Raffaele Maccioni: Guillermo, thank you so much for being here today and for the inspiring speech you gave earlier. Let’s start with a big question. Over the past decades, we’ve seen how industrialization and globalization have fueled economic growth but also contributed to pollution and climate change. These changes are now creating disasters that affect families, industries, and entire communities. From what you said earlier, it seems that reinsurance can play a key role in reversing this trend, especially by supporting decarbonization through financial tools. Is that right? Can you help us understand how this works?

Guillermo Franco: Thank you, Raffaele. It’s a pleasure to be here. You’re absolutely right—there’s a strong connection between reinsurance and climate change. At its core, reinsurance is about transferring risk, which means we’re deeply affected by the changes in risks that climate change brings.

But beyond just managing risk, reinsurance can actively support decarbonization. For example, we can invest in clean energy projects and sustainable businesses that aim to lower carbon emissions. Another critical role we can play is incentivizing the development of nature-based solutions, such as forests or wetlands. These not only act as carbon sinks but also reduce risks like flooding.

In essence, reinsurance isn’t just about reacting to disasters—it’s also about helping create a more sustainable future by aligning financial tools with environmental goals.

Raffaele Maccioni: That’s such an important perspective. Let’s talk about the tools that make this possible. How do you think technology is changing the way reinsurance works, especially when it comes to addressing challenges like climate change?

Guillermo Franco: Technology is essential because the scale of today’s challenges requires solutions we’ve never had before. For example, we need more responsive policies that can cover a broader range of risks and impacts.

Emerging technologies like Earth observation systems, artificial intelligence (AI), and machine learning are making a huge difference. They allow us to process massive amounts of data quickly and accurately. For instance, satellite imagery combined with AI can help us monitor disaster-prone areas in real time, which improves our risk models and enables faster responses.

These advancements mean we can design better insurance products that transfer risks more efficiently, ultimately providing more comprehensive coverage for people and businesses. Technology isn’t just helping us keep up—it’s giving us the tools to stay ahead.

Raffaele Maccioni: You’ve worked in both the US and Europe, so you’ve seen how reinsurance operates in different contexts. Do you notice any differences in how these regions use technology or approach innovation in the industry?

Guillermo Franco: Yes, there are some notable differences. The reinsurance industry is global, so there’s a lot of collaboration between companies in Europe, the US, and even Asia. But the pace of innovation can vary depending on the specific challenges each region faces.

In the US, for example, there’s an urgent need for new products because of the sheer variety and intensity of risks—hurricanes, wildfires, earthquakes, severe storms, you name it. This urgency drives faster innovation, with companies focusing on creating solutions that address these immediate threats.

In Europe, while there’s also innovation, it doesn’t seem to be happening as quickly, possibly because the region faces different kinds of risks. However, I think this dynamic will evolve as Europe grapples more directly with its own climate-related challenges.

Raffaele Maccioni: Switching gears a little, let’s talk about your role. You work both as a researcher in academia and as a practitioner in a large organization. I imagine it’s not always easy to bring academic innovation into a big company with its established processes. How do you manage that balance?

Guillermo Franco: That’s a great question, and you’re absolutely right—it’s challenging. Large organizations often have long-standing processes that have worked well for years, so introducing change can be difficult.

To make it work, we start small. We focus on manageable projects or collaborations that demonstrate immediate value. For example, when we work with academic groups, we ensure the research has a practical application we can use internally, whether it’s improving a process or creating a new data set.

It’s also about building trust. When I can show my colleagues that a new approach makes our work easier or more effective, it becomes easier to integrate innovation into the company. In a way, it feels like running a startup within a multinational—you need to be agile and persuasive while staying aligned with the larger organization’s goals.

Raffaele Maccioni: That’s an interesting perspective. Speaking of bridging different worlds, let’s talk about the Decision Science Alliance (DSA). As a nonprofit, DSA aims to connect academia and industry, helping organizations adopt new technologies and methodologies more effectively. How do you see its role in supporting companies like yours?

Guillermo Franco: First of all, let me congratulate you on building the Decision Science Alliance. It’s an incredibly valuable platform. Many conferences either lean too heavily toward academia or focus solely on industry. DSA strikes a perfect balance, fostering collaboration and cross-pollination of ideas between the two worlds.

The idea of creating an open simulation platform, which you mentioned earlier, is particularly exciting. It would give companies like ours a way to see how different techniques are applied in practice, providing inspiration and guidance for adopting these approaches.

By showcasing real-world applications and encouraging dialogue between researchers and practitioners, DSA can accelerate the adoption of innovative solutions. I believe your work will have a significant impact on how we approach decision science and technology integration.

Raffaele Maccioni: Guillermo, thank you so much for your time and insights. It’s inspiring to hear how reinsurance is evolving to address global challenges like climate change while driving innovation.

Guillermo Franco: Thank you, Raffaele. It’s been a pleasure to share my thoughts. I’m excited to see how platforms like the Decision Science Alliance continue to foster collaboration and drive meaningful change in our industry.