Protecting against risks and dealing with the uncertainty of the future, our vision of insurance

Providing protection from potential risks and reducing their negative effects has been, since the very beginning, at the heart of the insurance business. In pursuit of this mission, our industry has evolved alongside society as a whole; therefore, studying the history of insurance is the equivalent of undertaking a fascinating journey through time and a rapidly changing world.

The earliest insurance contracts, dating back to the Middle Ages, were related to maritime trade and the need to protect goods against the risks of shipwreck, pirate attack or possible seizure in foreign countries. A few centuries later, the Great Fire of London in 1666, which destroyed more than 13,000 homes and many other buildings in five days, was crucial for the development of property and fire insurance. Likewise, the Industrial Revolution led to new types of coverage, such as those for travel accidents, which increased as rail networks expanded and society became more “mobile”.

These few examples clearly show how insurers have always tried to provide concrete answers to the new needs that gradually emerged, and this is still the case today. In this sense, the current historical period brings us face to face with challenges that are both particularly complex and completely unknown.

First, the Covid-19 pandemic has led to a renewed awareness of the importance of protection at all levels and, more broadly, of the crucial role that insurance plays in the economic and social stability of the whole system. At such a dramatic time for all of us, the ability to rely on life insurance or other forms of protection has made a difference for many individuals and families. Similarly, the impact of the lockdown on the operations of many businesses has highlighted the importance of protecting against the risks associated with business interruption, for which there is still a significant level of underinsurance, particularly among small and medium-sized enterprises.

Secondly, the major megatrends that are redefining our world continue to generate new protection needs. With climate change, for example, we are seeing an increase in the frequency of extreme natural events, even in geographical areas that have not been affected by these phenomena in the past. Similarly, the ageing of populations in the world’s most advanced economies is leading to a sharp increase in expenditure on the care and treatment required by an ageing population, putting considerable pressure on current public health and pension systems. In addition, the digital revolution is creating new insurance needs related to phenomena such as mobility, cybersecurity or the stability of information systems. Finally, there is the issue of artificial intelligence and its impact on the working environment and many other areas of our lives.

These are therefore new scenarios and risks linked to very different phenomena, but which, as we have seen on many occasions, have the potential to generate huge social and economic costs that private insurance and reinsurance can’t bear alone. It is precisely for this reason that there is a growing consensus that the answers to all these challenges can only come from a joint effort, with public and private actors working together to define original and successful solutions.

During the last G7 meeting, held in Italy at the end of May, the need to create public-private partnerships to reduce the problem of insurance gaps against natural disasters was emphasized. This is a highly relevant message, fully in line with what Generali has been promoting since the months following the outbreak of the pandemic, both publicly and in all our meetings with key political figures at national and European level. In fact, we firmly believe that it is only through the creation of multi-level funds, to which transnational institutions, governments, insurance and reinsurance companies and other major private players will contribute, that it will be possible to create effective protection mechanisms against systemic risks, whatever they may be.

Evidence of this commitment is the partnership between Generali and UNDP (United Nations Development Programme), aimed at reducing the protection gap for vulnerable communities through access to insurance and risk financing solutions, as well as the collaboration with the Insurance Development Forum - for sustainable infrastructure in emerging and developing economies - and with the OECD in the framework of the World Forum on Wellbeing.

In a period of great uncertainty due to the consequences of climate change and technological and demographic mutations, it is essential to understand the impact of these challenges on the well-being of individuals, communities and the planet. Providing adequate responses, in an increasingly challenging geopolitical scenario, will therefore be the key challenge of the coming years, while continuing to do what insurance has always done: be at the side of individuals, families and businesses, protecting them against risks and thus making society as a whole stronger and more resilient.