Irene Lai, QBE Group Head of Underwriting Governance, Sustainability and Standards, has great memories of her first Reinsurance International Study Course (RISC) in 2014.
“The extent of accessible knowledge, open discussion and immersion created by the Syndicate Advisors and RISC organisers, balanced by fun and enjoyment, made this one of the more memorable courses I have been to,” Irene says.
“I made meaningful professional connections that are still strong today as a result of attending RISC and found I could apply my new learnings immediately in the role I was in at the time.”
Making RISC happen
Irene was honoured to be approached to join the RISC committee, as its principles align with the way she likes to contribute to the industry.
“What could be better than cultivating an open learning environment where participants can navigate complex topics that enable strategic decision-making, encourage curiosity and broaden evolving perspectives? Above all, we get to see participants enjoying the whole process.”
From early in her career, Irene Lai was captivated by the intricate workings of risk management and the immense impact the discipline has on global economies.
Reinsurance, being the backbone of risk transfer in the insurance industry, presented an exciting and challenging career.
“I saw an opportunity to utilise my skills and knowledge towards enhancing the stability and resilience of the insurance market,” she recalls.
“The complexity and intellectual rigour involved in assessing and managing risks in reinsurance and insurance fascinated me, and I knew this was the path that would allow me to make a meaningful difference.”
Sustainable practices in reinsurance
In her current role as Group Head of Underwriting Governance, Sustainability and Standards at QBE, Irene is driven by the opportunity to create a positive impact on multiple fronts.
“One of my primary motivations stems from the ability to foster responsible and sustainable practices within insurance,” she says.
"By implementing robust underwriting governance frameworks, we look to operate with integrity and transparency, and in doing so we safeguard the interests of our employees, customers and stakeholders.”
Irene’s role also involves spearheading sustainability initiatives within underwriting, including aligning QBE’s underwriting practices with environmental, social, and governance (ESG) principles.
She is passionate about integrating sustainability into the reinsurance and insurance business, from product development to risk assessment.
“By promoting responsible underwriting practices and considering long-term societal and environmental impacts, we can contribute to enabling a more resilient (and sustainable) future,” she explains.
A standard for reporting GHG emissions
Irene’s commitment to sustainability also extends beyond her day job, having jumped at an opportunity to contribute to the development of the first Global Greenhouse Gas (GHG) accounting and reporting Standard for Insurance-Associated Emissions.
“As part of this effort from industry leaders to drive action on climate change, our aim was to establish a robust and transparent GHG accounting framework that enables (re)insurance companies to independently and unilaterally assess their emissions footprint for their underwriting portfolios,” she says.
For Irene, emerging risks in the reinsurance and insurance space include rapid technological advancements, climate change and shifting socioeconomic landscapes, all of which require careful assessment and management.
“One notable emerging risk is the increasing frequency and severity of natural catastrophes due to climate change,” she observes.
“Reinsurers and insurers must adapt their underwriting practices, develop innovative risk models, and collaborate with scientists and experts to understand the evolving nature of these perils.”
Another risk to consider is the rapid digitalisation of the insurance industry, which has given rise to cybersecurity threats and privacy concerns. “Reinsurers and insurers need to invest in robust cybersecurity measures, enhance data protection protocols and promote cyber resilience across their portfolios,” Irene says.
“Moreover, the interconnectivity of global markets has amplified the potential impact of systemic risks and the chance of a ‘permacrisis’ [a permanent state of crisis].
“Reinsurers and insurers must closely monitor macroeconomic factors, geopolitical tensions, and emerging market vulnerabilities to proactively manage their exposures.”
Opportunity to innovate
While emerging risks present challenges, Irene believes they also offer significant opportunities for reinsurance and insurance professionals to innovate and provide tailor-made solutions.
“By embracing technological advancements, fostering data-driven decision-making, and staying ahead of emerging trends, we can navigate these risks and create a more resilient future for the reinsurance industry.”
As a presenter at this year’s RISC, Irene will discuss and shed light on the key issues and challenges surrounding reinsurance balance sheets.
“Balance sheets play a pivotal role in the reinsurance industry, reflecting the financial strength and capacity of companies to absorb and manage risks,” she says.
“During the discussion, I will emphasise the importance of accurate valuation and appropriate risk assessment for reinsurance assets and liabilities. Depending on strategic reinsurance programs selected, all these disciplines impact the balance sheet and capital.”
Transparency and consistency
With evolving market dynamics, Irene says a challenge lies in adequately quantifying and pricing complex risks, such as catastrophic events or emerging perils. Additionally, there is a need to ensure transparency and consistency in financial reporting practices across the industry.
“I will also look to highlight the significance of stress testing and scenario analysis to assess the resilience of reinsurance balance sheets under extreme scenarios,” she says.
“By addressing these challenges, we can enhance risk management practices, strengthen solvency frameworks, and promote stability in the reinsurance market.”
Irene encourages all prospective participants of the 2023 (and future) RISCs to seize the invaluable opportunity to expand their knowledge and expertise in the reinsurance industry.
“Whether you are an early-career professional seeking to establish a solid foundation, a service provider supporting insurers and reinsurers, or a seasoned expert aiming to stay at the forefront of industry developments, RISC provides an immersive and comprehensive learning experience.
“It’s a fantastic platform for networking with industry peers, mentors (syndicate advisors), renowned experts and speakers.”