Zurich Exec On Systemic Risks: "If We Ruin The Planet...We’ve All Lost"

 Friday, January 14, 2022

 S&P Global

Building insurance solutions for extreme risks creates the "illusion" of security and certainty, according to Zurich Insurance Group AG’s top risk officer.

For situations like a global pandemic that triggers nationwide lockdowns, only governments can attempt to cover them as best they can, Peter Giger, Zurich’s group chief risk officer, said in an interview.

Creating an insurance solution for such a risk "gives you the illusion of a certainty that you cannot have, that the world just does not offer," Giger said.

In the quest for stability during the COVID-19 pandemic, government support allowed companies to survive that would otherwise have failed, Geiger said. "In the good old days, a crisis would wash out the weak of the market," the executive said. "Not this time."

Insurance is designed to take the premiums of the many to pay for the losses of the few, but that breaks down when entire countries are suffering losses at the same time. Insurers typically deem such systemic risks uninsurable and exclude them from policies.
Risk Management