2017-2018
ANNUAL REPORT

Chairman’s Statement

Dear fellow Geneva Association members:

The work of the Association has successfully underscored the uniqueness of the insurance mechanism, whilst promoting amongst policymakers and intergovernmental organisations the industry’s contribution to macroeconomic stability.

This approach has served well the interests of our industry and leveraged the decision to move towards a research-based advocacy model. Now, as the changes affecting our society pick up speed and become increasingly pervasive, we have identified an opportunity to implement a strategy update that further sharpens the value proposition of the Association, not only to the insurance industry but to society as a whole.

The intent is to embed a broader purpose into our activities, whereby The Geneva Association (i) increases awareness of the economic and social impact of a well-functioning insurance industry; and (ii) steers its research programmes to identify today the topics that policymakers and regulators will discuss in the next two to three years.

Several factors drive this, including the digitisation of the economy and the fragmentation of the regulatory landscape, which means certain advocacy initiatives, while still important, have become less prominent on the global agenda.

Building on the previous years’ achievements, the strategy update will realise an operating model that integrates the Association’s research agendas, leveraging cross-functional expertise and bringing out top-level stories that span multiple programmes.

One example is the initiative to establish a comprehensive and empirically substantiated inventory of reasons for underinsurance in advanced economies. The Why People Don’t Buy Insurance (WPDBI) project is a joint effort between the Global Ageing and Protection Gap research programmes to look at the behavioural aspects of underinsurance in life and non-life markets.

Another example is our Digitisation research initiative. Drawing expertise from the Cyber and Financial Stability and Regulation streams, it has already published its first report—Big Data and Insurance: Implications for Innovation, Competition and Privacy. As the initiative takes a deep dive into topics such as virtual competition and new business models, the connection with the WPDBI project is expected to generate new cross-functional insights.

Further research highlights include the report Cyber Insurance as a Risk Mitigation Strategy, prepared in collaboration with the Massachusetts Institute of Technology and Boston Consulting Group. With cyber currently the fastest growing specialty line of business in insurance, this paper represents a baseline for defining the contours and characteristics of a growing market.

In a focus shift that reflects our strategy update, the report The ‘Low for Long’ Challenge puts the socio-economic role of life insurers at centre stage as it questions whether an extended period of low interest rates could impair the crucial role life insurers have played for so many years.

Few issues are more socially relevant than climate change. The report Climate Change and the Insurance Industry, prepared with the input of 62 insurance executives, offers new insights into the role of insurers in addressing climate change.

These are only a few highlights of the many achievements of 2017-2018, a period during which the Association continued to consolidate its international recognition. The strategy update refines the Association’s forward-looking focus and offers greater flexibility to mobilise its centres of knowledge. Many challenges lie ahead for our industry, and I have no doubt that the Association will continue to be pivotal in promoting the value that insurance creates for our society.

This is my last letter to you as chairman. I am extremely grateful for the opportunities I have had over the last five years to contribute to making The Geneva Association what it is today. Our incoming chairman Mark Wilson has the energy, charisma and vision to drive the Association through the exciting times ahead. I am sure that you will give Mark the generous support that you have offered me throughout my tenure.

As we prepare to gather in Paris for our 45th General Assembly, I look forward to meeting with you and to the inspiring and thought-provoking discussions this will afford.

Kind regards,
Mike McGavick

Mike McGavick
Chairman, The Geneva Association and CEO, XL Group