Guy Carpenter Europe CEO Julian Enoizi has urged the sector to place a greater focus on the dual challenges associated with a changing climate and evolving geopolitical turmoil.
- Industry urged to focus on climate and geopolitical risks
- Enoizi highlights industry’s underestimation of climate change impacts
- State-backed reinsurance schemes discussed as potential solutions
Speaking on the sidelines of the annual industry gathering in Monte Carlo, Enoizi, who also serves as chairman of Marsh McLennan’s global public sector practice, said many firms are not yet focused enough on the wider implications of both perils.
“Despite the rhetoric, I’m not sure enough people have actionable plans with consideration to the implications of these two themes,” he said. “Those two phenomena dominate much of my thinking as Guy Carpenter looks to best advise clients around the most effective way to deal with them.”
Enoizi, who in July was appointed to the Insurance Development Forum steering committee, said the industry continues to “underestimate” the issue of climate change and its associated implications such as mass migration, which in turn leads to increased civil unrest.
“We’ve been talking about property catastrophe covers for many decades but need to fully understand the impact that climate change is having on our ability to develop and provide certain covers to match the speed at which this is all happening,” he said.
Swiss Re Institute reported in August that global insured losses from natural catastrophe events are on track to exceed $150 billion in 2025, having topped $80 billion in the first six months of the year. Insured losses for the first half were the second highest for any year on record and almost double the 10-year average.
“These figures are concerning. It is evident that these losses are not simple weather events but rather are being driven by a changing climate. It should be raising questions as to what we as an industry are going to do about it. That, to me, is the challenge that we have yet to comprehend the implications of or design solutions for.”
The former Pool Re CEO pointed to state-backed reinsurance schemes as one potential solution but warned that the sector’s relevance could be diminished if it fails to play its part in the dialogue around how such solutions could be implemented without overburdening the tax-payer.
The Insurer recently reported that the South African government is assessing ways to manage volatility risk through a public-private partnership, while EU bodies and local governments in Canada, Australia and New Zealand are all looking at ways to better manage and transfer risk.
“It is a phenomenon that is here to stay. It will undoubtedly have a massive impact on clients and a massive impact on us as brokers and on reinsurers,” he said.
