Swiss Re highlights importance of forward-looking risk management

Swiss Re highlights importance of forward-looking risk management | Insurance Business

Swiss Re highlights importance of forward-looking risk management

The Swiss Re Institute has published its 2020 SONAR report, the goal of which is to inspire risk dialogue and foster risk awareness within society and the insurance industry, which the global (re)insurer believes is a crucial step for adequate risk management.

“After this global crisis, which shows the importance of forward-looking risk management, society will need to adapt to many changes, some of which will continue to linger on,” said Swiss Re group chief risk officer Patrick Raaflaub.

“As a risk knowledge company, it is our duty to raise awareness about new risks we pick up on the horizon and to continue to build resilience also in these unprecedented times.”

According to the SONAR report, which examines new emerging risks and trends related to the coronavirus outbreak, the pandemic will continue to shift politics, regulation, and the market while bringing about a refocus in priorities as the world maps out an economic recovery.

In addition, more pressure will be put on intergenerational social contracts as hard-hit millennials face a slump in incomes and high unemployment. Top risks also include declining mental health among teenagers and young adults, disruptions to supply chains, and increased use of edge computing.

However, it was stressed that the global crisis shouldn’t overshadow the need to transition to a more sustainable economy and a low-carbon future.

“The COVID-19 containment measures and lockdowns may have eased pollution for a brief moment,” noted Swiss Re, “but they will not put a halt to global warming. Therefore, the transition to a net-zero economy, where sustainability is firmly embedded in economic recovery strategies, is key.”

Moving forward, both the public and private sectors are encouraged to focus on global health and climate change. Transitioning to a low-carbon economy will require political, technological, and behavioural transformation, added Swiss Re.