Munich Re calls for national CROs to improve central risk oversight

Munich Re has called for structured risk management at national levels to help countries better respond to natural catastrophes, highlighting the potential for governmental chief risk officers to provide central risk oversight.

In a media briefing in Glasgow held as part of this week’s COP26 talks, Munich Re CEO Joachim Wenning said the group was keen to develop more public-private partnerships to build on existing initiatives such as CCRIF, for which it currently provides reinsurance.

“Having a governmental CRO of sorts would mean having someone who knows all the main risks to society – and who is responsible for the requisite preventive measures and disaster recovery alike,” Wenning said.

“This could also be the person who coordinates demand for PPP solutions, which will in turn help build the resilience of a country.”

Wenning said structured risk management at a national level could ensure prompt action in an emergency, similar to the way a chief risk officer operates in the private sector. In many countries, disaster prevention and response is currently hindered by poorly defined responsibilities.

The reinsurer called for increased international financing to help build resilience against disasters, with industrialised countries having yet to meet their pledge to provide $100bn a year towards mitigation and adaptation measures for developing countries.

Wenning said partnerships with governments, which are essential to finding needs-oriented insurance solutions for low-income countries, “have not yet been sufficiently developed”.

He said countries will also need to develop roadmaps around the transition to a decarbonised economy, highlighting the importance of coordinated financing for net zero technologies.

Such a framework could provide guidance for financial markets around where to invest and insure, he said.

“It is only by making sufficient investments in the net-zero transition and in the decarbonisation of industrialised societies that we will be able to maintain our standard of living and mitigate societal hardships – while also paving the way for greater prosperity in poorer countries,” Wenning said.

“Climate policy will succeed if it takes into account the needs of businesses. For the business world, transparency and reliability are vital,” he added.