Page 84 - BIPAR Annual Report 2020_EN

Brokers’ Committee
A word from the Chairman of the Brokers’
Committee, André Van Varenberg
Yesterday, today, from Covid-19 to the world of tomorrow
Covid-19
This pandemic has taken us all by surprise.
No one was ready.
Nothing was ready.
As I write these lines, health and economic uncertainty remain considerable. No one is yet fully aware of the impact,
except that it will be devastating. Let us recall that the Brokers’ Committee, without having predicted anything, had
on the agenda of its meeting held at the end of January in Brussels, two topics which were Solvency II and, the other,
our professional income through a stocktaking of the ban on commissions in Europe.
In these times of progressive unlockdown, it is indeed to unsolvable problems of liquidity and solvency that economic
players are giving absolute priority, as a matter of extreme urgency.
Our profession is a privileged one. It invests moderately and is initially protected from the pressures of a cash flow
on the ropes, thanks to the mechanism of commissioning as opposed to fees.
However, our portfolios will be affected in a delayed manner by the distressing wave of bankruptcies and insolvencies
that are bound to hit our customers. Voluntary government interventions, which will themselves create an abyssal
public debt, will not be enough.
Once the most gaping wounds have been healed, we will have to learn lessons, rethink or reinvent the added value
of our profession. Thus, in terms of emerging and catastrophic risks, solutions will have to be put in place. Unless
these solutions become mandatory, we brokers will have to take them into account when analysing needs and
exercising our duty to provide information and advice because, although the need for protection is intense after the
occurrence of a disaster, the phenomenon of forgetting quickly takes over.
Catastrophic risks (*)
Without going back to Methuselah, the OECD has long identified natural disasters, technological accidents, infectious
diseases, terrorism and food safety as the major risks of the 21st century. Incidentally, let us recall that the Seveso
dioxin cloud (1976) was to lead, 20 years later, to the Directive of 9/12/1996 on the risks of major industrial accidents.
Numerous experts and researchers in many countries and universities have set a framework for our thinking in
this field. In this respect, I recommend reading the study “Coverage of potential catastrophic risks. Towards an
economic theory of insurability of uncertainty” (“Couverture des risques catastrophiques potentiels. Vers une
théorie économique de l’assurabilité de l’incertitude”) by Sophie Chemarin published in Assurances et Gestion des
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Risques (Vol 73 -2, July 2005). The author puts into perspective the conceptual outlines to be taken into account in
order to build the most appropriate insurance responses to the challenges posed by catastrophic risks.
Sophie Chemarin distinguishes, on the one hand, proven major risks, i.e. those for which the uncertainty can be
probabilised and objectivised and, on the other hand, uncertain major risks, i.e. non-probabilisable, for which there
is a lack of repetition of past experience and for which, consequently, there is no scientific basis for measuring the
uncertainty.
In any event, this uncertainty gives a new dimension to large-scale risks and is likely to call into question the financial
and structural capacities of our companies to manage them. Faced with such an upheaval in risk management,
traditional insurance and all risk-sharing tools (pools, alternative risks transfer, cat bonds, captives, etc.) will be
sought after.
The three-stage solutions previously implemented for natural disasters, terrorism ... may become the benchmark.
What will the world be like tomorrow?
After the Glorious Thirties and the era of Rhine capitalism, 1979 was a crucial date. Amin Maalouf called it “the
year of the great turnaround”. Ronald Reagan became President of the United States and Margaret Thatcher Prime
Minister of Great Britain. Both promoted less State, individual fulfilment and crush collective equilibrium. This was
the starting point of a frantic search for profit, globalisation, the financialisation of the economy and the vertiginous
widening of inequalities with regard to an unprecedented production of wealth.
How are things going to turn out tomorrow?
The role of the State has been dramatically rehabilitated and the importance of public services brought back into
the spotlight. The relative usefulness of each is put into perspective through the prism of the pandemic. The time
has, therefore, come for questioning and the questioning of taboos.
Our societal contribution, as brokers, our usefulness as a service dedicated to the protection of heritage in the
broadest sense of the term, will condition the place we will occupy tomorrow in the chain, the networking of
economic activities.
BIPAR and each of its member federations will have to contribute to this exceptional and crucial exercise of reflection.
I would like to thank everyone in advance for their future involvement.
André Van Varenberg
(*) Pandemics: HIV, Asian flu, Spanish flu, Hong Kong flu, cholera, ...
Terrorism: Oklahoma City, Twin Towers, Madrid, London, Paris, Brussels, ...
Industrial accidents: Bophal, AZF, Lubrizoil, Buncefield, Ghislenghien, ...
Nuclear Accidents: Three Miles Island, Chernobyl, Fukushima
Natural disasters: tsunami, floods, hurricanes, fires (California, Australia, Amazonia, ...)
Oil spills: Torrey Canyon, the Amoco Cadiz, the Erika, Exxon Valdez, Braer, Prestige, ...
Dam breaks: Malpasset-Fréjus, Val de Stava, Machu 2, Henan, Vajont, Mina Plakalnitsa, ...
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