This first report in our research series on pandemics and insurance explores, in number terms, the capacities of insurers to absorb pandemic-related costs. Encouragingly, research findings indicate that pandemics on the scale of, and similarly lethal to, COVID-19 pose no fundamental insurability challenges for health and life insurers. In the commercial insurance arena, however, the uncontrollable aggregation and correlation elements of pandemic risk defy insurability.

COVID-19’s present and foreseeable social and economic impacts are a call to invigorate and recalibrate discussions to address social inequality and explore new approaches driven by public-private partnerships.   Private insurance, though not designed to address social inequality per se, can offer financial relief to people or households when calamities strike. Such shocks hit the poorest the hardest.

The COVID-19 crisis is a stark reminder of other looming threats, physical and digital, with the potential to cause extreme disruption. In an insurance context, the pandemic underscores the importance of clear policy wording, as ambiguity can cause reputational damage to insurance companies and resource-intensive litigation.

Part of a comprehensive review of flood risk management in five mature economies, this report looks at the system in the United States. It reveals that the government is increasingly committed to building resilience to floods but that a reliance on post-disaster aid and a huge flood insurance gap remain in reality, due to low public awareness and a lack of affordable coverage. A more forward-looking approach to address the increasing level of risk and effects of climate change is recommended.

Part of a comprehensive review of flood risk management in mature economies, this report looks at the system in England, where insurance take-up is high and climate change is taken into account. It finds that the current system is in transition, with focus shifting towards flood resilience; however, progress is slow and more needs to be done to incentivise risk reduction and avoid over-reliance on structural protection and the future availability of insurance.

Part of a comprehensive review of flood risk management in five mature economies, this report looks at the system in Germany. While recognising the gradual shift towards a more anticipatory system focused on risk reduction, prompted by recent floods, it highlights the lack of strategic focus on how to achieve flood resilience and the prevailing underinsurance across the country.

Based on a major Geneva Association study on flood risk management in mature economies, this report gives an overview of the current systems in the United States, England and Germany. It finds that the need to build resilience to floods is recognised as a priority in all three countries but that the approach often remains reactive, rather than anticipatory, in reality. It also offers recommendations for governments, insurers, businesses and households to improve flood risk management systems in light of the changing risk landscape.

The relevance of life insurance in many mature markets has experienced an unambiguous decline in recent decades. It is a worrying trend for society at large, given its historical contributions to funding for retirement and mitigating biometric risks.

Based on the recent Geneva Association Customer Survey, this report sheds light on the drivers behind declining levels of life insurance penetration, such as ultra-loose monetary policies, behavioural patterns and perceived product shortcomings.

The use of artificial intelligence (AI) in insurance can bring economic and societal benefits by lowering insurance costs and helping insure more people. The Geneva Association analysed a selection of the many ethics guidelines issued by governmental and non-governmental organisations and private companies. Of the five core principles for the responsible use of AI identified, this report takes a close look at two—1) transparency and explainability and 2) fairness—that are particularly complex for insurers to interpret and implement.

Infrastructure resilience is critical for countries to be able to cope with the effects of climate change, but sufficient investment is required. This research brief urges coordination among insurers as risk managers and investors, governments and other stakeholders in tackling the global infrastructure challenge.