We live in a time of enormous and rapid change. Some of these changes are relatively predictable, like the way we brace ourselves for the Atlantic hurricane season every year, or prepare for historic regulatory changes like Solvency II. Others, like the Japanese earthquake or the Arab Spring, follow a less predictable track and bring with them outcomes that, in turn, may lead to new aftershocks later. But that’s the nature of risk, and the role of an insurance broker is to understand, anticipate, and respond to whatever the world presents us.
With change accelerating in the risk landscape, it’s important that companies are aware of the range of challenges facing their business and receive useful information in real time. This is why we’ve pulled together Willis experts who have spent their careers deeply interwoven with our clients’ industries to share their knowledge and insights through our new blog, WillisWire, which today I have the honor to inaugurate.
Asia’s Changes Are Shaping the World
On September 21, I spoke to more than 100 CEOs of Asia’s leading companies at the KPMG Captains of Industry lunch at the British Chamber of Commerce in Hong Kong. Asia is in the forefront of the changes that are shaping the world, both in terms of risks and opportunities.
That the region is experiencing rapid change is unquestionable. The regional economy is projected to grow 6.7% in 2011 and, by 2030, the Asian economy will be larger than the US and EU combined. We are also witnessing the growth of a huge urban middle class in Asia; by 2030, India and China alone will need to build the equivalent of 14 cities the size of New York to meet the demands of the burgeoning population.
Before the purchasing power of this mass of people is even considered, the new infrastructure required from this growth represents a massive opportunity for businesses that provide raw materials, construction, goods and services. It’s also an opportunity for insurers, for as companies and governments seize these opportunities and grow, they will expose themselves to a greater spectrum of risks.
Last year, 25% of IPOs on the US Stock Exchange were from Chinese companies. In my speech in Hong Kong, I discussed the top ten risks CEOs need to be thinking about as their companies expand globally. Things like governance across different regulatory regimes and managing an international reputation are crucial to the sustainability of any major business today.
Sustainability: A Holistic Approach to Clients
That word – “sustainability” – is one we’ll hear more and more often in the years ahead. To me, it epitomizes the holistic approach that brokers and insurers should be taking toward their clients. It comes down to a fundamental question: assuming a viable business model, what actions do we have to take today to protect the firm and ensure we’re still here in 10, 50, or 100 years? The sustainability of any successful business is directly related to the foresight and expertise exercised by its risk managers and risk advisors. I discussed the natural evolution of this approach with my audience in Hong Kong and how the sustainability approach casts a net wide enough to capture and address a broader range of the risks a company could very well face.
But life is not just about risk – it’s also about opportunity. Asia is a region that is already proving an engine of growth for the global economy. All of us engaged in global commerce – policymakers, bankers, entrepreneurs, consumers, insurers, shippers, and more – have a role to play in maintaining this growth. If we play our cards right, we’ll see continuing prosperity in Asia and a return to growth and dynamism in Europe and the United States – goals to which we all aspire.
Thanks for reading this inaugural posting, and please let us know your own thoughts about this and the other ideas we’ll discuss on WillisWire.