Protectionism is a “lose-lose situation” and its impact on both global reinsurance players and policyholders alike is not positive, according to Swiss Re’s Chief Economist Jerome Haegeli.
In a recent conversation with Reinsurance News Haegeli spoke positively about the current state of the reinsurance market, but warned against the trend of protectionism and its role in what he described as a global economy lacking resilience.
“Our hope is that multilateralism prevails because it means a common set of regulatory rules which are consistent, fair and predictable,” stated Haegeli.
“We need to be able to pool capital to where it’s most efficient,” he added. “We want a common set of regulatory rules which are consistent, fair and predictable and if you’re going to have pockets of jurisdictions setting their own regulations, gold plating and favouring their domestic players, it’s not going to be good.”
The issue of protectionism, of which escalating tensions between the U.S and China are a centrepiece, has been raised by Swiss Re before.
In September, the reinsurance giant released a report titled ‘Protectionism on the rise, and here to stay,’ which highlighted its potential to cause a global recession and long-term trade decline.
Haegeli was upbeat in regards to the current state of the reinsurance market, but underscored the importance of continued innovation and public-private partnership.
“I believe we can achieve [a more resilient market] only by thinking big, we need to start dreaming as well; we need to stop dreaming with facts and push private capital solutions and be innovative. Swiss Re has shown itself to be extremely innovative on that front.”
“I think if you look at the protection gap, be it on the pension or nat cat front, you’re going to need a public-private partnership,” he added.
“This will need clear rules, better rules, conducive rules. Then you need innovation, and the upside to the big reinsurance players is they will be able to reap the benefits of tech, allowing the increase of insurability of risks.”