The Geneva Association is an international think tank for strategically important insurance and risk management issues.
Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.
The Geneva Association identifies fundamental trends and strategic issues where insurance plays a substantial role or which influence the insurance sector. Through the development of research programmes, regular publications and the organisation of international meetings, The Geneva Association aims to enhance the understanding of risk and insurance matters and acts as an information creator and disseminator. It acts as the voice of the largest insurance groups worldwide in the dialogue with international institutions. In parallel, it advances—in economic and cultural terms—the development and application of risk management and the understanding of uncertainty in the modern economy.
In this role, it is primarily concerned with studying climate risk and the role insurance can play in disaster risk reduction; the rising costs related to ageing populations; retirement funding; liability concerns; the impact of digitalization and cyber risk on insurance; and the issue of financial stability in insurance and the development of an efficient regulatory framework.
Established in 1973, The Geneva Association, officially the “International Association for the Study of Insurance Economics”, is based in Zurich, Switzerland and is a non-profit organisation funded by its members.
The Geneva Association membership comprises a statutory maximum of 90 chief executive officers (CEOs) from the world's top insurance and reinsurance companies. It organises international expert networks and manages discussion platforms for senior insurance executives and specialists as well as policy-makers, regulators and multilateral organisations. The Chairman ad interim of The Geneva Association is Charles Brindamour, CEO of Intact Financial Corporation.
The general secretariat handles the daily operations of the association. Its work is directed by the secretary general, and the deputy secretary general and head of insight. Currently these positions are held respectively by Jad Ariss and Antoine Baronnet.
All of The Geneva Association's activities are pursued by means of research, publications and the organisation of international conferences. In addition, The Geneva Association organises international expert networks and manages discussion platforms for senior insurance executives and specialists as well as policy-makers, regulators, academics and international organisations. The Geneva Association's annual General Assembly is the most prestigious gathering of leading insurance CEOs worldwide. Speakers at The Geneva Association's seminars have included Nobel Prize winners such as Kenneth J. Arrow,[1] Josef Stiglitz,[2] as well as important figures of the political and economic arena such as former British Prime Minister Tony Blair; head of the International Monetary Fund, Christine Lagarde; former U.S. Vice President Al Gore; Chancellor of the Exchequer, George Osborne; and Governor of the Bank of England and Chairman of the FSB, Mark Carney.
The Nobel Prize is a set of annual international awards bestowed in several categories by Swedish and Norwegian institutions in recognition of academic, cultural, or scientific advances.
Anthony Charles Lynton Blair is a British politician who served as Prime Minister of the United Kingdom from 1997 to 2007 and Leader of the Labour Party from 1994 to 2007. He was Leader of the Opposition from 1994 to 1997. As of 2017, Blair is the last UK Labour Party leader to have won a general election.
Christine Madeleine Odette Lagarde is a French lawyer and politician who is currently serving as the Managing Director (MD) and Chairwoman of the International Monetary Fund (IMF). Lagarde has held the position since 5 July 2011.
History
[3] The Geneva Association was founded under the initiative of a committee which met for the first time in Paris on 22 September 1971. This founding committee was constituted by the following people:
A committee is a body of one or more persons that is subordinate to a deliberative assembly. Usually, the assembly sends matters into a committee as a way to explore them more fully than would be possible if the assembly itself were considering them. Committees may have different functions and their type of work differ depending on the type of the organization and its needs.
Emil Frey, general manager, Mannheimer Versicherung (Mannheim);
Georges Martin, president, Royale Belge (Brussels);
Allianz SE is a European financial services company headquartered in Munich, Germany. Its core businesses are insurance and asset management. As of 2014, it is the world's largest insurance company, the largest financial services group and the largest company according to a composite measure by Forbes magazine, as well as the largest financial services company when measured by 2013 revenue. The company is a component of the Euro Stoxx 50 stock market index.
Assicurazioni Generali S.p.A. or simply Generali is an Italian insurance company, the largest in Italy and third in the world. It has its headquarters in Trieste. In 2010, Assicurazioni Generali Group was the second largest insurance group in the world by revenue after AXA.
The constitutive assembly of The Geneva Association took place in Paris on 27 February 1973, at the headquarters of La Paternelle (today part of the AXA Group). The following companies were represented by their president or CEO: Allianz, Münchener Rück, Aachener & Münchener, and Victoria for Germany; Commercial Union, Royal and Mercantile & General for the United Kingdom; Erste Allgemeine for Austria; Royale Belge for Belgium; UAP, AGF, Paternelle, Préservatrice and SAFR for France; Generali, RAS, Reale Mutua, INA and Fondiaria for Italy; Nationale Nederlanden for the Netherlands, and Swiss Re for Switzerland.
Allianz France is a French insurance company, headquartered in Rue de Richelieu, Paris.
Swiss Reinsurance Company Ltd, generally known as Swiss Re, is a reinsurance company based in Zurich, Switzerland. It is the world’s second-largest reinsurer. It acquired GE Insurance Solutions in 2006. Founded in 1863, Swiss Re operates through offices in more than 25 countries. Swiss Re was ranked 118th in Forbes 2000 Global leading companies 2016. It was also ranked 313th in Fortune Global 500 in 2015.
The first president of The Geneva Association was Prof. Raymond Barre, French prime minister from 1976 to 1981.
The Geneva Association was established for the purpose of promoting economic research in the sector of risk and insurance.
Former Presidents of The Geneva Association:
Raymond Barre †, Paris (1973-1976)
Fabio Padoa †, Trieste (1976-1983)
Julius Neave †, London (1983-1986)
Reimer Schmidt †, Aachen (1986-1990)
Brian Corby, London (1990-1993)
Jan H. Holsboer, Amsterdam (1993-1999)
Walter Kielholz, Zurich (1999-2003)
Henri de Castries, Paris (2003-2008)
Martin J. Sullivan, New York (2008)
Jacques Aigrain, Zurich (2008-2009)
Nikolaus von Bomhard, Munich (2009-2013)
Mike McGavick, Stamford (2013-2018)
Mark Wilson, London (2018)
Former Secretaries General of The Geneva Association:
Orio Giarini, Geneva (1973–2000)
Patrick M. Liedtke, Geneva (2000–2012)
John H. Fitzpatrick, Geneva/Basel (2012-2014)
Anna Maria D'Hulster, Geneva/Zurich (2014-2019)
Membership
The Geneva Association has members from 28 countries around the world. Its members are the chief executive officers of some of the largest (re)insurance companies in the world, and they are members in a personal capacity. The statutory limit to the number of members is 90. Applications of new members are examined by the board of directors at the proposal of the chairman and, if recommended, are submitted to the general assembly for approval by majority vote.
Key research topics
Financial stability and regulation
After the financial crisis erupted in 2008, The Geneva Association set up a special working group specifically to analyse the relationship between systemic risk, financial stability and insurance. The association has since published ten reports, studies or articles[4] on various aspects of financial stability and regulation in insurance, including the identification of systemic risk, designation methodology, surrenders, insurance and resolution, variable annuities, and global capital standards.
Through both the Insurance and Finance and PROGRES programmes of The Geneva Association, there has been an ongoing dialogue with the IAIS and other supervisory bodies. In the discussions on systemic risk regulation however, a multitude of organisations such as the G-20, the IMF, the OECD to name but a few, have become involved and influential in the setting of new insurance systemic risk regulations. As a result, the association has broadened its discussions and on several occasions, has engaged these other organisations directly in the form of open letters or comments to address points made.
Climate risk
In May 2008, following a mandate from its members at the 2008 General Assembly, The Geneva Association began its Climate Change and Insurance (CC+I) research project in response to one of the most multi-faceted challenges to the insurance industry since its inception.
On 6 September 2010, The Geneva Association and three other initiatives (ClimateWise, MCII and UNEP-FI) launched a joint statement that calls on governments worldwide to harness risk management techniques and insurance expertise to help implement climate change adaptation measures in the developing world. In the context of the increasing economic and human costs of climate change in the developing world, the statement seeks to highlight how governments can unlock significant potential to increase the protection and reduce the vulnerability of developing world populations and economies.
“The insurance industry is uniquely positioned to provide specialised services for countries and businesses facing climate risks worldwide. Insurers have the expertise to develop a broad range of affordable private insurance solutions for climate risks. Insurance mechanisms are an effective tool to promote climate related risk management and reduction; The Geneva Association recognises that no stakeholder can succeed alone in solving the challenges of climate change. Insurance can and should be a strong complementary mechanism in a wider framework of adaptation.”[5]
In 2011, the name of the project was changed to Climate Risk and Insurance (CR+I). The objectives of the climate-linked research are to identify and analyse:
issues that are of specific relevance to the insurance industry, such as the likely range of future claims costs, new business opportunities and scenario testing; and
external challenges to be addressed at the political, educational and social levels, such as the role of governments and public-private cooperation, to mitigate the impact of natural catastrophes.
To this end, The Geneva Association has issued several reports and studies on climate risk and disaster reduction,[6] such as a review of 2011 marked in particular by the tsunami in Japan and, most recently, a study on the warming of the oceans.
The Climate Risk Statement On 20 May 2014, following The Geneva Association's 41st General Assembly in Toronto, 67 chief executives of the world's leading insurers confirmed their commitment to The Geneva Association's Climate Risk Statement – a set of guiding principles on the substantial role insurance can play in global efforts to tackle climate-related risks. The statement provides the foundations on which the direction of future climate-related initiatives by The Geneva Association will be based.
This statement confirms the Kyoto Statement signed in 2009, with additional signatures and reflecting the latest scientific evidence. Michael Butt, chairman of AXIS Capital and co-chair of the Climate Risk and Insurance working group, said: "The Climate Risk Statement Provides a reference point for policymakers, non-governmental organisations, customers, as well as the insurance industry itself, on the ways in which insurance can complement global efforts to mitigate and adapt to climate change. Our industry can make a considerable contribution to global efforts to reduce the impact of climate change, but reaching its full potential will require greater collaboration with governments and global governance bodies such as the United Nations."
The Statement received the full support of former U.S. Vice-President Al Gore, who spoke at The Geneva Association's General Assembly in Toronto: "The insurance industry has long ago taken the initiative on climate risk, and with this statement commits to do even more. As an industry it has the capacity to work with policymakers on the mitigation of climate-related risks. If market forces are leveraged and elected officials and regulators are engaged wisely, insurers have so much to offer, and can help the world deal with this serious issue. Most people don't want to think about long-term risk. Now that our world is facing the gravest risks it has ever faced, the world should turn to insurers for advice. In turn, insurers must be more vocal about the challenges they see."
Global ageing
The cost of pensions and retirement policy challenges are among the key issues in policy responses to the European sovereign debt crisis since 2010. The challenge of financing retirement is largely due to improved longevity and lower fertility rates that are not properly represented in the cost of retirement.[7] Adding to this concern about how to support a growing number of pensions living longer lives is the increase in age-related illnesses such as dementia, and the health-care costs of an ageing population.
The Geneva Association has been studying these issues through its Life and Pensions and Health and Ageing programmes for many years proposing solutions to the challenges they raise that are now more urgently needed than ever.[8]
The Public Pensions Crisis in the U.S.
On 3 December 2013, Detroit became the largest city in the U.S. to become legally eligible for Chapter 9 bankruptcy. Its ballooning deficits and large pension shortfall are not an isolated case, however. Across the country, states have posted funding shortfalls or more than a trillion dollars.
In its report on this crisis, The Geneva Association examines the issues at the root of this crisis and suggests that the non-payment of annual required contributions and an unbalanced structure to pension planning are among the most significant challenges to overcome.
Executive summary of the report
• A 2010 report by the Pew Center on the States highlights the trillion-dollar shortfall facing state and local retirement systems in the U.S. due to policy choices and a lack of fiscal discipline, namely the failure to make annual payments for pensions systems at actuarially recommended levels and expanding benefits without considering their long-term costs. The majority of states (34) have a funding level below 80 per cent.
• The Geneva Association has long advocated a four-pillar approach to sound pension planning: (1) a universal public system such as Social Security, (2) an occupational pensions system supported by employers under government financial supervision, (3) private savings using financial intermediaries and (4) continued employment, through the removal of barriers to partial employment of retirees.
• Excessive reliance on one of the four pillars—particularly a public system or private savings only—strains public finances and/or an individual's ability to finance retirement adequately. The Geneva Association has also highlighted the unnecessary losses of human capital resulting from restrictions on the employment of retirees. Human capital, i.e. the ability to earn income, should be valued, particularly in societies with ageing populations.
• The Geneva Association calls for more in-depth study of solutions to the pension crisis the U.S.
Meetings, seminars and conferences
To achieve its main goals, The Geneva Association organises or co-organises a number of meetings, seminars and conferences. The most important meeting of The Geneva Association is its general assembly that takes place every year. At this occasion, key economic issues are discussed by members, the CEOs of the world's leading insurers, special observers including regulators and guest speakers from inside and outside the industry. In 2010, former Prime Minister of the United Kingdom, Tony Blair, provided a keynote speech. The Geneva Association regularly organises international conferences which are linked to its research programmes.[9]
Prizes, research grants, and awards
In its role of promoting research in risks and insurance economics, The Geneva Association also awards a series of prizes and research grants every year. It also awards two research grants for submissions, usually in the form of a doctoral thesis, carried out in the field of risk and insurance economics. Subsidies of up to CHF 3,000 are also granted to authors of university theses on risk and insurance economics to help defray printing costs and to support the publication of high quality work.
The Geneva Association / IIS Research Awards The Geneva Association and the International Insurance Society (IIS) have joined in a programme with business leaders in insurance to sponsor applied research in the insurance area. The purpose of the research programme is to create original, practically oriented research which addresses current business issues and problems of concern to senior insurance executives around the world. The programme is designed to fulfill a need of business to investigate subjects which directly influence daily business operations and operational business concerns or issues on a practical level. Researchers present the research selected to business executives at the yearly meeting of the International Insurance Society. The research is published and distributed by both the IIS and The Geneva Association in a special edition of The Geneva Papers on Risk and Insurance—Issues and Practice. Research Awards for the best-qualified papers are presented in an amount up to $10,000.
The Ernst-Meyer Prize The Geneva Association awards every year the prestigious Ernst-Meyer Prize for university research work, usually in the form of a doctoral thesis, which makes a significant and original contribution to the study of risk and insurance economics.
Research Grants Every year, the association offers two grants for research into risk and insurance economics, on various subjects in economic theory and practice.
Publications
The Geneva Association publications take six different forms in addressing its various audiences:
Two academic journals, The Geneva Papers on Risk and Insurance—Issues and Practice and The Geneva Risk and Insurance Review (formerly The Geneva Papers on Risk and Insurance Theory);
Research reports, presentations and white papers on key issues of concern to the industry, policymakers and academics;
Ad hoc reports on major themes discussed throughout a part of the year, otherwise known as The Geneva Reports;
Conference Papers, or working papers from conferences and meetings; and,
Books written by The Geneva Association staff and/or external collaborators.
The Geneva Papers on Risk and Insurance—Issues and Practice[10][11] Founded in 1976 and published quarterly by Palgrave, The Geneva Papers publish papers which both improve the scientific knowledge of the insurance industry and stimulate constructive dialogue between the industry and its economic and social partners. It is essential reading for insurance academics and researchers, insurance industry executives and other professionals who are searching for a deeper insight into the strategic options for their sector. It bridges the gap between these groups, highlighting overlapping areas of interest and providing mutually beneficial research and dialogue.
The Geneva Risk and Insurance Review[12][13] targets academics and university scholars in economics. The Review is published by Palgrave Macmillan in annual volumes of two issues. Its purpose is to support and encourage research in the economics of risk, uncertainty, insurance and related institutions by providing a forum for the scholarly exchange of findings and opinions.
Research reports, presentations and white papers[14] The Geneva Association publishes research on key issues such as financial stability, climate risk, global ageing, digitalization, cyber risk, and the insurance protection gap. It issues presentations in support of its research (e.g. a cross-industry benchmark study comparing the 28 banks designed as 'global systemically important' and 28 of the largest global insurers), while white papers are intended primarily to respond to draft policy papers presented for public consultation by regulatory bodies.
Conference Papers[15] These are the working paper series of The Geneva Association. These documents present intermediary or final results of conference proceedings, special reports and research done by The Geneva Association. Most of these documents are available freely on The Geneva Association's virtual library, except for those in restricted use, which remain in the private area. The Geneva Association Working Paper Series Etudes et Dossiers appear at irregular intervals about 10-12 times per year. Distribution is limited. Hard copies are automatically sent to all of The Geneva Association's members.
Books The Geneva Association publishes books in relation with its research programmes, such as reports on systemic risk and insurance, inter alia the seminal report on Systemic Risk in Insurance - An analysis of insurance and financial stability published in March 2010, and the book The Performance Economy republished end of 2010. All information on Geneva Association publications are available online.[16]
Related Research Articles
Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system. This may be handled by either a government or non-government organization. Financial regulation has also influenced the structure of banking sectors by increasing the variety of financial products available. Financial regulation forms one of three legal categories which constitutes the content of financial law, the other two being market practices, case law.
In finance, systemic risk is the risk of collapse of an entire financial system or entire market, as opposed to risk associated with any one individual entity, group or component of a system, that can be contained therein without harming the entire system. It can be defined as "financial system instability, potentially catastrophic, caused or exacerbated by idiosyncratic events or conditions in financial intermediaries". It refers to the risks imposed by interlinkages and interdependencies in a system or market, where the failure of a single entity or cluster of entities can cause a cascading failure, which could potentially bankrupt or bring down the entire system or market. It is also sometimes erroneously referred to as "systematic risk".
Insurance in India refers to the market for insurance in India which covers both the public and private sector organisations. It is listed in the Constitution of India in the Seventh Schedule as a Union List subject, meaning it can only be legislated by the Central Government only.
The Four Pillars is a research programme set up in 1987 by the Geneva Association, also known as the International Association for the Study of Insurance Economics. The aim of the Four Pillars research programme is to study the key importance in the new service economy of Social Security, Insurance, Savings and Employment. The programme focuses on the future of pensions, welfare and employment. The Geneva Association launched its Four Pillars research programme with a view to identifying possible solutions to the issue of the future financing of pensions and, more generally, to organising social security systems in our post-industrial societies. Demographic trends - especially increased life and health expectancy - could be seen as positive if we were able to devise ways of enabling "ageing in good-health populations" to make a valid economic and social contribution to the functioning of our service economies over the decades to come.
Insurance Economics is a research programme set up by the Geneva Association, also known as the International Association for the Study of Insurance Economics.
PROGRES is a research programme set up by the Geneva Association, also known as the International Association for the Study of Insurance Economics. It focuses on questions related to regulation, supervision and international co-operation of insurance and financial services as well as other legal issues of importance. The research programme manages The Geneva Association's co-operation with the supervisory authorities around the world and in particular with the International Association of Insurance Supervisors. The objectives of PROGRES are:
Health and Ageing is a research programme set up by the Geneva Association, also known as the International Association for the Study of Insurance Economics. The Geneva Association Research Programme on Health and Ageing seeks to bring together facts, figures and analyses linked to issues in health. The key is to test new and promising ideas, linking them to related studies and initiatives in the health sector and trying to find solutions for the future financing of healthcare.
Insurance and Finance is a research programme set up by the Geneva Association, also known as the International Association for the Study of Insurance Economics. This research programme on insurance and finance comprises academic and professional research activities in the fields of finance where they are relevant to the insurance and risk management sector.
Risk Management is a research programme set up by The Geneva Association, also known as the International Association for the Study of Insurance Economics. The focus of this programme is manifold and address the following issues: fostering the use of the tools of risk assessment and risk management in new fields of application such as policy making; providing a platform between the insurance community, the engineering and academic communities and policy makers to discuss risk issues; promoting the concept of the insurability of risks as the natural borderline between State legislation and the market economy; identifying new opportunities for insurers in the emerging sustainability concept in order to enlarge the field of insurable risks.
Bond insurance is a type of insurance whereby an insurance company guarantees scheduled payments of interest and principal on a bond or other security in the event of a payment default by the issuer of the bond or security. As compensation for its insurance, the insurer is paid a premium by the issuer or owner of the security to be insured. Bond insurance is a form of "credit enhancement" that generally results in the rating of the insured security being the higher of (i) the claims-paying rating of the insurer and (ii) the rating the bond would have without insurance.
The European Insurance and Occupational Pensions Authority (EIOPA) is a European Union financial regulatory institution that replaced the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS). It is established under EU Regulation 1094/2010.
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The International Association of Deposit Insurers (IADI) was formed on 6 May 2002 with the purpose of sharing deposit insurance expertise with the world and contributing to the stability of financial systems as the standard setter for deposit insurance with a global and expanding membership. IADI is a non-profit organisation constituted under Swiss Law and a separate legal entity domiciled at the Bank for International Settlements (BIS) in Basel, Switzerland.
The Swiss Insurance Association SIA is the umbrella organisation representing the private insurance industry. Its membership consists of some 80 primary insurance companies and reinsurers with 50,000 employees in Switzerland. In Switzerland, the SIA members generate over 90 per cent of the premium volume in private insurance.
Robert Holzmann is an Austrian economist. He held various positions at the University of Graz (1973–1975), University of Vienna (1975–1992), University of Saarland (1992–2003), and University of Malaya (2012-2015), and worked at the Organisation for Economic Co-operation and Development (OECD) (1985–1987), the International Monetary Fund (IMF) (1988–1990), and the World Bank (1997–2011). At the World Bank headquarters in Washington, D.C., he served as Sector Director (1997–2009), Research Director (2009–2011), and acting Senior Vice-President (2002–2003). From 1983 to 2005, he directed the Ludwig Boltzmann Institute for Economic Policy Analyses (Vienna). He currently holds an honorary professorship at the University of New South Wales (Sydney). He is a Research Fellow at IZA and CESifo (Munich). In 2014 he was elected Full Member (Fellow) of the Austrian Academy of Sciences. He consults for governments, international organizations, and research institutions.
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