Insurers' Strength and Relevancy in Light of Regulatory, Technological and Coverage Challenges

No. 14 , August 2014 EDITORIAL Insurers? Strength and Relevancy in Light of Regulatory, Technological and Coverage Challenges By Etti Baranoff+ The theme of this Insurance and Finance (IF) newsletter is how the global insurance industry has demonstrated its strength both by providing the coverages needed and by helping to maintain economic growth and stability. The success and the need to remain relevant is in light of regulatory, technological and products challenges which is featured in the various contributions. In this issue of the IF newsletter, our readers will discover an interview with David Long, the CEO of Liberty Mutual, giving them an o pportunity to learn about yet another global player that delivers to its constituencies and helps them manage their risks, thereby maintaining the world?s continued prosperity. Liberty Mutual is the IF newsletter?s eighth featured insurer and, as all other featured companies, it is an insurer that serves local communities in its global outreach. 1 With the prevalence of currently strong and successful insurers, Katsuo Matsushita and Kunihisa Kawasaki point out in their article (?Remaining Relevant and Contributing to a More Inclusive Society Going Forward?, p. 7) that the global insurance industry should continue to ?remain relevant ? and contribute to building an inclusive society and economy.? While, the feature insurers presenting past and current st ates, the authors are providing challenges for the future with the call for ?many other approaches to keep insurance in the centre ring amid fluid and challenging times. This will be particularly important as governments and central banks look for ways to create and sustain growth in a fair and balanced way.? As the reader can see by reviewing the past eight issues of the IF Newsletters with featured insurers, these insurers are already operating on the cutting edge of innovation and involvement in each com munity they serve. The sustainability efforts of IAG, the ?giving? of Liberty Mutual, are just two examples. O ne clearly sees that the industry, while decades old, is young at heart and does rise to emerging challenges as highli ghted by Matsushita and Kawasaki. The industry uses its resources, both financial and intellectual, to ?fulfil a major role going forward.? While we feature insurers? strength, resilience and stability, the global insurance industry is very aware of and immersed in the post -financial crisis of 2008 regulatory challenges. The Insurance and Finance programme of The Geneva Association has published numerous studies regarding systemic risk in insurance and financial stability. This body of work shows that failed insurers do not disturb fi nancial markets and economies. An abundance of studies can be accessed at the Insurance and Finance programme webpage . Among them is the report on resolution of insurers pub lished in 2012 (Insurance and Resolution in Light of the Systemic Risk Debate) . Currently, the work regarding insolvencies in light of systemic risk and resolution is ongoing. Case studies of the relatively small number of insolvent insurers around the world have been carried out or followed by the Insurance and Finance programme. + Research Director, Insurance and Finance, The Geneva Association. 1 In the past seven IF Newsletters, featured insurers included a variety of insurers in terms of product line specialties and g eography. All these insurers are successful and most valuable to their communites.