Rising losses from natural catastrophes and growing geopolitical risks are creating challenges for the global re/insurance sector, according to Swiss Re. The company emphasized the need for a comprehensive approach that includes prevention, mitigation, and collaboration between public and private sectors.
At the annual Rendez-Vous de Septembre in Monte Carlo, industry leaders are discussing how rapid change and ongoing uncertainty affect risk assessment and market stability. Swiss Re points to volatility driven by factors such as geopolitical tensions, protectionist measures, and disruptions in supply chains. The company noted that over 70 countries have seen significant protests in the past year, contributing to a more complex risk environment.
"In a time of elevated global uncertainty and rapid adoption of AI, re/insurance stands as a stabilising pillar. We look forward to engaging with our clients, partners and the public sector on how to further strengthen resilience, harness technology and address the evolving challenges of a changing world," said Urs Baertschi, Chief Executive Officer P&C Reinsurance.
Swiss Re Institute reports that economic growth, inflation in claims costs, and more severe weather events have pushed annual insured losses from natural catastrophes above $100 billion in recent years. There is concern that these losses could rise to $200 billion or even $300 billion during particularly severe years. The company stresses the importance of preventive actions like improved zoning regulations, stricter building codes, advanced risk modeling tools, and stronger cooperation between government bodies and private companies.
"Increasing losses from natural catastrophes highlight the need for preventive measures such as improved zoning, building standards and advanced risk modelling. At the same time, strong partnerships between the private and public sector are critical. Collective investment into loss prevention and weather resilience will be essential to help mitigate future risks. It is also important that the industry continues to build on the solid foundations of reliable data and increased risk transparency across the value chain," Swiss Re stated.
Artificial intelligence is expected to play an increasingly important role in managing these risks. With most insurance information found in unstructured formats such as emails or contracts, processing this data efficiently has become essential for competitive advantage.
Gianfranco Lot, Chief Underwriting Officer P&C Reinsurance at Swiss Re said: "In the face of increasing risks, data will become even more important. It's the basis for risk and accumulation management, and AI will be a game changer. At Swiss Re, we see it as our responsibility to bring together our expertise, technological capabilities, and partnerships – to help turn ambition into reality."
Swiss Re plans to discuss these issues further at its hybrid media conference taking place in Monte Carlo this afternoon.