The following article was written by Stephanie Ogden of Munich Re Specialty – Global Markets.
Over recent years, insurance has been confronted with three distinct challenges that are shifting our roles as risk managers.
Firstly, risk no longer travels alone- its interconnected nature is more evident than ever. Secondly, insurers have an increasing role to play by shifting their focus away from just recovery to resilience. And finally, it is clear that when addressing complexity, the fine balance between risk response and resilience requires both courage and discipline.
We can all feel that sense of constant collision that has defined global business operations over the last two years. From AI, to geo-economic fragmentation and market expansion from tariffs, international conflicts and effects on global energy supply chains, to increasing shares of extreme weather events.
For decades, insurers organised around the idea of the black swan: the sudden, catastrophic, once-in-a-generation event. That framing is no longer enough. The losses reshaping this market aren't unexpected shocks from unexpected sources – they're frequent, distributed, and connected. That's a different problem.
Few industries have been quicker to adapt to that new normal than insurance: while the nature of risk means that we are always keeping eyes open for changing tides, a larger shift in how we consider risk has accelerated in recent years.
Take the CrowdStrike outage in 2024. One flawed software update grounded thousands of flights, shut down hospital systems, and knocked out parts of the banking sector, totalling a reported $5 billion in losses to the world's largest companies, most of it uninsured.
Risks don't have “lanes” anymore. A software problem quickly becomes an airline problem, which becomes a hospital problem, which becomes a banking problem; all in a matter of hours. Risks spreading beyond their ‘place of origin’ to affect other industries and demographics is certainly reflected in industry reporting, highlighting a growing protection gap.
If the new normal is a continual grind of volatility and risk for our clients – and an environment where governments may be less likely to step in and intervene, as they did during the COVID-19 pandemic for example – what does it mean for us as insurers?
Insurance has traditionally been the financial response to a loss that's already happened. In a world where risks are this connected, waiting for the loss is no longer good enough – for clients, for brokers, or for the industry's own credibility.
The old model, which meant routinely identifying new risk categories, developing a policy, and pricing it - rinse, repeat – was built for a world where risks stayed in just one lane.
The insurers mandate is shifting: our role is not simply to pay when things go wrong. It is to help make less go wrong.
Collaboration across functions – underwriting, broking, claims, risk management – has to happen earlier in the risk cycle, not just at the point of loss.
Lloyd's already does this well, which is therefore unsurprising why the Corporation is seeing an many new entrant applications. The concentration of expertise, sense of calculated risk-taking, and unmatched capital and underwriting judgement have made this market the best in the world.
But the market needs to move at the speed the risk is moving. Insurers who position themselves as partners in building resilience, not just as claims payers, will be better partners and will write better business.
The question is no longer just "can we write this?" It is: "what does this risk touch? What does it amplify? Where does the accumulation sit?" Mastering these questions is a strategic imperative.
In an environment built for complexity, it can be tempting to react immediately to everything. Building from my time at Lloyd’s, HDI and now at the syndicate of Munich Re Specialty, I’ve learned the importance of taking a step back first.
I am privileged to be in an organisation who thinks in decades, rather than the next 12-18 months. Getting the balance right between holding the discipline yet still moving forward, with pace, has been my greatest challenge.
My view is that discipline isn't a brake on growth – it's what makes growth durable, especially as the market transitions through the cycle. The starting point is always the bottom line.
The energy transition illustrates how difficult that balance can be. It requires us to make long-term choices about the risks we support. That demands courage, because the answers are not always obvious. It also demands discipline, because good intentions are not a substitute for sound underwriting.
Our Green Solutions team employs and works closely with climate experts, some of whom estimate that global annual investment in renewables needs to quadruple, from $300bn to $1.2 trillion, by 2030 to meet net zero objectives. That capital is less likely to be deployed at scale without insurance capacity willing to understand and absorb the technical risks involved.
People frequently say that our industry is at an inflection point. Sometimes that phrase is overused. But perhaps, this time, it is more accurate. Technology is changing the nature and speed of risk. The connections between businesses, economies and societies are becoming harder to see and more consequential when they fail. At the same time, a generation of experience will leave the London market over the coming years, and we will need to equip the next generation to make decisions in a world with fewer clear boundaries and less complete data.
Yet, we should remain optimistic. Complexity is not a reason for specialist insurers to retreat. It is the reason we exist.
