While the demands placed on insurers are changing rapidly, their fundamental role remains the same - namely to secure value in order to promote prosperity and preserve livelihoods. New technologies are giving rise to novel opportunities to do just that. Alongside loss indemnification itself, the importance of loss mitigation and avoidance is increasing. Torsten JEWORREK, the member of the Board of Management responsible for reinsurance at Munich Re, said: "Assessing, managing and accepting risks in order to promote entrepreneurial activity is - and always will be - our most important role. By building on our core competencies, we develop solutions for new risks and client groups, while using the latest technology. This is how we will continue to strike the right chord with clients in future."
As MUNICH Re has repeteadly stressed out, Governments and private insurers are called upon to find solutions to mitigate considerable natural catastrophe losses. Governments do this by ensuring adequate loss prevention, strengthening building regulations and implementing forward-looking municipal planning, while insurers draw up intelligent coverage concepts and develop new products.
In addition to purely commercial cover from the insurance industry, there are also some good examples of public-private partnerships. Notable examples include Flood Re, the state-run insurance pool for flood risks in the United Kingdom, and the National Flood Insurance Program (NFIP) in the USA. These public-private partnerships benefit from primary insurers' and reinsurers' risk expertise and capital strength, and from their sales and claims-handling infrastructure. The solutions offer policyholders more insurance coverage options, promote flood protection, and also reinforce the basis for improved risk management.
Epidemics are another major risk that threatens not only lives but also whole economies. The Ebola epidemic in West Africa in 2014 demonstrated that developing countries in particular have insufficient financial resources to urgently deliver appropriate medical care and to control an epidemic. In conjunction with the World Bank, the World Health Organization and companies in the financial services sector, Munich Re has developed the first insurance solution to cover epidemic risks in developing countries. Its aim is to stop epidemics from spreading, and prevent them from turning into pandemics. The Pandemic Emergency Financing Facility (PEF) creates a totally novel mechanism to quickly channel first-relief surge funding to developing countries facing a disease outbreak with pandemic potential.
Governments are increasingly utilising the competence and financial strength of the insurance industry in order to provide urgent assistance after a major loss event. JEWORREK said: "Weaker economies in particular keep suffering natural catastrophes and other major loss events that set back their economic development for years. Governments and private industry need to work together to find solutions to reduce risk and strengthen the basis for prosperity in these countries."