Geoff Summerhayes, chair of Zurich Australia and New Zealand, emphasised the crucial role of insurance in supporting economic and social prosperity during his address at the Conexus Insurance in Super Summit.
In his speech, Summerhayes (pictured) quoted former Bank of England (BoE) governor Mark Carney, who noted that insurance systems are vital in enabling markets and society to manage risks.
“Insurance underpins most aspects of a prosperous economy and society. In fact, no significant activity, investment, provision of credit, occurs without insurance,” he said. “Former BoE governor Mark Carney, stated that ‘insurance systems sit amongst our most significant scientific, cultural, and economic assets,’ enabling markets and wider society to quantify, share, and govern risks at local, to global scales.”
“Accessible and affordable insurance is not something any business or individual can take for granted. That’s a problem for insurers; it’s a far bigger problem for governments and society,” Summerhayes said.
He pointed to a leadership opportunity for the insurance and superannuation industries to adapt and collaborate with stakeholders, including members, employers, governments, regulators, and communities.
“APRA’s Suzanne Smith said recently ‘Think Bigger’ Insurance does three things: source of risk intelligence, insurance is an investor, and insurance is an enabler of risk sharing. For a fee, you get an option on capital,” he said.
Summerhayes outlined three primary methods of risk sharing.
The first is the global insurance system, where premiums are paid in exchange for coverage against injury or loss. The second involves government intervention after events, offering emergency response and support payments.
The third method, often overlooked, is when individuals and businesses absorb losses themselves.
Summerhayes noted a global trend where risk is shifting from insurers to governments and individuals, particularly in property and life insurance.
“We are seeing, in real time, a transfer of risk back onto businesses and individuals, with governments as a safety net (in which case the costs are passed back to businesses and individuals anyway, via the tax system). Unchecked and unaddressed this shift, and concentration of risk, can have a damaging impact on communities and our economy,” he said. “There is, however, potential for a step-change in understanding and accepting that increasing resilience is a necessary task for all who play significant roles in our economy and society. Acknowledging the interconnectedness of superannuation, business, governments, citizens, and insurers and leveraging it to become a strength”
Summerhayes suggested leveraging insurers’ intelligence and data, advanced technology, and AI to model risk over time. This approach could help increase resilience, reduce risk, and lower premiums for businesses and individuals.
He commended the Insurance Council of Australia (ICA) for reintegrating insurers into national policy discussions and expressed high hopes for the Council of Australian Life Insurers (CALI) to achieve similar goals.
“This is a leadership challenge for us all, not only for the brand of insurance, but the ongoing economic and social prosperity of our society. National prosperity is a team sport, as an industry we have and important role to play,” he said. “Many aspects of life are changing, the environment, human health, medical, technology, AI, customer trends, institutional trust, economic, future of work, [and] societal trends. In some cases, those changes are accelerating. That has implications for Zurich and all of us.”
Like in his previous speech addressed to attendees at the Zurich Accelerate Strategy & Leadership Conference, Summerhayes emphasised the importance of ambition within the industry.
“It is in this context that I put to you that – ambition is healthy. We should be ambitious for superannuation, the role of insurance in super, ambitions for the role we can each play in that endeavour,” he said.
