COVID-19 has offered a first look into the sheer scale of systemic perils. As the risk landscape continues to shift, there is an opportunity, indeed an imperative, for governments and the risk transfer sector to find new means to collaborate. By leveraging risk management and risk transfer expertise, this partnership can help communities build greater resilience and recover more quickly when the unexpected happens, according to a recent Reactions article by Peter Hearn, President and CEO of Guy Carpenter.
Important progress has already been made, with Marsh & McLennan and other industry leaders at the forefront of conversations worldwide to create forward-looking solutions. A spectrum of risk pooling models has been proposed, ranging from limited private partnerships to pure state-financed solutions. Perhaps an optimal landing point would be a combination of these two extremes, so that all key stakeholders have “skin in the game”.
Conversations are further advanced in counties where government pools already exist, given the enhanced appreciation of the role public-private partnerships play in supporting financial resilience. As the biggest global intermediary with access points across the (re)insurance value chain, Marsh & McLennan sees it as our responsibility to take a leading role of engagement, and we will be a passionate advocate for any initiative that helps build resilience and provides coverage clarity to businesses.
The risk transfer sector often does itself a disservice in failing to communicate the huge value of (re)insurance: I feel this unprecedented period of risk transition is actually an opportunity to demonstrate the benefits our industry brings to societies. The level of sophistication and expertise developed over decades of dealing with major catastrophes puts our industry in an unrivaled position to drive the agenda and strengthen economic resilience. Marsh & McLennan and Guy Carpenter look forward to working with governments and markets to do just that.