The events of 2020, notably the ongoing COVID-19 pandemic, are set to fundamentally alter the way insurance will be viewed and as sentiment shifts, just paying claims is not enough, according to Thomas Buberl, Chief Executive Officer (CEO) of global insurer AXA.
Aon’s latest fireside chat with industry leaders saw the insurance and reinsurance broker’s CEO, Greg Case, discuss an array of burning issues, from systemic risks such as COVID-19 and cyber to innovation and the evolution of the risk transfer universe, with AXA CEO Buberl.
While the conversation touched on many elements of the current market landscape, one of the overriding themes was the need for the re/insurance industry to take different actions and essentially change what it is doing.
Like many other industries, insurers and reinsurers of all shapes and sizes have experienced unprecedented change as a result of the COVID-19 pandemic. In light of widespread structural changes, Case asked Buberl if he sees the current environment as temporary or whether it will change the direction of AXA overtime.
“You certainly see some fundamental changes now because before, and for example on health risks, we’ve been talking about pandemics, we’ve been modelling them, but we have never modelled them in such a way,” said Buberl.
“I think with the digital pandemics i.e. the cyber risk, you have felt something similar. We’ve spoken about it, we invested a lot, but with this new challenge of everybody being at home and working from home, it has completely changed that challenge. And, so, this will stay and this desire to understand one’s risks, both individually and as a company, and to mitigate those risks will certainly change the way insurance will be looked at.”
He continued to highlight AXA’s shift in strategy from payout to partner, which the global insurer started in 2016. And told Case that this is something that the firm believes in going forward and that this is exactly the mood change that is evident currently.
“Just paying for a claim, be it a cyber claim, be it a business interruption claim, is not enough. We need to help our customers a) to prevent, but also then to clean up quickly when something has happened. And this notion of understanding the risks, mitigating the risks, and helping very quickly, to my mind, has certainly changed in dimension,” said Buberl.
Both Case and Buberl agreed that the events of 2020 and current market dynamics suggests that there is a window of opportunity that should not be missed.
“Insurance, from a customer perspective, has often been a non-involvement good. It’s a necessary evil that you have to have and there are these insurers and brokers that push solutions on me which I don’t understand sometimes, and I don’t even want. And, I think we need to turn that around and say look, we put ourselves in the customers shoes. How can we help the customer to understand their risks? How can we help them to see how to mitigate them? And really start with a clean sheet of paper and start from a risk management approach, a consulting almost approach, and then come afterwards with what are the right solutions,” explained Buberl.
For Buberl, the right solution here isn’t just related to the actual insurance coverage, but it also relates to providing a service at the same time.
“I think that’s the piece where we need to change. And, that’s also why we shifted our portfolio very much towards these lines of business that have exactly that angle of risks being at the forefront of the customer every day, the desire to act on them, and also the necessity to help,” he said.
Adding: “I do believe these are the areas where we will see a lot of future potential and also a lot of growth.”