Many top CEOs in the insurance, reinsurance and risk industries will have breathed a sigh of relief as 2021 closed – in the earnest hope that 2022 would prove less trying than the year just past. run out.
On the plus side, everyone gets better at coping when something calamitous happens. When calamities become the norm, we learn to expect the unexpected and have an idea of how we’re going to pull ourselves together. But that doesn’t do much for the quality of life.
The biggest challenges facing our industry are broadly the same as this time last year. Cyber is still the scourge of businesses and consumers. The bad guys are still active and they don’t seem to be taking any time off. Singaporean media headlines during the festive season are scary as regular bank customers find themselves financially wiped out by the bad guys.
The climate has ceased to be a risk that only affects others. Only the lucky ones have not had direct experience of a flood, fire, drought or typhoon. If we add Nat CATs that are not directly related to climate change, such as tsunamis, earthquakes and volcanic eruptions, the undeniable conclusion is that the planet is sending us a very clear message.
Rising political risk appears to be accompanied by supply chain disruptions to cause a growing sense of anxiety among political and business leaders – which inevitably spills over into the media, driving entire populations to develop visions of increasingly polarized future.
Interest rates will begin a long run up at some point this year – as soon as the US Federal Reserve has made its full intentions known. As always, this will prove both positive and negative – but at least it’s a risk for which economists come up with endless models. Inflation will be an inevitable side effect.
The pandemic – truly the gift that keeps on giving – is also showing us new ways to disrupt business and distort business plans with the latest iteration hammering businesses that want to open but can’t because staff are recovering. ‘Omicron or isolates himself because he has been at an exposure site.
Meanwhile, technology is advancing, giving insurance, reinsurance and risk professionals a better way to do business – or a faster way to fall behind the competition. Never before has the technical team been busier – incorporating lessons learned from the gaming industry into the way they develop, offer and deliver insurance solutions.
But the CEOs who survive and thrive in the coming year will be those who know that the current level of disruption is not a one-time event that will subside. They know that this is how business life will be in the future on a constant and continuous basis. In other words, it’s as good as it gets.
Long-term planning will remain essential, but so will planning for frequent and seismic disruptions. Economic intelligence coupled with agility and brilliant marketing will be the way forward.
Welcome to the working week.
Asia Insurance Review