Swiss Re’s Lohbeck: Industry must evolve to meet risk transfer needs of energy transition
Technological developments will help advance the energy transition over the coming years regardless of curveballs thrown by macroeconomic and geopolitical issues, according to Swiss Re’s specialty CUO Anne Lohbeck.
Lohbeck told The Insurer TV that the (re)insurance industry has a significant opportunity to help facilitate the energy transition through the provision of risk management and risk transfer tools.
During the interview, Lohbeck highlighted how geopolitical concerns had placed constraints on those working to insure the energy transition as governments moved to prioritise concerns over energy security.
This was further compounded by macroeconomic concerns, which led some governments to pull back from earlier commitments to reduce emissions.
“The first thing to recognise is that this is a very, very dynamic landscape,” she said.
“And while we're all racing towards net zero, geopolitics, energy security and considerations around that have just thrown us all a huge curveball on a societal level.”
While she acknowledged this was a “highly dynamic space”, Lohbeck said one factor that isn’t disputed is that technological advancement is occurring.
She said the healthy flow of investment in the energy transition space means we should be optimistic on progress.
As these technologies develop, Lohbeck said it was important to monitor supply chain impacts, and what effect this has on claims costs.
One example highlighted was around the availability of repair vessels for offshore wind facilities, as well as the availability and cost of labour.
“Everything that we need around the insurance value chain is a space that we actively need to continue watching,” she said.
Lohbeck also highlighted the cyber opportunity, stating that it was important to approach the peril in a prudent way, “moving forward one step at a time” while working to limit accumulations.
“With all of the devices that we use across society now, cyber as a peril is something we need to insure and reinsure.
“The demand is there, the necessity is there – the relevance of cyber will only ever increase. We as an industry need to find ways to address the structural, wording and aggregation issues that we still have.”
She likened the market’s current level of understanding around cyber to other perils in previous decades.
“We’ve managed to wrap our heads around issues in other lines, and I have no doubt we, as an industry, will be able to do the same with cyber. But it will take time,” she said.