Rethinking risk: How Steve Arora sees disruption changing the insurance industry

During the summer vacation, including today, thebrokernews podcasts are also taking a break. Instead, we will be showing interesting video interviews and podcasts from our partner The INGAGE Institute. Today with Steve Arora.

In a candid conversation with Philippe Séjalon Steve Arora renowned former CEO of Axis Re, entrepreneur, board member, advisor and WEF Young Global Leader, made a bold diagnosis of the biggest challenges and opportunities facing the insurance and reinsurance industry. From climate concerns to the opportunities and risks of technology, Arora laid out a vision for an industry on the brink of reshaping itself.

The global insurance and reinsurance sector is facing a unique combination of challenges. “We have a mix of rising inflation, rising interest rates, slow growth, supply chain issues and financial market volatility,” said Arora, painting a picture of an industry being tested by economic turmoil. He did not shy away from geopolitical issues either, pointing to the ongoing wars and “growing tensions between many nations” as signs of increasing claims complexity.

“Society will be confronted with these effects, and if you are in a risky business, you have to assume that the frequency of complex claims will continue to increase.”

Pricing power and market hardening: a long-awaited change

After years of poor profitability, particularly in reinsurance, Arora believes the industry is on the verge of a shakeout. He emphasized: “It has been a very difficult period with six years of poor profitability … After Hurricane Ian, the market finally seems to be shifting … Prices will go up, and I think that gives us a real opportunity for strong returns.” This tougher market is overdue, according to Arora, and signals a return to a sustainable insurance industry.

Innovation on the horizon: blockchain, AI and the metaverse

Arora believes the industry is ripe for disruptive change in every respect. He described the sector as “crying out for disruption”, as technologies are ready to turn long-standing processes upside down. Arora was cautious about blockchain, saying that while the technology offers “great value in terms of trust and security”, there are still “major barriers” to widespread adoption, including the need to redefine contracts.

Artificial intelligence and the metaverse also received attention. Arora believes that they can reshape everything from risk assessment to collaboration, even if “some big questions … need to be clarified”. He encourages managers to embrace these changes and not shy away from them.

Redefining relationships: Trust and partnership in the new era

Customer loyalty needs to be reconsidered. Arora pointed out the need to “clarify and possibly redefine” partnerships, as traditional relationship models were often one-sided. Given the changing market dynamics, he sees an opportunity to create more balanced, mutually beneficial connections along the entire value chain.

The human factor: leadership, balance and inspiration

For Arora, leadership is about more than strategic decisions; it’s about personal resilience, adaptability and authenticity. He revealed his own recipe for balance: hiking in the Swiss Engadine and spending time with his family. His advice to his colleagues: Recognize the broader social role of the industry, remain adaptable and put people first.

The path to the future: embracing change to remain relevant in the long term

Steve Arora’s perspective is clear: while the insurance and reinsurance sector is “facing significant change”, its leaders must seize the moment. Whether coping with macroeconomic shocks or pioneering digital transformation, success will come to those who innovate, collaborate and focus relentlessly on the future.

Binci Heeb

The interview was conducted 2 years ago.

Also read and listen to: Europe’s €10 billion bet on deep tech: Insights from Michiel Scheffer