50th General Assembly, London | Summary

John Neal, CEO, Lloyd’s

London, where the insurance industry took off 300 years ago, is a fitting location for The Geneva Association’s 50th-anniversary General Assembly. The world has transformed since 1973, the year The Geneva Association started. Then, there was no such thing as the internet; now, over five billion people are connected to each other through their devices. In 1973, there were four billion people in the world; today, we’re approaching eight billion.

All the while, the insurance industry has deepened its understanding of the world – informed by The Geneva Association’s deep thinking and cutting-edge research. A quarter of the money in financial services sits in insurance, and Geneva Association members account for USD 21 trillion of that. The industry’s ability to mobilise capital behind the world’s problems – and solutions – is unprecedented. The question is whether it can convert that into protecting the world of 2073. That means understanding how AI is going to change our lives; prioritising cyber resilience in our policies and our organisations; and supporting the climate transition underway.

Paul Polman, former CEO of Unilever and co-author of Net Positive

Although the significant challenges that arise from issues such as climate change, loss of biodiversity, and income inequality and poverty have long been recognised, limited progress has been made in solving them. For example, carbon emissions continue to increase and food and education insecurity remain on the rise. Strikingly, of the UN’s 17 social development goals agreed in 2015, only 12% are on track to be achieved by the planned 2030 deadline.

On the positive side, we may be approaching some tipping points that will deliver material gains, especially on the environmental front. More governments are committing to cutting greenhouse gas emissions to as close to zero as possible and are enacting legislation to promote the transition (e.g. the Inflation Reduction Act in the U.S.). Sales of electric cars, solar panels and heat pumps are all rising rapidly. In part, these developments reflect the changing preferences of citizens, who are agitating for a faster pace of environmental change and fairer and more socially sustainable economies. The pandemic provided a wake-up call by underscoring that we cannot have infinite economic growth on a finite planet.

Companies must not ignore these shifts in societal preferences. The re/insurance sector understands this more than most, given the important implications for the insurability of risks and the value of assets. Beyond simple ESG mandates, corporations need to have the courage to take decisions that really deliver socially optimal outcomes and push back against vested interests, even if that comes at the risk of missing short-term financial targets. Over the long term, empirical research shows that shareholders will benefit from such an approach alongside other stakeholders – firms that more aggressively target the negative externalities on society ultimately deliver higher returns.

Lard Friese, Chairman of the Executive Board & CEO, Aegon; Jaap de Hoop Scheffer, former Secretary General of NATO; Zanny Minton Beddoes, Editor-in-Chief, The Economist; Seiji Inagaki, Chair of the Board, Dai-ichi Life

We are moving from an era of global mutual benefit from trade to one of zero-sum economics, with greater state involvement and use of economic tools for diplomatic and military ends, along with sanctions and export controls. Spending on defence is increasing and is likely to rise significantly over the next decade. As an alliance NATO is doing well, but there are challenges ahead – there has been a lack of military spending since the end of the Cold War, for example, and the organisation will need to decide whether it wants to remain as a transatlantic alliance or expand to include the indo-pacific region. 

Institutions that emerged post-WWII may be reshaped over the coming decades, but the U.S. is expected to continue as the leading global power due to dollar dominance, which allows it to put political pressure on its allies. The tensions between Taiwan and China could lead to supply chain disruption, placing pressure on Western governments. Friction between Brussels and Washington might also emerge over conflicting approaches to relations with China and the Inflation Reduction Act, which may put European players at a disadvantage.

The climate change debate will also likely influence the geopolitical landscape in the coming years, with large economies taking the issue seriously not just for environmental reasons but also in response to national security and development concerns. AI may have impacts on job creation and could also potentially counteract slowing productivity caused by geopolitical shifts.

Speaker: Rafael Mariano Grossi, Director General, International Atomic Energy Agency; Moderator; Jad Ariss, Managing Director, The Geneva Association

The appeal of nuclear energy is growing given the transition away from fossil fuels and global energy security needs. Nuclear energy currently accounts for 11% of global electricity production, 25% of Europe's total energy production and 50% of Europe's clean energy. Small modular reactors offer advantages in terms of cost and construction time, as well as increased safety margins. 

The narrative around nuclear waste is changing. The nuclear energy industry is rigorously regulated, especially when it comes to waste management, and major scientific and technological advances have been made in handling nuclear waste. A shift towards pro-nuclear environmentalism is also underway, particularly among younger generations with climate concerns. 

Fusion offers a more efficient way of generating energy than current fission processes but remains difficult to scale up. In light of recent scientific advancements, however, production may be possible in the next decade. 

Sir Partha Dasgupta, Frank Ramsey Professor Emeritus of Economics & Fellow of St John’s College, University of Cambridge; Tsuyoshi Nagano, Chairman, Tokio Marine; Sarah Breeden, Executive Director, Financial Stability Strategy & Risk, Bank of England; Amanda Blanc, Group CEO, Aviva

Though often considered as two separate notions, climate and nature risks are closely linked. Cutting down the Amazon, for example, limits its ability to regulate carbon. Natural ecosystems themselves are also interlinked. The impacts of these correlated risks are far-reaching and irreversible, affecting all sectors and all geographies. Focusing on transition planning and region-specific best practices can help advance solutions.

Carbon emissions remain in the atmosphere for decades, so the decisions we take today create the conditions we will deal with for a long time. The transition plans of governments and companies are fundamental to guiding decisions. 
It is the role of financial regulators and supervisors to set expectations for institutions to manage financial risks and then supervise those expectations and share best practices. The Bank of England’s Climate Financial Risk Forum, for example, aims to establish what good climate risk disclosure looks like. 

Japan offers an interesting example of climate transition planning, as it suffers 20% of the world’s damage from natural disasters. The country undertakes the widespread education of younger generations about global warming and aims to achieve carbon neutrality by 2050. Japan has a low share of renewable energy compared to other countries and the insurance industry has an important role to play in financing innovation as part of the climate transition. 

Japanese society is human-centred and places heavy emphasis on peacefully co-existing with nature. In general, the priority is not economic development for its own sake but rather an economy that supports well-being and happiness. GDP may well be an inadequate measure of growth because it does not reflect the degradation of natural assets. 

Andrew Griffith, Economic Secretary to the Treasury & City Minister, U.K. Government

Risk taking is the lifeblood of enterprise economies. However, in order to make prudent decisions, firms and individuals need to weigh the degree of uncertainty surrounding future outcomes against the available rewards from their actions. Insurance plays a vital role in not only helping to articulate and price those uncertainties but also taking over some risks from people who are less able to absorb them. In particular, by pooling premiums across groups of policyholders over time, insurance helps spread the financial impact of adverse events among a wider group.

Governments can facilitate optimal risk sharing by cutting out fictions that work to undermine efforts to reduce or mitigate risk. That could involve overcoming informational barriers or ensuring regulations do not unduly restrict financial innovations that allow risks to be transformed and transferred.

The world is currently facing some significant challenges including coping with shifts in geopolitics, adapting to increased digitalisation and transitioning away from fossil fuels towards carbon-free energy. By partnering with governments, the re/insurance sector has a big part to play in helping the world to navigate the changing risk landscape and offering solutions that boost societal resilience.

Against that background, the U.K. government is seeking to realise the benefits of its Brexit freedom to promote growth and competiveness in U.K. financial services. Whether it be through tweaking prudential regulation, making it easier for companies to raise international capital or sponsoring initiatives to address data gaps, the aim is to cement the U.K.’s reputation as a leading financial sector hub.

Maria Ressa, Nobel Peace Prize Laureate 2021

Disinformation spread by social media and the AI models that underpin it presents an increasing threat to journalism and contributes to the growing polarisation and radicalisation of politics around the world. 

Digital platforms have transformed the distribution and consumption of journalistic content, with tech companies now having a huge influence over the flow of information. Despite this, the industry is one of the least regulated. Systems that use big data to micro-target users, originally built for marketing and advertising, have changed the incentive structure of information ecosystems by rewarding lies over facts as these spread faster and drive up user engagement. Online violence, which is trending upwards, is being used to target and damage the credibility of journalists, human rights activists and politicians, and can also lead to real-world violence. Current content moderation processes do not do enough to combat these problems and the rise of generative AI is likely to exacerbate them. 

AI technologies are changing fast and being tested in real time, by real people, without any guardrails. This presents a safety issue. Legislation and education will be key to solving these problems in the medium and long term, but in the short term the onus is on individuals and society to fight for the integrity of facts; for transparency around what is fed into language models; and for the use of good journalism as an antidote to tyranny.   

Roy Gori, President & CEO, Manulife; Bruce Mehlman, Founder & Partner, Mehlman Consulting; Zahra Bahrololoumi, CEO, Salesforce UK & Ireland; Christian Mumenthaler, CEO, Swiss Re

Companies, and CEOs in particular, are increasingly expected to take a position on societal issues by different stakeholders, from employees to shareholders to governments and NGOs. Doing so, however, can have mixed results. 
Nike’s support for Colin Kaepernick, former American football player and civil rights activist in the U.S., led first to people posting videos of themselves destroying Nike products but then to a significant increase in sales. When Bud Light decided to sponsor a controversial transgender figure, the company suffered a market cap loss of 20%. 

In this complex landscape, how do companies decide when they should speak up and when to remain silent? As guiding principles, the company’s, not the CEO’s, values should guide what the company says and does. The issue and position also have to be relevant for the business, and potential business impacts should be taken into account. 

Effective internal organisation and processes are important for companies to be able to anticipate, as well as respond, to relevant issues. Transparency is key; employees should have an effective platform to express themselves. A diverse, senior team can work together to think through both present and emerging issues, how they could reverberate in the company, and the appropriate response, if any. 

Clare Smyth, Chef Patron, Core by Clare Smyth

The hospitality industry and the insurance industry, though obviously different, share several priorities and challenges.
First, both industries strive for better gender balance, particularly at the leadership level. One reason for the challenge in the restaurant industry is that the hours required – working long days, weekends, holidays – are not conducive to family life. The work environment has also been filled with bullying and abuse, though that is changing over time. Still, as a consequence of these factors, only seven out of 143 three-star Michelin chefs are women.

Sustainability is also a big priority for both industries. For restaurants, ‘sustainability’ means telling the story of where you are through dining; for example, by supporting local producers and promoting local culture. It is also about cultivating the next generation of restaurant talent so they have the confidence and knowledge to continue contributing to the industry. 

The right training process is critical for staff recruitment and retention – a challenge for both insurers and restaurants. Particularly at top-level restaurants, which can be intense and demanding, it is important to give employees the skills and tools to carry out their jobs well. Restaurants can promote physical and mental well-being by providing healthy meals, encouraging exercise, and – when a serious issue arises – getting employees the professional help they need. 

Charles Brindamour, CEO, Intact Financial Corporation; Dana Maor, Senior Partner & Global Co-Leader, People & Organizational Performance Practice, McKinsey & Company; Steve Cadigan, former/first Chief HR Officer, LinkedIn; Future of Work Advisor; Charles F. Lowrey, Chairman & CEO, Prudential Financial

The success factors for talent management are changing. The pandemic significantly modified working patterns, and deeper trends like demographic shifts and the rise of technology are transforming the workplace. Skills gaps and the changing nature of loyalty make it ever more challenging for insurers to attract, retain and engage talent. 

Lack of purpose, insufficient investment in career development and the influence of managers and leaders are among the top reasons for talent attrition. Developing a successful talent strategy requires defining clear purpose and values and delivering on them with authenticity and integrity. Organisations should also clearly define what differentiates them from others. Providing employees with flexibility, continually challenging them throughout their careers and investing in their continued learning are essential. Successful companies focus on people as much as on performance.  

Emphasis on diversity, equity and inclusion (DE&I) is also increasing but a distinct gap in DE&I expertise exists at the leadership level. Businesses must start to look beyond traditional talent pools to recruit from different communities and a wider range of educational backgrounds. 

Many employers are also working to improve resilience by simplifying their organisations and creating multidisciplinary, collaborative teams.