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Francis Bouchard, group head of public affairs and sustainability, Zurich Insurance Co., said insurers, Zurich among them, have shown how to work with other constituencies to help alleviate the impact of weather and other risks. Bouchard spoke with AM BestTV at the Joint Industry Forum 2020, held in New York.
View the video version of this interview at: http://www.ambest.com/v.asp?v=bouchard120
Following is an edited transcript of the interview.
Q: Why are we seeing so many partnerships with insurance companies and others?
A: I think it’s a reflection that the issue around extreme weather and climate change and resilience is growing in societal importance. What may have been in the past an issue around some insurable, and our focus would be on risk transfer, I think we’re seeing a greater recognition that the issue now is about risk.
When you talk about risk, particularly climate risk, you have a whole ecosystem of stakeholders who have a perspective, have capabilities, have expertise, have influence, can bring things to the table that perhaps the insurance industry can’t or doesn’t. We’re seeing a lot more expectation from the insurance industry.
Remember, people at this conference and people in this industry, we’re really the risk elites in society. More and more entities, stakeholders, want to work with us to understand the risk better, particularly in the climate space, and ultimately to do something about it.
As we move beyond just focusing on risk transfer and into risk reduction and risk resilience, more and more people want to work with us, and I think we have a lot more to give back.
Q: Could you give us an example of some of those partnerships you’re seeing?
A: We’ve been doing this forever. We have an incredible, glorious history in this industry of understanding that our role isn’t just about transferring risk. You can go as far back to Ben Franklin. Where he placed the fire houses was not about pricing risk. It was about reducing risk and making sure houses didn’t go on fire.
We’re celebrating this year, 125 years of the Underwriter Laboratory. Guess what? Founded by Chicago Underwriting Association to reduce risk of products coming out from the Industrial Revolution.
What IBHS [Insurance Institute for Business & Home Safety] does, what IIHS [Insurance Institute for Highway Safety] do, they redefine safety standards for large segments of the American economy.
When you look at the climate space, similar things are happening.
There’s a wonderful group called the Insurance Development Forum that has really partnered with the United Nations and World Bank and humanitarian groups not only to increase the use of insurance in emerging markets, but to expose data and information and modeling in a way that can be used by countries and communities that never had access to it before.
Some of the incredible work that’s being done by Swiss Re to not just create societal-level risk projects, but to also integrate into those, economic viability and well-being. The Mexican Reef example is a wonderful one.
XL came up with a wonderful pilot idea with the Nature Conservancy around combining carbon credits with resilient credits through nature-based solutions.
Zurich has its own series of partnerships that we’re proud of, whether it’s on Flood Alliance, where we work with a number of NGOs to go into emerging market communities, or our post-event review capability reports, PERC reports, even hard for me to say, where we look at what happened in a community and then try to distill lessons from it.
The industry has a wonderful record of partnering and sharing its knowledge, and we just need to do more of it.
Q: What do you think is next?
A: I do think what’s next is, the industry needs to step up and play its role in society, not just as that risk-transfer mechanism, as I was saying earlier, but as that risk awareness.
Also, catalyzing these partnerships. Let’s not wait until governments come to us. Let’s not wait until community groups come to us, or NGOs come to us, or development banks come to us.
Let’s go to them with understanding what we can do to change the risk, and help build appreciation for the urgency here as well. The next 10 years are really going to set the stage for how this, not only this country, but the world responds to climate exposures, and we have immense amounts of capability and energy to give.
View this and other interviews at http://www.ambest.tv
(By Meg Green, senior associate editor, AM BestTV: Meg.Green@ambest.com)
4th February, 2020