AXA’s de Courtois urges industry to take more insurance risks

Emerging risks need a different approach, the AXA executive said on presenting the findings of its Future Risks report

Insurers must take more risks and look to the future to better forecast emerging risk exposures, a top European insurer said, rather than only rely on historical data.

Frédéric de Courtois, deputy CEO at AXA and president of Insurance Europe, also urged his colleagues to make more investments in human capital and technology as they face growing exposures to risks like climate change, cyber and social polarisation.

Presenting the latest AXA Future Risks report in Paris, which found that a vast majority (90%) of both the public and risk experts in 15 countries believe the world is facing a growing number of crises that have more impact on their daily lives, de Courtois said: “The intensification of the feeling of vulnerability in this report is stunning. It is clear that we live in a world of multiple crises.”

Not only are there many crises around the world, but several of them are interconnected, he pointed out. Themes like cybersecurity, pollution, chronic maladies and others rank among the main concerns for today’s populations.

De Courtois highlighted that 91% of respondents said insurers have a key role to play in facing such crises. The survey was carried out in markets including the US, China, UK, Germany, France, Nigeria and Brazil.

“It is up to us to have the good will, to be agile to protect our insureds, and to find solutions, in particular solutions that are supported by technology,” he remarked.

De Courtois added that one solution is to take more risks.

“In this context, we must take more insurance risks, although not more financial risks. We must be able to insure risks even when we do not know all the nuances,” he said. “We must learn how to have the capability to analyse them, to get into them, make mistakes, try again and move forward.”

To do that, de Courtois noted that insurers must invest in the development of new competencies among their employees, adding people with expertise in technology but also in sociology, meteorology, data science and other areas that can help them to understand the movements that are taking place today. They also must adopt new ways to assessing risks.

“The role of insurers, historically, has been to support ourselves on the past, on historical data, and that remains of course important,” he said. “But today, there are so many big changes going on, and they are so uncertain, that we must look at the future to try to prevent them.”

“In other words, if we want to protect the world against climate change, or to protect the technologies that allow us to fight against climate change, we must look ahead and find a way to forecast what will happen,” he continued. “Having only actuaries at the table is no longer enough.”

He also expressed concern about disinformation, a phenomenon that also emerged as one of the main worries of populations across the world.

“Disinformation is the enemy of prevention,” he said. “It is clear that it has a negative impact on measures to fight climate change, Covid or social fragmentation.”

More recently, rescue works were severely hampered by the spread of false information in states like Florida and North Carolina following Hurricane Helene in the US, and this was followed by disinformation about Hurricane Milton.

AXA’s survey found that populations and experts agree that disinformation is a concern for 40% of those surveyed among the general public, and 25% among the experts.

According to experts from AXA, the most worrying finding is that a large majority of respondents believe they are able to identify disinformation, but at the same time they are not sure that other people are capable of doing the same.

The most relevant effects of disinformation, according to the survey, are a rise in violence and hate and a negative impact on the education of young people.

The top three risks in the survey are pollution (mentioned by 78% of the public and 77% of experts), exposure to hazardous substances (74% and 73%) and cybersecurity (73% for both groups). For all three of them, risk perceptions are on the rise.

The top five are complemented by ethical risks linked to use of technologies (71% for both groups) and climate change (70% and 77%).

Looking forward, climate change emerges as the main risk in the next five to ten years, while the public puts new forms of security risks and terrorism in second place, while the experts picked up geopolitical instability. Cyber risks came third for both risks.

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