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Building a more resilient and sustainable world: An action plan for the insurance and asset management industry
Catastrophic risk events occur far more frequently than is commonly assumed. It is a certainty that there will be another disruption, even if its precise form and timing are unknown. The model by which society currently manages catastrophic perils -with governments implicitly bearing the brunt of growing protection gaps- is unsustainable, as successive crises have severely strained public coffers. Building resiliency is, therefore, the defining mandate of this time, highlights this report.
The report argues that companies and governments must do more to put themselves on a sounder footing and anticipate and mitigate exposure to catastrophic perils before the next crisis occurs. Two critical imperatives emerge:
- A new “Societal Risk Compact” is needed wherein companies, regulators, policy-makers, insurers, risk advisers and investors all play a part in more proactively managing catastrophic risk;
- Resiliency must be better prioritized in corporate and investor agendas, with a new language for describing and justifying investments in corporate resiliency.
The insurance and asset management industries have a critical role to play, leading a multistakeholder collaboration to put society on a sounder footing ahead of the next crisis. Insurers should assume a leadership role not just in risk transfer but also in risk minimization. The report also underlines that asset managers should play an active role in advancing resiliency in the corporate agenda and directing capital towards sustainable uses.