The Changing Nature of The Reinsurance Industry – A Call for An Ethical Approach


Business Ethics has increasingly become a concern among companies in the financial services industry. No insurance without reinsurance. Although it is traditionally assumed that insurance has a wider role in society, the ethical debate has mainly developed over the last decade. It is even emerging in the reinsurance industry. This dissertation aims at providing a useful piece of research to the development of ethics in reinsurance.

Initial consideration of the reinsurance industry reveals that the shareholder theory has established as the core business theory. This forms mainly the ‘return on equity’ predominant approach in the vast majority of companies.

Having developed a research using a variety of qualitative methods, including secondary data collection (literature review) and semi-structured interviews in the field of reinsurance, the I observed and was convinced that ethics should play a larger role than that of the restricted return on equity approach.

The literature review reveals limited exploration of a link between ethics and reinsurance. Therefor it is reasonable to propose that there are links between the financial thinking of the industry and its approach to ethics.

The literature review and the primary findings have revealed that trust remains at the heart of the reinsurance industry but seeks to reconcile the short-term and the long-term, and that the strong links between ethics and trust call for a larger ethics beyond the restricted shareholders’ theory in the long run.

No reinsurance without trust, no trust without ethics.

Furthermore, I found that existing literature on reinsurance limits the ethical debate to the shareholders or stakeholders theory, and fails to explore links between societal ethics and this industry.

Consequently, the dissertation has made a contribution to research in an area where there was a notable gap.

Finally, this dissertation proposes a number of recommendations to the reinsurance industry to integrate societal focus and develop ‘geo-ethics’ (via the concept and implementation of societal insurance and reinsurance pools against natural catastrophes for instance), to reconcile short-term financial thinking and long-term partnership, and to regain the necessary public trust.