Swiss Re CEO Stresses Net-Zero Transition and Insurance’s Role at Davos 2024

At the 2024 World Economic Forum in Davos, Christian Mumenthaler, CEO of Swiss Re, provided insightful perspectives on the current trajectory of global climate initiatives and the insurance industry’s role in this transition. Despite the dominance of geopolitical issues in global discourse, Mumenthaler observed a steadfast commitment to the net-zero transition, noting an acceleration in corporate efforts to reduce carbon footprints and effect change through supply chain influences.

Mumenthaler, co-chair of the CO climate Alliance, emphasized the vast scope of work being undertaken by companies to address climate change. He predicts a revolutionary shift in corporate strategies, extending beyond internal practices to encompass the entire supply chain, significantly impacting small and medium-sized enterprises. This approach is expected to create a "snowball effect," rapidly advancing sustainability efforts across various sectors.

The Swiss Re CEO highlighted the inevitability of the net-zero transition, a sentiment reinforced at COP28. This inevitability is increasingly recognized by CEOs worldwide, who understand the necessity of preparing for a net-zero future, irrespective of personal beliefs. This shift is driven by pressures from supply companies and shareholders emphasizing the importance of achieving net-zero emissions.

Mumenthaler also underscored the unique role of insurance in the transition to a sustainable future. He pointed out that insurance premiums serve as a tangible reminder of the collective impact on the planet, reflecting the costs of climate change back to society. This function of insurance, providing feedback on risks, is crucial in shaping future building and development strategies.

Addressing concerns about war exclusions in insurance and reinsurance, Mumenthaler clarified the industry’s position. He explained that insurable risks are typically random and universal, whereas war, being a human-induced act, is not technically insurable. This exclusion has been a long-standing principle in the insurance industry, with only limited, specific war coverage being available.

In conclusion, Mumenthaler’s insights at the Artemis ILS NYC 2024 conference and the World Economic Forum emphasize the dynamic role of the insurance industry in the global movement towards sustainability and the challenges in insuring complex risks like war.