Date: 2024-12-21 Page is: DBtxt003.php txt00021547
ACTIVISM ... INSURANCE SECTOR
INSURE OUR FUTURE
TPB/TVM commentary about activism related to the insurance industry
INSURE OUR FUTURE
TPB/TVM commentary about activism related to the insurance industry
Peter Burgess COMMENTARY
1. Connecting to the INSURE OUR FUTURE initiative.
It is more than 60 years since I graduated from Cambridge in the UK. My background is engineering, economics and accountancy. I have been a very young corporate CFO and have done international development work for the UN, the World Bank / IFC and private companies in many of the most challenging countries in the world. My work included post-conflict reconstruction and refugee assistance. Optimizing for business profit and investor wealth growth has dominated the modern world for many decades while society and the environment have been ignored. Changing this requires reworking the core metrics for progress and performance so that social and environmental metrics have as much weight as economic (money) metrics. I have an initiative to develop TrueValueMetrics.org as the core foundation for better metrics.
2. Insurance industry crisis
The insurance industry is in crisis, but seems to studiously avoid addressing the existential risks that are likely to overwhelm the industry quite soon. The modern world has the advantage of very productive technology when considered purely from a short term financial perspective that is enabling a level of financial productivity that is higher than anything that has previously been possible. The problem is that non-financial impacts are being ignored as well as long term financial risks that will result from large scale systemic dysfunction.
My foundational training in engineering, economics and accountancy has made me very concerned that modern management methods which have been very good for metrics like GDP growth and investor wealth accumulation are dangerously unfit-for-purpose. The insurance industry is probably better positioned than most industries to understand the risks that are emerging not only in the insurance industry itself, but also in the many industries that insurance companies serve. Nevertheless, insurance companies are also part of the overall systemic dysfunction insofar as hey have investors and managers who are beholden to the general and dysfunctional financialization of everything.
3. Financialization
The TrueValueMetrics initiative aims to address the dysfunction that is financialization. During the past 60 years of my adult lifetime the progress of engineering and technology has been remarkable, and both the cost of production and the scale of production are sufficient to enable a substantially better quality of life for every human being. This has not happened. Rather, a relatively few have amassed an amazing amount of financial wealth and the vast majority of ordinary people have to struggle to make ends meet ... and in many cases, simply to survive. This is a massive failure that will almost certainly destabilize society in the long term future, perhaps in the short term future or it might already be in process. Almost all the conventional management metrics that are currently in use are not fit-for-purpose. Better metrics are possible and are urgently needed. Better metrics will make decisions about everything add up to an optimized outcome. This will be in stark contrast to the metrics that support financialization, delivering great results to those with wealth and power while the vast bulk of the world's population experience a degraded quality of life. This can change. This must change.
Peter Burgess