The 21st century has already witnessed a transformational shift in the global risk landscape, with a palpable change in the severity and frequency of events since 2000, said Joe Plumeri, Chairman and CEO of Willis Group on Thursday. Speaking at the InsiderScope London 2012 conference, held in the Willis Building before a packed audience of industry leaders, Plumeri called for a repositioning of the insurance industry as the global leaders on resilience and commercial sustainability for companies, organisations and enterprises facing a future of unknowable risks.
Plumeri, who has been at the helm of Willis since 2000 and has viewed the new risk landscape evolving over the last decade from the front lines, urged his colleagues to view insurance not simply as a transaction but rather as the natural business partner for clients achieving mitigation of risk and enabling long-term sustainable growth.
In his keynote speech, Plumeri said the pace and severity of events between 2000 and 2011, combined with long-term risks arising from challenges such as climate change, growing income disparity, increasing competition for energy resources and the fundamental shift in the global balance of power from the West to the rapidly emerging powers of China, Brazil, India and others, all symbolise a world which is struggling to find a new equilibrium.
Plumeri went on to make the case that the insurance industry is unique within the financial services sector in having proven its own resilience in the face of the global financial crisis and, more recently, in the response to the record catastrophe losses in 2011. The insurance market has remained fully operational throughout these crises and those of previous decades, he said, calling it a testament to the strength and resilience of this capital market.
“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?” asked Plumeri. “Who else models on the basis of extreme 1 in 200 year events?” he continued, adding that this approach had made the insurance industry more resilient to catastrophe and shocks from mother nature and man-made markets than any other.
Plumeri said that the growth in risk and uncertainty across the globe was driving demand for the knowledge, expertise and capabilities which were the hallmarks of the insurance industry. He described insurance as the obvious vehicle for delivering resilience, thanks to the combination of risk management and analytical services that are unique to this industry. Plumeri added that it was, in effect, the insurance industry’s responsibility to own resilience and to utilise its leadership position in enabling clients to achieve long-term sustainable growth. If able to rise to the challenge, Plumeri said that this scenario represented a significant future growth opportunity for the insurance business.
Plumeri’s keynote address at InsiderScope 2012 followed presentations from Pat Ryan, Founding Chairman and CEO, Ryan Specialty Group; Charles Franks, CEO, Kiln Group and Sir Laurie Magnus, Senior Adviser & Deputy Chairman, Evercore Partners.