There are writings that, once read, leave you the impression that each word is placed exactly in its spot, especially created for it. It's like a literary puzzle. All you need to do is to perceive it with patience. In these situations, the reader often asks himself how he has not imagined this logical array of known words and has not imagined their transformation into such powerful ideas. Each verb, carefully chosen, gives a shade, each phrase is the result of a study and work of many people.

Such a reading is also the most recent report of the GENEVA Association (details on them, HERE), suggestively titled "Understanding and Addressing Global Insurance Protection Gaps". Summarily, the material analyzes and seeks solutions for the so-called insurance protection gap. The phenomenon of under-insurance, on a global scale.

The report's conclusions, presented in terms of demand - and, therefore, of clients -, show how:
  • affordability remains a relevant obstacle for increased insurance penetration, primarily in developing and emerging insurance markets;
  • this phenomenon overlaps a void of poor financial literacy or general education, even in developed countries, because the lack of product understanding is, following affordability, the second most relevant reason for not purchasing insurance.
At the same time:
  • about half of insurance buyers base their final purchasing decisions on price;
  • insurance demand is higher among households with higher levels of financial literacy;
  • service and experiential factors, including clear communications, are among the most relevant drivers of insurance purchasing decisions and are almost as important as price and scope of coverage.
On the offer side - and, therefore, on industry and distribution side -, GENEVA Association states that:

  • the cost of producing insurance cover is currently one of the most intensely debated industry topics, especially in the light of technological innovation - which can provide significant efficiency;
  • in nonlife insurance, for example, about 30 cents of each premium dollar are generally absorbed by distribution and general administrative expenses. This fact dents the "economic appeal of insurance".
There are also solutions: all of them require a multi-stakeholder effort, including the area of public authorities. Along with this sector, which can do a lot to complement the industry's efforts on financial education, employers have an important potential role to play in influencing employees' financial behavior, by providing employees with ongoing financial education and training and by promoting and incentivizing healthy lifestyles. At the same time, social media and mobile tools of communication enable quantum leaps in public awareness of insurance and its main characteristics, even in countries with almost no existing traditional distribution channels. Therefore, hope dies last.

Back to the emergent markets, the middle column of the chart above clearly shows who and what to do. It's not us saying it, but one of the Planet's biggest think-tanks. In conclusion, we don't have to dig too deeply, to set our goals at the industry level. One question still remains: who will take a seemingly simple table - which is based on thousands of research hours, if not more -, and translate it into reality? And when?

The report, in its original form, can be downloaded from HERE!

Follow XPRIMM Publications on LinkedIn, for more data on the insurance and financial industry.

Share |

Related articles

WEF's global Top 5 most concerning trends 2019: changing climate, cyber dependency and increasing social disparities and national sentiment

Rising geopolitical and geo-economic tensions are the most urgent risk in 2019, while environmental degradation is the long-term risk that defines our age, with four of the top five most impactful global risks in 2019 related to climate. Rapidly evolving cyber and technological threats are the most significant potential blind spots; we still do not fully appreciate the vulnerability of networked societies. These are some of the main conclusions of the World Economic Forum's Global Risks Report 2019.


Global economic growth is solid but slowing, and emerging Asia will continue to power the insurance market, sigma says

Global premiums are forecast to grow by around 3% annually in 2019 and 2020, mostly driven by the high growth rates in emerging Asia which may be as by three times more than the global average. The economic power shift from west to east will drive insurance sector development to 2020 and beyond. Expanding the boundaries of insurability for corporate intangible assets will be another main growth area for insurers


Insurance, a key player in building resilience

"The frequency of natural disasters is increasing, and the damage they cause will be greater as the world population becomes more urban and concentrated in areas prone to catastrophe," one of the latest analysis published by Aon under the Global Insurance Market Opportunities titles sates.


The Insurance Business in Transition to the Cyber-Physical Market

What we generically call "Cyber risk" is, in fact, a family of risks and it is worth observing if there is a commonality in the perception - thus management - of the risk in the academic, risk management, insurance and policymaking communities. The present study found that cyber breach is perceived as "critical" due in part to its own nature and, importantly, in part to the weak understanding of its impact and our preparedness.



ALLIANZ announced three executives appointments

German insurance Group ALLIANZ announced three senior leadership appointments at ALLIANZ DIGITAL Health, ALLIANZ Private Krankenversicherung and Allianz Global Corporate & Specialty SE.



Inclusive insurance on the agenda of the second CEE & SEE - Regional Actuarial Insurance Conference in Skopje, Macedonia

Insurance should be accessible to all social classes, regardless of their wealth and income status. Products offered today are conventional insurance products, largely inspired from the developed markets as "one-size-fits-all" solutions, affordable to only middle- and high-income clients in the Eastern Europe's emerging & developing markets. The low insurance penetration rates across the region show the need for another approach.


Reducing the risks in agriculture by using insurance means, discussed in Skopje

On November 1st, an Agricultural insurance conference took place in Skopje, Macedonia, organized by the Insurance Supervision Agency in cooperation with the Ministry of Agriculture, Forestry and Water Economy. Drawing attention to the necessity of reducing the risks in agriculture by using insurance was the event's main purpose.


IIF 2018 - Insurance in a DIGITAL WORLD

Emmanuel DJENGUE, Innovation Director, Europe - RGAX, Spain is the Keynote Speaker at IIF 2018 - Insurance in a DIGITAL WORLD Conference in Bucharest, on November 27.


See all