Dynamic Asia is a key growth market: Swiss Re CEO

In an era marked by relentless natural disasters, evolving social dynamics, and fast-paced technological advancements, the re/insurance industry is being challenged to adapt and innovate more quickly than ever before.  

That was the message from Andreas Berger, group chief executive of Swiss Re, speaking at the 20th Singapore International Reinsurance Conference. He underscored the need for evolution within the industry, emphasising the importance of data-driven strategies and partnerships as key catalysts for change. 

Berger reported feeling energised by the potential and dynamism of the Asian market. “It’s one of our very important growth markets,” he emphasised, highlighting the region’s pivotal role in shaping the future of global insurance and reinsurance. 

Berger quoted the late American football player Jerry Smith: “Safety isn’t expensive, it’s priceless.” He stressed that this sentiment resonates deeply within the insurance sector, where the goal is not just profitability but protecting individuals, businesses, and communities. 

He reminded the audience that while the industry is often perceived as a mere “shock absorber”, its true role extends far beyond this. It is about providing dependable risk assessment and effective activity management, key tools that make the world more resilient in the face of ever-increasing natural and manmade threats, he said. 

Central to Berger’s message was the concept that leveraging data is essential for navigating the modern landscape of risk management. “We can provide dependable risk assessment which leads to increased risk protection. That’s more that we can do as an industry.” 

Data is needed

Berger acknowledged the complexities that insurers face today, where conventional models are increasingly challenged by new forms of risks, particularly secondary perils—events such as floods, hailstorms, and wildfires, which often fall outside the primary scope of catastrophic modelling. 

Berger cited Typhoon Jebi of 2018, where initial loss estimates ballooned from $5.5 to $13 billion. Such discrepancies underscore a significant point: without accurate and updated data, initial projections can falter, impacting the entire chain of response and recovery. 

“The root cause of everything is the lack of data about up-to-date exposures and risk values,” Berger said, stressing the urgency for better data practices across the board. 

Insurance companies cannot tackle these monumental challenges alone, he noted. 

“The issues are so big that we could not tackle them on our own. It needs a concerted effort where we have to come together,” he said. He invited insurers to innovate and collaborate and he highlighted Singapore as a beacon for such partnership-driven progress, lauding its significant investments to establish itself as a hub of insurance and reinsurance innovation. 

“Our models are pretty up to date but there’s still a long way to go.”

Berger’s analysis of industry trends revealed what he stressed were some sobering statistics. “It’s now the fifth consecutive year where losses exceeded the US $100 billion bar,” he stated, adding that this represents a significant shift toward a “new normal”. By mid-year 2024, losses were already 62 percent above the 10-year average, painting a picture of an industry facing unprecedented financial challenges. This context makes the role of data even more important. 

According to Berger, only 50 percent of exposures to secondary perils have been covered by models developed in the past five years. He asserted that while strides have been made, significant work remains. “Our models are pretty up to date but there’s still a long way to go for full coverage, especially in geographies that remain underexplored,” he said. 

In addition to partnerships, technology holds the potential to transform the way insurers operate. Berger spoke candidly about the current state of artificial intelligence (AI) in the industry. “AI works only when you get your data foundation and your data strategy right. The wake-up call is that if you use AI in a more uncontrolled way, there will be consequences,” he said. Technological progress must be paired with a robust and well-structured data framework. 

Swiss Re has taken steps to meet this challenge head-on. Berger shared that the firm has developed comprehensive data models designed to enhance real-time risk assessment and improve decision-making. 

“We think like a software company, creating a digital twin of reality,” he explained, illustrating how insurers can better visualise and prepare for future risks. 

Berger pointed to local risk management projects, such as those around Singapore’s flood-prone areas. By integrating real-time data and predictive modelling, Swiss Re and other stakeholders have been able to provide actionable insights, allowing authorities and businesses to make informed decisions on infrastructure investments and risk mitigation strategies. 

Berger noted that significant increases in extreme precipitation are real and impacting the world, underscoring that the risks are not abstract but immediate and growing. He concluded by urging industry professionals to embrace this era of change through data, partnerships, and innovative thinking. 

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