IIS Global Insurance Forum 2018 / Day1: The innovation transformation of insurance

9 July 2018 — Oleg DORONCEANU
We have gathered the representatives of all stakeholders in the insurance industry from more than 50 countries to enhance exchanging ideas and offer solutions to international community about new technologies and to share knowledge, stated Mike MORRISSEY, President and CEO, International Insurance Society at the annual edition of the Global Insurance Forum.

The event is one of the most important international forums dedicated to insurance and reinsurance industry, at its 54th Edition brought together in Berlin starting July 8th more than 400 insurance leaders, as well as government officials, rating agencies, industry leading experts and professional associations. XPRIMM is Media Partner of the Forum. Follow us to get live insights from the event's proceedings!

Day one and two of the event will focus on insurance innovation topics, starting with welcoming remarks from German government and insurance association and featuring a set of debate panels on the industry's key issues. Days three will focus on the ways insurance industry promotes resilience and aids market development, with contributions from government, industry and international speakers. Also, public private partnerships in insurance on developed economies and emerging markets will each get their own session, stated Mike MORRISSEY in his opening remarks.

Martin JAEGER, State Secretary, BMZ, Germany
  • The innovation transformation should become the main scope for insurers in the forthcoming period
  • NatCat events are a real threat nowadays, as these risks have increased three times in comparison to 1980, causing economic losses of EUR 350 billion in 2017
  • According to our calculations more than 90% of the economic losses caused by natural catastrophes in emerging countries are not covered by insurance
  • Three quarters of the world population will live in the areas exposed to the Nat Cat events
  • Climate change is the main risk and challenge to be addressed in the future, therefore climate risk insurance should become the main concern of the international insurance industry
  • The insurance industry can increase the potential of the emerging markets to be more resilient to the climate change risks, to promote preventions and help with the financial recovery of the affected countries and population
  • Germany has invested EUR 300 million in climate risks insurance schemes
  • We have 47 partners in an important program which gathers insurance industry, governments, NGO's, World Bank and many others to gather data and mitigate climate risk insurance; we already have created Pools in Africa and Caribbean countries and are supporting countries from Latin America and others
Klaus WIENER, Member of the Management Board, German Insurance Association, Germany
  • European insurance industry is in transformation, influenced by factors like regulation, population ageing, new risk landscape, low interest markets and technology
  • In respect of low interest rates in the previous year - one important think which I would like to underline is that they resulted in strong decline in willingness of saving among population, so they preferred to spend instead of saving
  • Digitalization impacts all areas of the insurance market: underwriting, product and distribution, business process, consumer behavior and expectations
  • Foster pace of innovation and competition - are elements of creative destruction: insurers have to adjust their strategies and develop new business models
  • We see great challenge, but also great opportunities for insurers - market positions will change substantially, but no sign of widespread displacement of traditional insurers
James VICKERS, Chairman, WILLIS Re, United Kingdom
  • According to our latest report we discovered that 2/3 of all the investments in the fintech are coming from incumbents, who have the funds, experience and vision in looking forward to the future of the industry
  • The insurance and reinsurance industry still have to work harder at explaining what they do
  • The pricing in insurance is based on complicated models and data that are not relevant to the public, therefore, there is a lack of understanding of the industry, caused by its inconsistent service level to customers

Joaquim LEVY, Managing Director and CFO, The World Bank

  • Climate change is an existential risks although not always perceived as such
  • We have a big task ahead in terms of developing models for natural disasters and for climate change
  • Also, we have to get more price signals and to address the possibility of investing in climate-friendly infrastructure projects
  • The World Bank has developed numerous projects and instruments to support climate change insurance schemes, including the release of bonds of more than EUR 1,2 billion, and we see an increase from the private investors for these instruments 
  • Increasing the insurance penetration in new market will have a positive impact on economies

R.M. VISHAKHA, CEO, India First Insurance Co

  • India's insurance industry is moving from a 'buyer beware' to a 'seller aware' model, as some segments of population have a very low financial education
  • The insurance companies put a lot of effort in education and promoting to create value for the customers, although there is a changing risk environment and costs as very high for the insurers
  • After the Christchurch earthquake in New Zealand in 2011, losses amounted to about 20% of the country's GDP but were largely recovered by foreign insurers and their global reinsurance. This is in contrast with some local insurers which were overwhelmed by the disaster. This speaks about the value of insurance as well as dependence of some small markets on international insurance players
  • Regulators from India and BRIC's countries are welcoming international companies which are willing to provide capital
  • The biggest costs for insurers are in distribution and this should be addressed accordingly. Claims ratios in India often were in excess of 100% and a lot of underwriting is still based on outdated tables.

Michael PICKEL, Member of the Management Board, HANNOVER Re

  • Compliance costs could be very significant, with the new IFRS 17 reporting standard which could cost more than Solvency II and could affect pricing
  • Solvency II have helped to enhance risk management and pricing. Over time, these processes could be simplified
  • Diversification has helped in difficult claims situations, like the disasters of 2017; the protectionist tendencies in certain markets like Latin America, Asia and the Russian Federation are working against reinsurers, making it hard to get business out of these countries.

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