“For the first time in a very long time, reinsurers are having to deal with geopolitical risks and that adds a whole layer of extra complexity that we haven’t seen before, and needs to be factored into the strategic decision-making of companies,” suggests, Arthur Wightman, PwC Bermuda, Territory and Insurance leader.
Wightman’s comments stem from the PwC Insurance Summit, Bermuda’s flagship industry event that took place on the 9th of November. Here, he discussed how and why geopolitical risks are an increasing concern for re/insurers, alongside Bermuda’s critical role in the industry.
“Right from the boards and all the way through the organisation, there needs to be an additional layer of focus on these emerging risks, and particularly the dynamics in different parts of the world and how they’re emerging,” Wightman explained.
He continued, “The Bermuda market plays an outsized hand in responding to geopolitical and other growing global risks including cyber, and climate – responding to catastrophic events has always been part of the DNA of Bermuda.”
Wightman also observed that how the insurance industry responds to solving these problems is both a decisive test of purpose and commercial relevance, while simultaneously being a “once-in-a-generation opportunity to drive innovation and growth.”
He added, “Bermuda, which impressively makes up 36% of the global reinsurance market, and is the largest supplier of catastrophe reinsurance to US insurers, has a central role to play.
“As the world continues to change at a relentless pace, the risks facing organisations, people – and the planet – will only continue to rise. The challenges to the industry come at a time when the protection gap is widening at an accelerating pace and could reach $1.86tn by 2025.
“We look forward to providing a prominent platform for the industry’s leaders to exchange ideas, insights – and explore innovative strategies in the world of insurance and reinsurance.”
Reflecting on this topic and the Summit as a whole, Matt Britten, Partner – Insurance, PwC Bermuda, said, “We heard about the need for the industry to be more ambitious in meeting demand for coverage, and not to walk away from risk – nor to consider certain risks as uninsurable – but instead to address the change in the probability of risk, drive clarity on coverage, and better define who are the best owners of risk throughout the risk chain.
“We also heard a lot about the rapid evolution of the risk environment – and how sustainability, economic, geopolitical and social risks are all becoming more correlated. In closing the protection gap around these risks, the industry needs to also help close the knowledge gap around both risk and the critical role that insurance plays.”
