Peak Re Chief Executive Officer Franz Josef Hahn has underlined how the insurance industry must be an integrated part of working towards a better future.

In a conversation at one of Aon’s recent fireside chats with industry leaders, Hahn spoke at length about how emerging risks such as cyber and climate change could develop moving forward, both for the industry and wider society.

On climate change, Hahn noted how insurers must work with scientists to understand how it changes the recurring, as well as severity factors.

“Lots of universities are working on this and new models are coming out,” Hahn said.

“But, of course, we are working in the market environment, and now at the upcoming renewal and hopefully the next two renewals, we have a chance to correct pricing.

“When I look at India in particular, the country has really taken a courageous step forward with GIC stepping into the market and demanding a very strong increase of most of the property pricing in the market, which is necessary in order to have a sustainable insurance and reinsurance marketplace.

“Because otherwise at one stage it’s not going to go any further and no capacity will be provided any longer. So that’s a positive move.”

On cyber, Hahn stressed the need for affordable risk management and development of services for small and medium business that are limited in the time and capital needed to robustly defend against cyber criminals.

“Other emerging risks have to do with global degrading or the environmental degrading, like water reduction,” Hahn added.

“Water will be one of the biggest challenges to mankind in the future, and it is today already, where we see across Asia that water is not necessarily readily available to all.

“Very often, when it is available, it’s too dirty, or too rough. So the sustainability of reliance on water, specifically in those countries which are dependent on the Himalayan, there will be less and less.”

Source: Reinsurance News