I have the privilege of chairing Zurich’s businesses in Australia and NZ.

Insurance underpins most aspects of a prosperous economy and society. In fact, no significant activity, investment, provision of credit, occurs without insurance.

Former BoE Governor Mark Carney, stated that “insurance systems sit amongst our most significant scientific, cultural, and economic assets’, enabling markets and wider society to quantify, share and govern risks at local, to global scales.”

But, let me start with a provocation. Accessible and affordable insurance, is not something any business or individual, can take for granted. That’s a problem for insurers, it’s a far bigger problem for governments and society.  

There is also a counter to my provocation on availability, that is, there is a significant leadership opportunity for the insurance and super industry, if we adapt, and work with our members, employers, governments, regulators and community. APRA’s Suzanne Smith said recently ‘Think Bigger’

Insurance does three things:

1. Source of risk intelligence
2. Insurance is an investor
3. Insurance is an enabler of risk sharing. For a fee, you get an option on capital

Let’s frame risk sharing or risk transfer.

There are essentially three ways in which risk is commonly shared. The first is the topic of this conference: the global insurance system, where individuals and businesses pay premiums in exchange for specified cover when injury or loss occur.

The second is via governments, who are commonly called upon in the wake of events to provide emergency response, support payments, reconstruction funding and other ways of supporting communities and businesses that have suffered loss. For life and health, the support is less obvious but significantly greater than event driven funding because it is ongoing, in Medicare, hospital funding, disability pensions, NDIS, and a raft of social security measures.

And the third -- most often ignored -- is private individuals and businesses themselves, who in many cases must simply absorb losses, expenses, income impacts, injury or death and try to move on. 

What we are increasingly seeing globally for a variety of reasons, including chronic diseases or even, policy, regulatory or reputational issues, such is the case with life insurance, is the migration of risk (and therefore losses) from the first of these (insurers) to the second (governments) and – most worryingly – third group (individuals). This shift is most dramatically illustrated in property cover, but the picture is similar with life insurance, although less obvious and more of a trend, with lower levels of both health and life cover.

We are seeing, in real time, a transfer of risk back onto businesses and individuals, with governments as a safety net (in which case the costs are passed back to businesses and individuals anyway, via the tax system).  Unchecked and unaddressed this shift, and concentration of risk, can have a damaging impact on communities and our economy. 

There is however potential for a step-change in understanding and accepting, that increasing resilience, is a necessary task for all who play significant roles in our economy and society. Acknowledging the interconnectedness of superannuation, business, governments, citizens, and insurers and leveraging it to become a strength.

So, what does genuine risk sharing look like? 

Insurers are a great source of intelligence, a resource that remains largely untapped. How could we use data, advanced technology, for more open sharing of information with individuals and businesses. Where are members exposed? What changes could we make to increase the resilience of their business or health, and therefore reduce their risk and their premiums? How could we model that risk with say AI and show how risk evolves over time, not just one year to the next, but through a business cycle and over a decade.

The ICA has got insures back at the national policy table, and we have high ambitions for CALI to do likewise. This is a leadership challenge for us all, not only for the brand of insurance, but the ongoing economic and social prosperity of our society. National prosperity is a team sport, as an industry we have and important role to play.

Many aspects of life are changing, the environment, human health, medical, technology, AI, customer trends, institutional trust, economic, future of work, societal trends. In some cases, those changes are accelerating. That has implications for Zurich and all of us.   

It is in this context that I put to you that - Ambition is healthy. We should be ambitious for superannuation, the role of insurance in super, ambitions for the role we can each play in that endeavour.

Thank you, I look forward to the discussion.

-ENDS-