NU Online News Service, Sept. 9, 9:29 a.m. EST
As the world’s societies strain to adjust to emerging new economies, the insurance industry will be called upon to play a greater role in spreading the cost of risk with governments while also participating in greater opportunities, says Martin Sullivan, deputy chairman of Willis Group.
Giving a speech in London before a group of company executives, Sullivan says that in a period of austerity, “consumers of the industrial world, many of them American, are retrenching.”
Government is shrinking in the face of rising deficits and “Big government is less and less able to step in” to help.
“The burden on the insurance industry will increase,” he says, to develop solutions with government to “find ways to spread the costs for injury compensation and rebuilding.”
He adds, “It is in the interest of individual insurers to participate at the local and national levels to find solutions for perils that have previously been ‘insured’ by taxpayers.”
Risks that were once considered “uninsurable” will need solutions, Sullivan continues.
“Global warming, public health, terrorism, food supply, and water scarcity are all issues that can benefit from underwriting expertise,” he says.
“Local and national insurers will need to join global insurers at the table with governments and other interested parties to wrestle with these problems,” says Sullivan.
On the other hand, great opportunities are opening up for the industry as India’s and China’s economies grow. Sullivan says a burgeoning middle class in those nations will eventually need insurance services.
“The emerging world with its billions of new middle-class consumers will open a golden age of insurance—an age that will benefit the entire global economy,” says Sullivan. “And in this case, too, progress will be underwritten by the insurance industry—the same virtues that have served us, our clients, and our communities for so many centuries are strong enough to carry us through many more.”