MONTE CARLO (BestWeek) — XL Group Chief executive Mike McGavick used the Rendez-vous forum in Monte Carlo this week to make a spirited plea for his insurance and reinsurance colleagues to rethink their business approaches if they want to avoid becoming irrelevant in a fast-changing economy.“The stock market would say we don’t use our capital well,” said McGavick. “Insurance and reinsurance are declining in importance as a whole in the property and casualty space. We must do something to reverse this trend. We must reclaim our space.”Speaking as part of a panel discussion on capital management, McGavick said insurers and reinsurers are becoming less consequential in the financial markets, where a single technology company like Apple can command $300 billion in market capitalisation while the entire US property/casualty sector comes to $170 billion.Since 2002, world gross domestic product rose an average 3.8 percent, while insurance industry capitalisation rose an average 2.5 percent, he said. We have gone from 3.4 percent to 2.8 percent as a share of global economic activity, he said.Pointing to technology and energy markets as two examples of business seen as indispensable, McGavick remarked that insurers are less able to serve those markets than in the past.“Just think of all the industries destroyed by the mobile app, he said. How do you insure an app?"McGavick also noted the connection between technology and energy and the supply chain, which he said has no real insurance solutions.He noted when the tsunami hit Japan last year and the floods in Thailand wiped out a lot of Japanese manufacturing, the insurance industry was caught off guard. “How long have we studied supply chains? Supply chains are like shipping in the days before Lloyd’s. Send them on multiple routes and something is bound to get through,” he said.For an industry that needs to fight for survival, McGavick noted the reaction of insurers and reinsurers to the tsunami and floods was “sublimit and exclude”.“You can’t exclude your way to prosperity and sublimit your way to relevance,” he said. “You have to serve the client and reclaim your space.”McGavick also called for stronger industry push back on regulation, noting Europe’s pending Solvency II capital adequacy directive is a threat.“If they are going to require more capital, we are going to have less return, less investment and less underwriting ability,” he said. “We’ll become a utility. We must fight back.”He added regulators must be convinced insurers and reinsurers are not banks, and while the banking segment acted irresponsibly in the run-up to the financial crisis, the insurance industry is not a systemic threat but is in fact a reliable player in financial services.