Risk exposures, driven by digitisation, urbanisation and climate change as well as value accumulation and concentration, tend to outgrow insurance premiums, leaving individuals, households, firms and the public sector alike underinsured. The root causes and prevalence of insurance protection gaps vary widely across the globe, reflecting different stages of economic development as well as social, institutional and cultural peculiarities.
In emerging countries, the global trend of higher healthcare expenditure has not led to increased penetration of private health insurance, which remains insignificant with a 2% share of total healthcare expenditure. With the right regulatory framework, private health insurance can have an important and beneficial effect on the sustainability of health schemes to which individuals, governments and employers contribute.
A global customer survey commissioned by The Geneva Association corroborates the role of behavioural economics and finance in understanding obstacles to insurance purchases and ways the insurance industry can stimulate demand. A lack of trust in insurers impairs insurance purchasing in mature markets, but encouragingly, this can be effectively addressed by specific measures taken by the insurance industry.
COVID-19’s present and foreseeable social and economic impacts are a call to invigorate and recalibrate discussions to address social inequality. Our research illustrates that private insurance can alleviate social inequality by covering exposures that may push middle-class individuals and families into poverty or perpetuate poverty for low-income households. The report points to specific insurance products and approaches that mitigate the risks of impoverishment and/or contribute to more stable levels of wealth and income.
11-12 July 2019
Advancements in Modelling and Integration of Physical and Transition Climate Risk
Pathways to Climate-Resilient Decarbonised Critical Infrastructure in the 21st Century
COVID-19 has sparked debate on the role of insurers in shouldering losses related to pandemics. In addition to the sickness-related impacts of the virus, government-imposed lockdowns have caused widespread business interruption. Insurers are promptly paying all legitimate claims, but COVID-19 has revealed gaps in coverage.
Our research series on pandemics and insurance investigates, in number terms, the capacities of insurers to absorb pandemic-related costs in health, life and business interruption, and feasible public-private protection solutions.
Although cyber risk premiums have expanded sizeably in years and loss ratios compare favourably relative to other product lines, sustainable growth of the cyber insurance market should not be taken for granted. In our new report we identify three fundamental prerequisites to make cyber risk insurable. Despite recent advances, cyber risk creates unprecedented challenges; most notably accumulation risk, which is at the heart of many concerns about cyber risk.
