Although the COVID-19 pandemic is really something new and very unpleasant” the effects are “well known and have already been predicted by various experts last year”, according to Marcus Schmalbach, CEO of Ryskex.
He explained that after tragic events such as the COVID-19 pandemic, the same thing happens, parent companies raise the question of the added value and the necessity of a captive solution.
Schmalback highlighted that captive managers try to close specific gaps in coverage and some risk carriers lay down a special concept for the triggering events.
The economy follows a cycle, he said: “We have already had to survive the consequences of 9/11 and the Lehman crash in the 21st century.”
Schmalbach suggested that based on “pure statistics”, he can already predict that there will be another economic crisis at some point between 2028 and 2030.
He said: “Will it be triggered by terrorism, a banking crisis or a pandemic? Probably not. More likely it will be a natural disaster, a cyber virus, or something that no one is thinking about right now.”
“Can this be insured? Many experts will now say - no. I think this is the wrong approach. After the crisis, we should look ahead and open ourselves to the holy grail of modern risk trading, the development of a VUCA World Policy”, he added.
He explained that there needs to be a cover where the triggering trigger is almost secondary and only the impact is important for the payout, which he described as “a wonder weapon for the balance sheets of companies”.
