Europe faces extraordinary challenges
The title is really an understatement. Compared to one year ago, the news items in newspapers, tv and social media are dominated by alarming news and crises.
Stripping them down a little we start with the ongoing transformation for more sustainability, including the ‘greening of economies’, but certainly not restricted to this. We all experience warmer summers and drying up rivers, but also more extreme weather events like floods.
And what about the transformation towards a digitalised society? Sure, that is the way forward and it can help us with sustainability and inclusiveness, but we must not close our eyes to the material changes and significant risks.
Dominating the news is the ‘with-war Europe’. We would have liked to be in a post-war Europe, but reality is different. The ongoing impact is horrific for the Ukrainian society, but it also affects the rest of Europe’s energy supply and food supply. Societies are cracking down on external dependencies – but this will have implication for collaboration.
Let’s also not forget that we are now in a ‘with-covid world’ rather than a ‘post-covid world’. The persistent fragmentation and fragility impact the economies, and especially the workforces.
How does this effect the economy and insurance?
Just summing up some effects here, and I may have omitted several more:
- recession – partly shadowed by significant fiscal measures
- the return of energy supply shortage driven inflation
- swiftly developing interest rates
- decreasing ability to finance savings and protection products – protection gaps
- return of unsustainable products
- increasing non-life technical provisions
- decreasing options for global diversification
- financial repression – politics “guiding” and “incentivising” investments
Most of the above affect all undertakings in the same manner – it is not idiosyncratic, it is systematic
While we react to this, we must avoid that this is drawing attention away from defining our strategy to more actively shape our longer term challenges:
- sustainability transformation
- digital transformation
How can actuaries help our societies?
Well, first and foremost, we must continue being an independent, forward-looking voice of reason. Take a holistic view on the challenges and the consequences of certain measures, including analysing for unintended consequences.
In addition, we should continue to strengthen education, professionalism, conduct, and discipline.
We must stick to our proven methods of analysis and well reflected advice, especially when the pressure is on. We should enable that our members equip themselves with additional competencies that are demonstratable throughout Europe. And we should continue to foster the exchange within the European community of actuaries.
The AAE is in a good place, since the above covers all strategic objectives.
To make this blog a little more personal, I share the elements which I believe the AAE can (further) develop:
- ramp up our volunteers’ base to enable efficient contribution in an effective structure of working groups and task forces
- better enable our leading volunteers to contribute by assigning clear mandates and responsible persons
- use our financial resources to establish professional support for strategic topics
- establish professional competencies that are demonstratable throughout Europe
If we can make some progress here, we as AAE and actuarial community can certainly make a difference. That is what I believe in, and what I am driven to further develop.
This blog is written on a personal title and based on the maiden speech given at the AAE General Assembly held in Rome on 7 October 2022.
1 November 2022