Geneva Association explores impact of ‘slowbalisation’ on re/insurers

A new report by the Geneva Association explores the impact of ‘slowbalisation’ on insurers and reinsurers, highlighting challenges such as weakened global cooperation and limited risk diversification, while offering strategies to adapt to emerging risks and opportunities.

The report notes that the global economy is shifting from integration to fragmentation as nations prioritise security over efficiency.

It warns that geoeconomic fragmentation could disrupt global risk management by weakening cooperation on global risks like climate change, limiting risk diversification in underwriting and investments, and creating challenges due to differing regulations.

However, the report also identifies growth areas for re/insurers, including political risk and renewable energy insurance.

The report outlines three scenarios – mild, moderate, and extreme – for geoeconomic fragmentation, along with strategies for insurers to respond to each.

Jad Ariss, Managing Director of the Geneva Association, said, “The tides of globalisation are shifting, with geo-economic fragmentation posing both challenges and opportunities for the insurance sector. Insurers must navigate rising volatility, restricted diversification, and harder-to-mitigate global risks, while seizing growth opportunities. Our report provides actionable strategies for insurance companies to thrive amid this evolving landscape.”

Kai-Uwe Schanz, Director Macro & Geoeconomic Shifts at the Geneva Association and author of the report, added, “Geoeconomic fragmentation signals a shift toward national security and resilience over economic efficiency, disrupting free trade and globally integrated supply chains. While full-scale deglobalisation remains improbable, insurers face rising challenges – from greater exposure to climate and cybersecurity risks to less scope for diversification in underwriting and investment management. Strategic agility will be key to managing volatility and unlocking new opportunities in this evolving environment.”

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