1 November 2010 Insurance

Insurance—the ultimate 'community product'

The industry moves to the centre of global sustainability.

“Insurance is transitioning from the unfashionable branch of the finance sector, to the ultimate ‘community product,’ enabling populations to share the costs of extreme events at local and global scales,” said Douglas.

“This is locating insurance at the very heart of the search for sustainable futures.” That was the message from Rowan Douglas, Chairman of the Willis Research Network (WRN), and CEO of Global Analytics.

The Network’s Chairman explained the WRN’s aim of placing the insurance industry at the epicentre of industrial and social sustainability efforts. WRN is the world’s largest collaboration of its kind between academia, industry and government and is part of Willis Group Holdings.

Its objective is to marshal the expertise of its international membership base to assess the physical, strategic, operational, and financial risks posed by extreme events.

“From corporate financial stress and bankruptcy on Wall Street, to poverty and mortality in developing countries, it is increasingly clear each day that our industry’s and our society’s sustainability is inextricably linked to our ability to avoid and manage extremes.

“The obligations imposed by regulators to ensure our industry has sufficient capital to withstand the maximum probable losses expected once every 200 years are only set to toughen with the introduction of laws like Solvency II, the creation of an Office of National Insurance within the U.S. Treasury, and a reshuffling of financial regulation in Britain.

"No other branch of the finance industry has to manage to such extreme thresholds of sustainability as part of its everyday operations as ours, so it makes perfect sense to position insurers at the forefront of global sustainability,” said Douglas.

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