"The re/insurance industry is becoming increasingly irrelevant in the modern world. It must act now to solve new risks and offer what businesses really need", claimed Mike McGAVICK.
To back up his argument he added: "Global GDP has grown by an average of 3.8% over the last decade; the total size of the industry has grown by just 2.5%. In perspective the industry's contribution to global economy has fallen from 3.4 to 2.8%."
Further on, he highlighted the decreasing involvement of the insurance industry in the world's two biggest and most influential sectors: technology and energy, taking notice of the fact that companies haven't yet realized the shift of so many industries onto internet-based applications. This means fewer tangible assets to insure criticizing the market for failing to offer solutions to unique risks, such as cyber crime.
"This market is worth about USD 1 billion but we are barely making a dent in it," McGAVICK said. "We estimate that 70% of companies that could use these products do not - that means we are either not relevant or they are unaware. We are only scratching the surface," he added.
Energy industry, on the other hand, is the most critical one to the smooth functioning of global economies. The ability of the industry to cover some of the massive risks involved was so limited that energy companies have learned to operate without insurance, McGAVICK explained.
An example is British Petroleum (BP), which long ago chose self-insurance so, during the recent massive oil leak in the Gulf of Mexico, insurers barely played a part.
"I actually disagree with BP; I think we can help these companies," he said. "Our expertise and risk management alone can help in a claim like that. But our size as an industry in comparison to energy makes us irrelevant in many cases."
McGAVICK concluded that the industry must invest in providing solutions that really matter to clients. "We cannot solve every problem immediately but that is no excuse for not trying. And we cannot leave our best talent working on profitable business. We must invest in solving these modern risks and put our best people to work on them".