Asset Managers, Insurers Have Key Role in Creating Economic Resilience
Though the 21st century is but a couple of decades old, the global economic system has dealt with several major shocks. From the 9-11 terror attacks, to the Great Recession of 2008-09 , to the Covid-19 pandemic that shut down large swathes of the global economy for months this year, these events have shown the need for greater resilience in our economic infrastructure.
And, asset managers and insurers will have to play a key role in this “great mandate of our time” building global resilience, according to a new initiative from the World Economic Forum and Bain & Co.
“First, there remain significant gaps in our preparation and mitigation strategies to catastrophic perils. As a result, households, businesses and governments around the world remain ill-equipped to deal with these events.
Second, the investments necessary to build resiliency are still seen as a short-term cost to be justified rather than a cornerstone of long-term value creation.”
Companies need to adequately plan for and guard against frequent and severe economic shocks. And, according to the initiate, asset managers and insurers need to work side-by-side with companies identify and quantify exposures and vulnerabilities, and develop frameworks to evaluate resiliency investments and risk engineer insurance products.