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Protecting us against the financial fallout of COVID’s sequel: the reinsurance industry has its work cut out

Published 5 November 2021 in Leadership • 4 min read

The CEO of reinsurance firm Hannover Re is encouraging his staff to draw on the right side of the brain to model various unthinkable future scenarios, potentially as disruptive as COVID-19. 


“COVID has brought with it many unexpected scenarios. We are in the business of insuring very large risks, of modelling scenarios. But we just didn’t think of this one.” 

These are the words of Jean-Jacques Henchoz (MBA 1997), CEO of Hannover Re, one of the largest reinsurance groups in the world. It deals in property and casualty and life and health reinsurance, making it highly diversified. 

“We were perhaps too rational. We tend to use the left side of the brain with scenario building,” said Henchoz. “The cost to society of COVID is proving to be quite considerable; it will burden the finances of the next generation. At Hannover Re, we have been broadening the scope and asking how we can manage our exposure to future risks.” 

Henchoz worked for 20 years at wholesale provider of reinsurance and insurance Swiss Re and  had only just taken the helm of Hannover Re, headquartered in the eponymous city, the third-largest in Northern Germany, when the rumbles of COVID started to sound in early 2020.  

“When a major competitor called it was difficult to resist [leaving Swiss Re],” he said. He took on the role in May 2019. 

But he was ripe for a CEO job. He had climbed the ranks over time at Swiss Re, a journey which saw him in six different roles and which took him on a five-year Canadian étape. 

“First, I was an underwriter, and then I moved to Toronto where I was Managing Director and CEO for the Canadian market and the Caribbean region. There, I practiced a lot of what I had learned at IMD,” he recounted. 

Henchoz, who today splits his time between Hanover and Zurich, completed his MBA at IMD in 1997. 

“The cost to society of COVID is proving to be quite considerable; it will burden the finances of the next generation.”
- Jean-Jacques Henchoz

A segue from public to private 

“I was a bureaucrat,” said Henchoz, whose first job was as Energy Policy Advisor at the Federal Department of Economic Affairs in Bern. “I made my transition from the public to private sector in London with a policy-making role at EBRD (the European Bank for Reconstruction and Development).” The bank aims to change lives in Central & Eastern Europe by building sustainable and open market economies. 

“I was on a trajectory leading me to a diplomatic career – you know, a World Bank/Regional Development Bank path. But I found the public sector too slow. And I was seeing the downsides of having a career where your nationality might count more than your credentials. 

“So I had this exposure to the private sector in London and I liked it. But I had a generalist background, having studied Political Science. I therefore needed a change from an educational perspective,” he said, referring to his decision to embark on an MBA.

“And IMD was great in that it was small enough not to believe you’re just a number. Also, it was about ‘the how’ not ‘the what’. It was very practical, and there were lots of hands-on situations. It was highly relevant. Doing an IMD MBA, you experience your own limits and it teaches you to stay humble!”

‘COVID has made risk solutions generally easier to sell’ 

Henchoz recalls stressful times when COVID hit and as many short nights of sleep. However, he sees COVID as a huge opportunity for his industry: 

“It marked an opportunity for a changed agenda, from a shareholder perspective, and made risk solutions easier to sell. It has created a level of urgency that wasn’t there two years ago.” 

According to Swiss Re, today 75% of risks – from natural catastrophes and climate change, to ageing populations and cyber-crime – remain uninsured.  

Business not as usual 

Opportunities from COVID also come in part from changes to the finer details of “business interruption” in the insurance world as how exactly to claim it became the interest of many. 

Take an event cancellation in 2020 as large as the Tokyo Olympics, whose insurance coverage Hannover Re was directly implicated in.  

“There was a legal argument as to whether you can claim business interruption on insurance as most insurance policies are not supposed to cover a pandemic,” Henchoz explains.  

“Credit insurance is another hot topic. As economies recover and governments reduce their support in companies, there might be a wave of bankruptcies and an increase in unemployment. We are currently looking at potential scenario outcomes from COVID and putting reserves aside for a case of claims because of credit defaults.”  

Hannover Re is a very successful company, says Henchoz, adding that this doesn’t discount the pressing need to invest and refresh: “Technology change will bring new risk exposures, but also new opportunities to close protections gaps. Reinsurers will need to adapt by combining traditional underwriting skills with data analytics capabilities. Investing in new capabilities will be the name of the game for this industry to stay relevant.”  


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