EU leaders gathered in Copenhagen a few days ago to discuss plans to build a ‘drone wall’. So-called hybrid attacks on Denmark and Germany, as well as on Latvia, Norway, Poland, Bulgaria, Romania and Estonia—all on NATO’s eastern flank—have leaders debating what a proportionate and coordinated response might look like. Europe’s defence remains a work in progress. The Russian threat appears to grow. The peace that Europeans have taken for granted can no longer be taken as such.

It’s only the latest crisis in a world that seems much more volatile than it did even 10 years ago. There are wars—in Ukraine, in Sudan, and elsewhere. But there are also tragic fires, as in Los Angeles in January; lethal floods, as in Valencia last year; and a warming atmosphere that will make natural disasters like these more and more likely, and more and more grave. On top of this, cyber-attacks are growing in sophistication and efficacy. M&S, one of the best-loved high-street brands in the UK, was subject to a long and costly cyber-breach that did real damage to its reputation.

The crises the world is mired in at the moment are diverse. Diverse—but not isolated from one another. It doesn’t take too long to realise why this is: extreme events, be they political, economic or climate-related, always have knock-on effects. A natural disaster, for instance, can hurt economies, communities and food supplies, fuelling political unrest and instability that disrupts supply chains and is quickly exploited by criminals. This network of connected risks is what the complexity theorists Edgar Morin and Anne Brigitte Kern termed a polycrisis, and that’s what we’re grappling with today.

Because of the polycrisis, the difference between potential losses in the event of a disaster and the coverage available to compensate for those losses has been widening. This ‘protection gap’ represents a major challenge for insurers in our time. Tasked with ensuring societal resilience so that individuals, private companies and indeed whole states have been able to rest easy knowing that if disaster strikes, they have the support they need to pick up the pieces. But in a world that at times seems uninsurable, insurers must draw on their creativity, experience and pragmatism to continue to do the job to the level that’s expected of them.

High tech response

In practice, this means insurers need to embrace technology. And not just any technology: insurers do that already. I’m talking about the technology developed and refined in just the past few years. Technology such as geospatial, which can track fires and floods; cutting-edge cybersecurity, which can scan for system vulnerabilities and recommend software solutions; artificial intelligence and analytics, which can sift through mountains of raw data and draw valuable and actionable insights in close to real time.

But that’s only half the battle. The other half relates to how those tools are used and how risk is approached. Insurers in the past thought that risks stood in isolation and should be tackled as such. They need to shed this belief.

If natural disasters are treated as independent of geopolitics, or if geopolitics is seen as unrelated to cyber, then insurers will be caught flat-footed when disaster strikes. They need to embrace a joined-up approach, where the problem—the polycrisis—is mirrored in the solution: integrated, holistic risk management. It’s possible. AI, cybersecurity, human expertise, satellite data analysis, geopolitical insight—all of these can be woven together into a networked defence embedded in a single system.

The model must evolve to set much more store by prediction and prevention, and where possible to prefer minimising harm than being part of the project of repair and restoration. This is the best way to react to the widening protection gap. Rather than to think about how to cover increasingly complex, frequent and serious threats, we should focus on making sure that those threats are anticipated well in advance, and damage is mitigated or avoided outright. This wasn’t possible in the past, but in many cases it is now.

Cybersecurity can be improved, wildfires and floods can be foreseen and evasive action taken, geopolitical danger can be anticipated and avoided. This implies a much closer and more collaborative client-insurer relationship, characterised by clearer and more frequent communication and something like a ‘risk partnership’.

This approach won’t be perfect. It will take investment and training. But it is the right way forward, and it is the only approach that will allow insurers to continue to do what they exist to do. There isn’t a moment to lose. The polycrisis is here, the dangers are real, and a cursory glance at a newspaper suggests many of the risks we face today aren’t going to disappear any time soon.

Pierre du Rostu is CEO of AXA Digital Commercial Platform.