EDITOR’S LETTER

Remembering 9/11: it’s time for the industry to lead on tackling the big risks

“Let’s see which leaders emerge who will help shape the world’s responses to such crises.”

Had we all been in Monte Carlo this week, there would no doubt have been some poignant moments as the industry recalled the World Trade Center terrorist attacks of 9/11 20 years ago. Those who attended the conference in 2001 will vividly recall the shock and uncertainty as the events of that day stunned the industry.

Twenty years on it is good to reflect—on those who lost their lives, of course, including the many colleagues and peers who worked within the industry. They will not be forgotten.

But it should also serve as a reminder of how that event crystallised the importance of the industry—it reminded the world just how important a global risk transfer network can be.

The record loss of $47 billion in insured losses sent shock waves through the industry—but there was also pride in the way it demonstrated the sector’s resilience and purpose.

There is no doubt that the industry has benefited from that shock. It became a catalyst for further investment into risk models as well as disaster recovery planning for the industry.

And while a need to model terrorism became clear, it also helped move forward the industry’s commitment to develop better models across the board.

A challenge of comparable proportions

Now, as the world continues to grapple with a global pandemic, the insurance sector is facing another challenge—at least the equal of those terrorism attacks. We have again been reminded that it is not the risks we understand that are the issue—it is all too often the events we are not expecting that cause the real shock.

Moves are already afoot to find ways of better understanding, modelling and managing the risks associated with pandemics.

There is a long way to go, but the fact that the industry has stepped up and initiated such actions is to be applauded.

The same is true of cyber risk—a much more mature risk in some ways but one that is extremely complex and difficult to quantify on a global scale. COVID-19 reminded us of the original meaning of the word virus, but it could still be the more modern kind that has the greater potential for disruption.

The point is this: the global risk transfer industry, with its resources, talent and partnerships, is uniquely placed to help the world manage these risks. And as the world’s population becomes bigger and more interconnected, it also has a moral obligation to help.

The terrorist attacks of 9/11 allowed the industry to show how strong, responsible and reliable it could be—and it found ways to better manage terrorism risk as a result. Its global response is a source of pride for the industry.

Now, it needs to step up and do the same around other modern risks—but rather than be reactive, to get on the front foot. That is possible only through collaboration which, in turn, needs leadership.

The Monte Carlo Rendez-Vous, virtual or not, is the natural place for such conversations to begin and then move forward.

Let’s see which leaders emerge who will help shape the world’s responses to such crises—in an age where ESG factors are increasingly prominent such moves will surely also go down well with shareholders.

Wyn Jenkins, managing editor, Intelligent Insurer

Image: shutterstock.com / Keith Burke