capital markets volatility, geopolitical instability and more, we as insurance professionals can approach it with a different perspective: We've been here before.

As an industry, we've stared disruption in the face before. We've already helped the world walk through the unexpected. And we can do it again. Collectively, we can be a beacon of strength and stability in an uncertain world, and today this role is more important than ever.

Soon the conference season will bring us together around the world to discuss what this means for growing exposures, changing risk profiles and the need to sustainably and responsibly provide cover. While there are no easy answers, we do have clarity on some topics. First, strong partnerships between insurers and reinsurers help form the bedrock of societal stability. Second, partnerships are strongest when they are grounded in trust, founded on shared data to inform balanced risk decision-making and supported by constructive dialogue. Lastly, we can leverage our knowledge and collaboration to help in the effort to prevent loss even before disaster strikes.

Insurers and reinsurers face numerous common challenges. Current macroeconomic turbulence and policy uncertainty suggest slowing economic expansion globally, and with it the potential for muted insurance premium growth across the board and especially in marine, trade credit, and construction. We are simultaneously navigating rising natural catastrophe losses that for decades have been driven by more people living in vulnerable areas, urbanisation, value expansion and more extreme weather. Insured losses are increasing by 5-7% annually, and more recently, we have seen insured natural catastrophe losses add up to well over USD 100 billion in a year, even without a single large event. If Hurricane Katrina were to happen today as it did in 2005, insured losses from this single disaster alone would exceed USD 100 billion. Fortunately, much has happened on mitigation, as mentioned below. In any case, annual insured losses from natural catastrophes could certainly exceed USD 200 billion or even reach USD 300 billion in any given year, according to analysis by the Swiss Re Institute.

Addressing these challenges requires collaborative solutions that harness our industry's respective strengths. For us at Swiss Re, this means we first listen to our clients and understand their needs. We provide insurers with capacity required to drive growth and reinforce their capital, support underwriting with better models and powerful analytics, and leverage data and technology to strengthen existing coverages and expand the universe of insurable risks.

With our Risk Data Solutions, we can support clients earlier in their risk-taking decision process, and across the entire lifecycle of risk. These are powerful tools and insights that help make the shift from fragmented data points to decisive action, even as events unfold. For example, insurers embed our real-time risk scoring into daily underwriting or use accumulation APIs to reduce exposure concentrations before they escalate. As another example, our CatNet® Suite offers overlays for hail and storm footprints with live event monitoring which helps insurers visualize exposure and take action.

While reinsurers and insurers have long been in the business of protection, our mandate has increasingly shifted to awareness, preparation and prevention, working together with corporates and the public sector. Real resilience goes beyond restoring what was lost to learning from our mistakes and helping the world adapt to changing, accelerating threats. Studies show every USD 1 spent on hazard mitigation saves USD 6 in future disaster recovery costs.

Consider the city of New Orleans, which just marked its 20th year since Hurricane Katrina. Our recent analysis illustrates the important difference two decades of investing in flood defences, improved building codes and smarter land use can make. While the population and economy still hasn't fully rebounded, millions of people are more protected should a storm of similar magnitude hit today.

The UK's Flood Re program is another great example of partnerships, where government and insurers work together to make flood insurance more affordable. As part of the programme, homeowners affected by high water can get financial support to invest in flood-resilient adaptation so they are less vulnerable to the next storm. Our research shows that in general, the economic benefits of flood adaptation measures can be up to ten times the cost of post-disaster rebuilding.

There's more to be done. In the US, for example, only 35% of jurisdictions have adopted modern, more stringent building codes for new construction, even though the US National Institute of Building Sciences estimates the net benefit of such updated building codes in new construction to be USD 6–12 per USD 1 invested.

As an industry, we still have homework of our own. To begin, insurers and reinsurers can double down on appropriately sharing information about the assets we protect. When risks emerge, change or escalate, data transparency and granularity allow us to adjust our models, develop forward-looking scenarios, and, ultimately, price risk accurately. Effective data sharing improves our collective understanding of evolving exposures, helping avoid nasty surprises when losses exceed expectations.

Forward-thinking partnerships also pave the way for innovation. For instance, after 2023 severe flooding in Italy, the government mandated  elementary natural catastrophe insurance for all registered companies — a bold step to close one of Europe’s largest protection gaps. It’s the result of years of public-private dialogue, now accelerated into policy. Swiss Re, together with the broader insurance sector, is playing a key role by providing benchmarks, pricing expertise, and the (re)insurance capacity essential to making the scheme viable. It’s a strong example of how our industry can drive resilience and free up public resources for future investment.

We can also do more to advance new  solutions such as parametric insurance, which is gaining popularity as a cost-effective tool to accelerate  financial relief and manage risk. Recently, Swiss Re teams worked with partners on the first city-wide flood insurance for Fremont, California, designed to make swift payouts after high-water events.

A proven parametric success can be found in Morocco after the massive 2023 earthquake that affected over one million people with losses at 8% of Morocco's entire GDP. With a parametric trigger in place, substantial funds were paid out in just a couple of weeks, and the government was able to respond quickly and support a strong recovery.

This is exactly how I see insurance – an enabler of progress and a protector of societies. Our industry helps people in moments that matter, contributing to societal resilience and providing confidence to the planet's innovators and entrepreneurs.

Over the coming conference season, I again look forward to speaking with clients and brokers about how we can do more as long-term partners. More for people who need protection, more for companies who need stability, and more for the public sector to better prepare and mitigate risk.

We've been here before, and we can do it again!