Using modelling and analytics has given the insurance industry a unique resilience to catastrophe and man-made shocks, according to the chief executive and chairman of Willis Group.
Joe Plumeri told a conference in London yesterday that the industry's response to the global financial crisis and, more recently, record catastrophe losses last year was testament to its strength.
Because of this, the insurance industry should reposition itself as the global leaders on resilience and commercial sustainability for companies, organisations and enterprises facing a future of unknowable risk, he said.
Mr Plumeri highlighted the 'pace and severity' of events between 2000 and 2011, combined with long-term risks arising from issues such as climate change and increasing competition for energy resources - as well as the shifting global balance of power away from the West. Together, he said, these events are a sign of a world which is struggling to find a new equilibrium.
In this context, the insurance industry must view insurance not simply as a transaction but as the natural business partner for clients to achieve mitigation of risk and long-term, viable growth.
'Resilience is about managing extreme events, and who better to provide this than the industry which is unique in its approach to the use of modelling and analytics in managing risk? he asked. 'Who else models on the basis of extreme one in 200 year events?'
Mr Plumeri said the growth in risk and uncertainty worldwide was increasing demand for the knowledge, expertise and capabilities which were the insurance industry's hallmarks.
Insurance, he said, was the obvious vehicle for delivering resilience because of its combination of risk management and analytical services.
As a result, it is the industry's 'responsibility', he said, to 'own' resilience and to utilise its leadership position in this area to enable clients to achieve long-term, sustainable growth.
Successfully doing so would represent a significant future growth opportunity for the insurance industry, he added.
