The polycrisis is a problem. Insurers are developing solutions.

An interconnected world brings interconnected risks. In the modern age, threats interlock, intertwine, and overlap. Climate change raises geopolitical tensions, which breed cyber risks, which disrupt supply chains. That’s one example. But there are many others. In such a situation treating each risk as independent, something to be seen as a standalone problem, isn’t a long-term strategy. Worse: it actually risks exacerbating the crisis on the whole. It’s like playing Whac-a-Mole, but the mole gets bigger every time.

The term often used to describe this set of complex, interdependent problems is polycrisis. And a range of arguments have been put forward to describe how we got here, and what we ought to do. Some place the blame on the prevailing political and economic order. Others point the finger at wealth disparities. There are philosophers who have claimed we should accept the limits of human control and accept ecological and biological realities. And perhaps there’s a grain of truth to all of these ideas. But it doesn’t answer the question of what we can do practically. Critics of the polycrisis narrative justifiably say there’s a risk of getting so bogged down in diagnosing the problem that we don’t focus enough on solutions.

Insurance is focusing on solutions, however. And by doing so, it’s fulfilling its historic role as a guarantor of societal resilience. Before the arrival of proper insurance companies, people in communities had to help each other if disaster struck. If someone’s house was destroyed, their neighbours would help to rebuild it. If someone’s fence blew down, the community would help to put it up. Once insurance came along, people had a way to rebuild their own houses, to put up their own fence. And this brought them independence while freeing their neighbours to do other things. Spread across society, insurance has brought peace of mind and independence to individuals and communities. It’s one of the load-bearing structures without which society would struggle to stay standing.

With respect to the polycrisis, insurance is responding by turning to technology. Around the world, tech entrepreneurs and companies are developing ingenious ways to rebuff cyber attacks, track floods, monitor wildfires, gauge levels of geopolitical instability, and more. And these are increasing in sophistication and efficacy all the time. What insurance can do is aggregate the tools and forms of technology that these companies are developing and integrate them into a single system. Insurers can then provide their clients with a one-stop shop, if you like, for ensuring their protection against a range of interconnected threats.

Let’s imagine a large company on the West Coast of the United States. Given that 95 percent of cyber attacks are caused by human error, a large company is especially vulnerable to cyber attack. And cyber attacks can do extraordinary harm. Data breaches have cost $4.88 million on average in 2024. They’re likely, too: more than 90 percent of organisations have reported email security incidents, and compromised business email accounts alone accounted for over $2.9 billion in losses in 2023. Through a single platform, a company like this one could access the high-level training and educational tools that transform its workforce into a ‘human firewall’, able to recognise, prevent and respond to cyber attacks in the best possible way. It could assess its vulnerability to attack through a built-in risk monitoring tool, and access solutions that address those vulnerabilities through the same platform.

But such a company, being on the West Coast of the U.S., might also be at risk of damage from wildfires. Through the same system that provides it with cyber-protection, it could get real-time updates on the likelihood of wildfire. Thanks to geospatial data, the company could find out exactly where and when such a fire might break out, how it might spread, and how much damage it might cause. It could receive a notification if a fire was imminent so it could take action to protect itself from harm. The same principle could be applied for floods, or other forms of natural disaster.

That provides just a glimpse of what’s happening in the world of insurance. Insurers are now partnering with cutting-edge technology providers and integrating their tools into single systems so that individuals and organisations can protect themselves at a time of polycrisis. Although the risks we face in the modern world are real, complex and potentially destructive, it’s encouraging to see how insurance is responding. By joining hands with the best and brightest minds in tech, it’s closing the perceived protection gap and allowing people around the world to sleep soundly in their beds, knowing that they and their assets are secure.

by Pierre du Rostu, CEO of AXA Digital Commercial Platform