Due to the pandemic, insurance buyers will be more considerate of risk management, and thus will seek out effective risk-transfer solutions.
Fahad Al-Hesni, MD-CEO, Saudi Re
As the world fights to emerge out of the economic, health and social challenges caused by COVID19, (re)insurers should consider this an opportunity as much as a challenge.
By choice or force, (re)insurers have become more adaptable and agile. Digitisation in the insurance industry is being accelerated at an unprecedented pace, which will make operations more efficient and sustainable. The industry is likely to embrace a more forward-looking approach and increased preparedness for future challenges.
Due to the pandemic, insurance buyers will be more conscious of risk management. This will reflect positively on the insurance industry for its role as an effective risk transfer solutions provider. There are strong signs that clients are keener to be protected against risks such as catastrophes, cyber, business interruption, life, health and a multitude of other risks. The insurance industry with its know-how of risk management is better poised to advise them on not only the risk transfer solutions, but more importantly identifying and assessing the prevailing as well as emerging risks.
Response effort
In an effort to limit the spread of infection in our region, governments have taken many precautionary measures which helped curb the spread of the infection, and introduced stimulus packages which supported the domestic economy. The Saudi Arabian Monetary Authority (SAMA) has issued a SAR50bn ($13.3bn) private sector financing support programme to promote economic growth. SAMA has also taken actions to enable insurers to maximise their services to their clients during the crisis – hence delivering on the promise to clients and demonstrating the industry’s role in supporting the financial stability. Regulators are progressing in initiatives to increase insurance inclusion and narrow down the protection gap, and insurers are presented with an opportunity to contribute to these endeavours and work with the regulators in a dynamic manner.
In the early stages, we activated our business continuity plan prioritising the safety and well-being of our people. We have taken several precautionary measures to reduce the impact of COVID-19 on our business. In spite of the extraordinary turn of events, our services to clients and partners were not interrupted. We have actively engaged with our clients and had a successful 1 April and 1 July renewal seasons. Our investment in our people and digital infrastructure has paid off well and stood the pandemic test.
Redefining our impact
The insurance industry is known for its role in building corporate, national and international resilience, and it is well positioned to actively contribute to supporting the economic recovery from the pandemic crisis. The situation entails that the industry revisits its contribution to society and redefines its environmental, social and economic impact.
The post-crisis era will hold uncertainty, but will also feature innovative business models, changing the risk profile and risk perception. The insurance industry has to be proactive in identifying risks that could face governments, business and individuals and offer innovative solutions. By taking these steps, insurers will be able to support their economies, respond to client needs and reinvent themselves to adapt to the future. M