That was the Year that was…

Well, we hope that by the time this note is posted we will all have made it safely and reasonably soberly into 2017! So, we wish all our Clients, Partners and Advisors, and you, Dear Reader, a prosperous and successful 2017.

As we look forward and consider the opportunities and risks that appear on the horizon, we bring to mind the song-poems of the late and incomparable artist Leonard Cohen; a man who lived a full and turbulent life, and even after severe setbacks fought until the end. One of his last songs “You want it darker” could be a suitable anthem for how many perceive the times in which we live, yet its bleakness should be set against the majesty of his song “Hallelujah”.

The fact is that the events of 2016 have cumulatively demonstrated that there are beliefs affecting a significant segment of the voters of many so-called democratic polities that once again threaten the stability of the geopolitical system that grew out of the Peace of Westphalia of 1648. Many consider that the forward march of ‘progress” is now threatened with reversal, while the rivalry of the United States and the PRC runs the risk of creating another “Thucydides Trap”, in which an existing hegemon feels the need to prevent the rise of a challenger.

And if you want it darker, you merely have to observe the war crimes being committed in the Syrian civil war, to name just one location where Man’s inhumanity to Man is self-evident, or to note that there is now a democratically-elected leader who boasts openly of being a murderer.

However, before we all decide to quaff the hemlock, consider also that news which catches attention tends to be negative, while most of the world gets on quietly with generating wealth and raising people out of poverty through adaptation and innovation. Malthus’ predictions have not yet come to pass!

Of course, in the world of (re)insurance, it’s all about the risks. On the one hand, there have been no major catastrophes that have significantly depleted the industry’s capital (in fact, it is awash in it), while pricing power in most traditional CAT lines remains weak; on the other hand, there are product lines such as cyber and flood (and those which will flow from robotics and AI) which have the potential to provide significant new revenue streams (as long as they can be analyzed and priced properly for the risk), while new geographic markets will also continue to develop.

In Awbury’s world of value-added E-CAT (economic, financial and credit) insurance, we have just successfully completed our 5th year. While our core values and business model do not change (altho’ we are constantly testing the latter for continuing “fitness for purpose”), we constantly refine and develop new products and techniques, as opportunities present themselves and those available change, because we understand that only entities that have the capability to anticipate and adapt will be able to sustain a competitive advantage in an environment where, as the cliché correctly states, “change is the only constant”.

The Awbury Team


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