Change is imminent…thankfully

Profound words from the eloquent leader of Europe’s second largest insurer. According to de Castries, we are at a time where we are seeing a big economic and technological earthquake; where the proverbial plates of economy are colliding with the plates of technology.

“Firms are being challenged in what they do,” said de Castries. “Risk itself is not going to change. The form will change but the existence of risk is not going to change. The appetite for protecting yourself against risks is going to increase.”

He used the example of Google driverless cars. The assumption that every car has a driver is just that – an assumption. In the case of driverless cars, there is no requirement for a driver, but the risk of driving remains. That will not change, will not disappear.

De Castries also pointed to the fact that big data has changed – and will continue to change – the world and the way we do business. Just a few years ago, advisors collected data on a client or prospect when they met, learning about their risk appetite and financial goals along the way. Now, advisors have the ability to “understand the customer way better than he can understand himself,” as de Castries noted. And sometimes, even before the first meeting.

But he also reminded us about the importance of keeping morality in business, even with changes rapidly transforming the landscape. “With big data you’re entering a territory where this no map,” de Castries said. “What you need is a compass – a moral compass. It’s up to people to decide how they want to behave. Right now the level of morality is uneven and there are no sheriffs. You don’t want to be the immoral one because you will be judged.”

In the end, even though there is a need for change, there will always remain the same risks, whether business or moral in nature (or both). It’s up to us to choose wisely.