SCOR CEO Denis Kessler has said that the coronavirus (COVID-19) pandemic has raised new questions about the role of the state and highlighted the need for more public risk management.
Speaking in an interview with l’Opinion, Kessler said that after the crisis has cooled down, states will have to concentrate all their efforts on preventative measures to ensure the safety of citizens and society.
Kessler argued that the state has for too long “confined itself to a mainly curative, reactive role,” but must now prioritise prevention and protection.
“It’s perfectly legitimate for the State to organize prevention, to ensure the ex-ante safety of its citizens,” he told l’Opinion. “You could even say that this is its original, historical role.”
Such a shift in focus could be good news for re/insurers, as insurance solutions would be among the options available to a government looking to focus more on preventative measures.
But Kessler also felt that states will need to make greater use of technology in preparing for future crises.
“Technology can help to contain the pandemic far more efficiently, at a lower economic cost,” he said. “The scope and the limits of using tracking technology in a democracy will now inevitably be issues for consideration, and that consideration will no doubt stretch beyond health risks.”
Additionally, the role of international organisations may be re-evaluated after the pandemic, as reactions have been mixed regarding the effectiveness of bodies such as the World Health Organisation.
Moreover, Kessler noted that the rampant progression of COVID-19 has made pandemic risk tangible for a very large number of people who were previously unaware of it, or had underestimated its potential impact.
“Until that point, this kind of crisis was not part of the public mindset, it was simply “unimaginable”. For the general population, the idea of a pandemic brought to mind the great historical fears of another time, which appeared to have been eradicated: the plague, leprosy, tuberculosis, cholera, and so on.”
This will put additional pressure on both governments and re/insurers to ensure that sufficient protections for this kind of risk and widely available going forward.
Demand for additional protection typically materialises after any major trauma or shock, and this trend is unlikely to any different following the COVID-19 pandemic, Kessler said.
“This provides fertile ground for multiple initiatives purporting to reduce the probability of said risk occurring, and to minimize its consequences,” he remarked, comparing the crisis to the measures introduced after the World Trade Center attacks and 2008 financial crisis.
“We will see a similar phenomenon with the historical shock caused by the COVID-19 pandemic and the multi-faceted crisis – health, social, economic, financial and even geopolitical – that has gone with it,” he went on.
“We can already say that the “value” of human life and the absence of human suffering has been significantly reassessed. Budgetary decisions in particular will now be taken against the backdrop of this new context, which is marked by a new value scale.”
In a separate interview, Kessler recently cautioned against the introduction of a pandemic insurance scheme to mutualise operating losses for businesses, while acknowledging that the crisis could “change the course of history.”