Our Managing Director recently spoke at the British Insurance Brokers’ Association annual conference about the challenges facing financial services. This is a summary of his comments covering black elephants, conflict and tech.
‘We all know what the elephant in the room means – something so obvious that we can all see but don’t address; We all know what a Black Swan event is – low probability/high impact event. I like what Adam Sweiden describes as ‘Black Elephant’ events – we can see it clearly and it will have enormous impacts – and yet we are still not doing enough about it. Climate, population growth and resource scarcity.
How does insurance industry find a voice and influence in the next big debate in politics which is how to remodel the State, enabled by tech, machine learning and AI. The big idea in government is technology and not enough decision-makers yet realise it. The entire state and public services will be reorientated around tech and machine learning. This debate can’t be about the gadgetry but instead it will get to what’s the philosophically progressive or conservative structure? We all had clear ideas on how the traditional State should be structured and the outer limits of the State’s powers and remit. We are about to enter that debate and the industry should find its voice and influence. For example, the development of ‘Virtual Wards’ within the NHS where patients are monitored and treated by a hospital while they are in their own bed at home. There are a range of other issues where financial services must remain engaged including:
- On the UK Risk Register a future pandemic remains the UK’s single greatest threat; rightly so.
- How do you price risk when it comes to the future territorial integrity of the UK – when Scotland and Northen Ireland are led by parties determined to unwind the Union
- Since 2007, information is the commodity and needs to be insured and machine learning will accelerate that pace literally exponentially
- Despite recent events we have lived through a remarkably peaceful period, we are likely to see more conflict, some of which will be instigated by Russia in response to failure in Ukraine
- Population Growth – As Thomas Friedman observed – not since Adam and Eve gave birth to Caine and Abel has a generation ben able to say that the world’s population doubled in their lifetimes. Over the nine decades from 1960 the population will treble.
- Political change in the UK – for the first time in almost fifteen years there’s a credible possibility of a Labour government and it’s my sense that financial services isn’t anticipating an alternative government’s agenda on climate, more constructive engagement with the EU, protecting the under-insured or uninsured, data (democratisation of algorithms), infrastructure, new measures to influence corporate behaviours.
And finally, in an ‘age of acceleration’ regulators, government and industry will have to learn to act as quickly as the tech innovates – if we are to stay ahead of the next change rather than trying to regulate the previous one.’
