(Antonio Huertas Mejías, CEO, MAPFRE. Source: MAPFRE.)
Far from being a passing fad, AI may be one of the most disruptive technologies humanity will ever develop, noted Antonio Huertas Mejías, CEO, MAPFRE (Madrid), speaking at the Geneva Association’s 50th Summit, held in Zurich, Switzerland, 28-29 November. Huertas’ keynote address, “Insuring the Future, Safeguarding the Planet,” touched on a variety of topics related to the adaptation of the insurance industry to a changing world including the need for innovation, regulation of AI, the need for cyber risk coverage, and the industry’s role in addressing climate-change related risks. Founded in 1973, The Geneva Association is the only international association of insurance companies; its members are insurance and reinsurance CEOs. The organization serves as a think tank for the global insurance industry, producing research in collaboration with its members and their companies, academic institutions and multilateral organizations.
“[AI], is a tool that will most likely mean an absolute transformation of many aspects of our lives, not only on the economic level,” Huertas added. “It is still early to predict how it will develop, but what is incontestable is that all the boards of directors and management committees of all our companies are already analyzing and internalizing it, and those who do not do so run the risk of being left out of the game.”
The leaps in AI, and generative AI is progressing on an exponential scale, but will bring benefits to the insurance industry and its clients, Huertas asserted. “My vision is quite optimistic, I believe that if we do it right, we can turn these technologies into powerful tools at the service of workers, improving their skills and experience, while boosting the economy in general,” he said.
Need for AI Regulation
However, to realize the potential benefits of AI, the industry will need a management framework for operational and regulatory risks and must legislate on ethical risk, Huertas cautioned. “We must move forward in the ethical and responsible development of artificial intelligence, but in a global market, Europe has to find the balance between regulation—which is undoubtedly necessary—and the development framework for these technologies,” he elaborated. “It is necessary to experiment with this technology precisely to know its limits and verify ethical operation free of bias towards people and their circumstances.”
Responding to Unprecedented Cyber Risk
Today’s world digitized world brings unparalleled conveniences and efficiencies, Huertas said, but it also exposes us to unprecedented risks. “The threat of cyberattacks, data breaches, and digital disruption looms large, capable of toppling industries and economies with a few keystrokes. As insurers, we stand at the crossroads of both challenges and opportunities in this digital frontier.”
Huertas alluded to the challenges of cyber enumerated in a Geneva Association 2022 report: to expand the limits of insurability, insurers need to be proactive in assessing feasible options for sharing cyber risks, including with governments via Public Private Partnerships. “Such collaborative efforts between insurers and governments will enable cyber protection gaps to be narrowed and ensure the full societal benefits of cyberspace can be realized,” he said.
With those challenges, cyber risk brings profound opportunities for the industry, Huertas stressed. “It allows us to re-imagine our role as partners in risk mitigation, empowering organizations to embrace digital transformation with confidence,” he said. “By crafting innovative policies that encompass not only financial protection but proactive risk assessment, incident response, and cyber hygiene education, we enable our clients to navigate the digital age with resilience.”
Safeguarding the Planet
Huertas addressed the issue of environmental challenges, including climate change, deforestation, biodiversity loss. “As insurers, we bear witness to the devastating effects of natural disasters and their impact on communities and economies,” he said. “It is our duty to drive change, to mitigate risks, and to create a sustainable future for generations to come.”
“We must pioneer new products that incentivize sustainable practices and investments,” Huertas continued. “By aligning our interests with those of a healthier planet, we can shape markets and direct capital towards environmentally responsible initiatives. Let us embrace the concept of ‘green insurance’ not as a niche, but as an integral part of our industry’s evolution.”
Need for Innovation
Addressing the topic of adaptation to change more broadly, Huertas addressed the need for the insurance industry to cope with a changing competitive landscape through increased innovation.
“There is no doubt that insurance has to innovate as much as possible, but it cannot lose sight of the fact that in the end, it is also a financial business that must meet demanding requirements of solvency, capital, and financial return,” he said. “We have seen how in recent months the tightening of financial conditions has called into question some of these models.”
Innovation cannot be regarded as a ‘nice to have,’ but rather must be a part of the industry and its companies’ business purpose, Huertas emphasized. “‘We take care of what matters to you’ is MAPFRE’s motto,” he said. “But what if what matters to our customers is changing? Well, we must change too. If we want to continue contributing to social progress, if we want to continue participating in the transformation that society is experiencing as a result of the technological changes that are coming, we all must place transformation at the center of our strategy.”