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This, the Lloyd’s CEO said, was made more apparent by the COVID-19 pandemic, which showed that “when the unexpected happens, people look to those in the risk management business for answers and a framework to bounce back.” .
“Things always go wrong,” Neal said. “As much as we try as humans, we can never eliminate risk from our lives. Sometimes it just takes being in the wrong place at the wrong time…as I found out in my recent bike accident.”
He added: “There will always be a need for insurance. It is a central part of the functioning of a society, helping people prepare for the worst and live more confidently in everyday life. What we all do is incredibly relevant and always will be.”
Another thing the pandemic has shown is the value of having “really clear policies” and being equipped to “explain to clients in a very articulate way when they are covered and when they are not,” the Lloyd’s CEO said.
According to Neal, the insurance industry’s role in today’s uncertain landscape is twofold. Insurers must not only help clients respond to risks, but also build resilience.
“There’s no point in waiting for these so-called ‘black swan’ events to happen and then writing a check and saying great, we’ll wait for the next one,” he said. “We need to understand the causes. We need to share our knowledge and help society prepare for unavoidable future events. And that’s what we’re trying to do at Lloyd’s and across our industry.”
Neal called the insurance a “timeless and essential” product. Even then, he said there has never been “a more interesting time” to be in the industry than today.
“There’s a whole list of meaty issues to tackle,” he said. “How we respond to climate change has immediate and long-term impacts, social and environmental costs, and local and global repercussions, and insurance is far from on the sidelines. We are right on the front lines of response and driving climate action through the products we can create.”
The Lloyd’s CEO also discussed the impact of high inflation and relatively low growth on the macroeconomic environment, suggesting that the insurance industry is moving forward by considering the risks created for clients, supply chains and organisations.
In addition, he touched on the situation in Ukraine, referring to how Russia’s invasion led to “a devastating human cost and a reordering of energy, political and technological priorities that we have not yet begun to fully understand.”
“The challenge for us as insurers is to manage these complex risks and to do so with the sensitivity that it requires, while also being forward-thinking enough to think about the challenges that could arise in a month, in a year. , and possibly even in a decade,” she said.
Concluding his speech, Neal said, “Where does the current crisis leave us in the race to Net Zero? What does the current crisis mean for our future relationship with China or India? And how will that be affected in the coming years? We can’t just look to politicians for these answers, we have to become experts ourselves.”