A new report by the Global Federation of Insurance Associations (GFIA) has identified and quantified the most significant — and growing — annual global protection gaps: US$1trn for pensions; US$0.9trn for cyber; US$0.8trn for health and US$0.1trn for natural catastrophes.
The report identifies the factors driving these protection gaps both on the demand and the supply side, including why certain risks can be very difficult to insure completely. The report also provides an overview of the wide range of potential levers that can be used by a broad variety of stakeholders to address the gaps.
GFIA president, Susan Neely, commented: “Insurers around the world play a vital role in helping to protect people and businesses from the risks they face, and to recover when those risks materialise. However, as this report highlights, a range of factors have led to huge and growing global protection gaps that could have profound impacts on people’s lives and livelihoods.
“Insurers can, and are, taking steps to address these gaps. These include using technology to assess risks and claims, and to make insurance more accessible for people and businesses. However, closing the gaps will also require action from policymakers to create environments in which risks can be managed and mitigated. These actions will help keep risks insurable and insurance protection affordable.”
The report uses a range of case studies to demonstrate the private and/or public policy actions that have been taken to reduce protection gaps. It also includes GFIA’s own recommendations to policymakers of the best levers to use to reduce risk and increase protection.
“The report makes clear the steps that are needed to reduce the protection gaps and to help people and businesses access the insurance services they need to succeed and thrive,” Neely added.
The Financial Services Council of New Zealand is a member of GFIA.