Traditional risk management models face significant pressure due to unprecedented natural disasters, geopolitical conflicts, and economic instability. Increasingly complex and interconnected risks demand that insurers and reinsurers adapt, according to Howden Re report Beyond the Horizon: Shaping the Future of Risk.
Howden Re stresses the urgency of industry-wide collaboration to create innovative products that address the rapidly shifting risk landscape.
Climate change, contributing to more frequent and severe weather events, along with ongoing global conflicts and persistent economic volatility, highlights the growing complexity of risks.
The traditional risk management strategies must evolve to meet these challenges, according to NatCat Insured & Economic Losses Report.
Climate change will have a larger impact on economic losses in the future, according to Swiss Re Institute. A new analysis of 36 countries ranks the Philippines and the US as the most economically exposed countries today, where hazard intensification is likely to occur due to climate change.
Even adjusting for inflation, the September storm, one of history’s most-destructive natural catastrophes, would have been half or even a third as expensive in the 1970s, Swiss Re data shows.
At its one-year anniversary, a analysis pivots off the dynamic drivers behind Hurricane Ian’s costs and offers insights for the US Southeast, Gulf Coast and Northeast, regions with diverse characteristics but something critical in common: the importance of adapting our built environment to a future of volatile weather.
The report identifies three key areas reshaping the re/insurance industry: rising natural catastrophe (nat cat) losses in Europe, emerging geopolitical risks, and casualty concerns, all of which demand immediate attention.
The risks we are encountering today are more interconnected and severe than ever before, requiring new ways of approaching risk management. Bespoke solutions are needed, tailored to the unique challenges faced by different regions and lines of business worldwide
David Flandro, Head of Industry Analysis and Strategic Advisory at Howden Re
In Europe, recent floods and hailstorms, particularly in Italy, have sharply increased insured losses. The report calls for the development of tailored products addressing all types of risks, including both peak and secondary perils.
Natural catastrophes will once again break several loss records in 2023. A high number of low-to-medium-severity events will aggregate to insured losses of more than $100 bn in 2023, according to Beinsure research Natural Catastrophes Will Break Several Insured Losses Records.
Additionally, the report notes a rise in strike, riot, civil commotion (SRCC) events, and political violence, which have become more frequent and severe.
On the topic of casualty risks, Howden Re highlights the need for insurers and reinsurers to rethink traditional reserving strategies and adopt more detailed approaches to manage long-term exposures.
Massimo Reina, CEO of Howden Re International, emphasized the need for the industry to evolve alongside the changing risk landscape.
We believe that the future of risk management lies in our ability to innovate and collaborate. We are dedicated to working with our partners to ensure that the (re)insurance industry not only survives but thrives in this new era
Massimo Reina, CEO of Howden Re International
He called for collaboration between brokers, reinsurers, and capital providers to deliver the necessary risk resilience for the future.
