Speaking in an interview with CNBC at the 2024 World Economic Forum in Davos, Christian Mumenthaler, CEO of Swiss Re, observed that despite geopolitics “trumping everything right now” in terms of global focus, there is no hesitation from companies in the net-zero transition, rather, “the movement is accelerating”.
“I’m co-chair of this CEO climate Alliance, and the amount of work they’re doing is huge,” Mumenthaler said.
He continued, “I think what’s going to be revolutionary in the next two, three years, is that they (companies) won’t just work on their footprint, but they will send a signal to all of their suppliers upstream.
“We’ve worked together on certain rules and how to help a lot of suppliers.
“Some small and medium-sized companies don’t know how to do it, so we have a lot of resources to help them. These signals will be massive, and I think this is going to lead to some snowball effects.”
Mumenthaler reiterated that the net-zero transition is going to “accelerate massively”, chiefly driven by the fact that in the minds of many CEOs, the transition is going to happen. Swiss Re’s CEO also observed that COP28 reinforced this idea, adding that the transition “is inevitable”.
“No matter what you think, as a CEO, you have to prepare for this new world and if you don’t believe it, but your supply companies and shareholders to say this is important, you need to be net zero,” Mumenthaler said.
Highlighting the importance of insurance in this transition, Mumenthaler underscored how insurance premium can act as a form of “feedback” to society about climate change.
“It is the first time we see a bill, and of course, the reaction is negative. People are like, ‘Oh, what what is this?’ This is the bill of what we have collectively done to the planet, and it’s coming back in the form of an insurance premium.”
Mumenthaler added that this can drive some ideas on how to build in the future, noting, “This was always an important function of insurance to give feedback on the risk.”
Also in the interview, Swiss Re’s CEO responded to some pressing questions on war exclusions from CNBC’s panel.
“There’s a misunderstanding of what reinsurance and insurance can do. insurable risk is a risk that is random and can happen anywhere in the world. Since the beginning of insurance, war has been excluded, though there’s some very specific small war coverage that can be done, Mumenthaler explained.
He concluded, “But war is not an act of God, it is a human-induced act, and is therefore technically not insurable. War has never really been insured and will never be.”
