HOPE DIES LAST

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

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.

2018-07-19

Hail and windstorms cause multi-billion global economic loss in June; draught may be this summer's nightmare for European farmers

Overall, extreme weather events led to a multi-billion dollar economic toll, of which insurers have to pay more than USD 3 billion in claims for US losses alone, the latest edition of Aon's monthly Global Catastrophe Recap report shows. Economic losses in the Central and South-Eastern Europe amounted some hundred million USD, but weather continued also in July, adding extra costs which may also amount to significant sums.

2018-07-11

Swiss Re's sigma: The global insurance market slowed down in 2017; emerging markets and the US strengthening economy will lead future growth

Global insurance premiums increased 1.5% in real terms1 to nearly USD 5 trillion in 2017, after rising 2.2% in 2016, the latest sigma report reads. Growth in both the life and non-life sectors slowed. According to Swiss Re Institute next years will see the life insurance segment's premiums improving driven by the strong growth in the emerging markets, especially China, while the strengthening economy of the US will lead the non-life global market's development.

2018-07-05

MENA: Fast growing insurance business outpacing economic growth min the region

Insurance markets of the Middle East and Northern Africa (MENA) are expected to continue outgrowing the region's GDP over the next 12 months. Personal lines business remains the key growth driver, with primary insurers benefiting from compulsory insurance requirements as well as regulatory actions supporting rates, the latest edition of the MENA Insurance Pulse reads.

2018-06-28

Are GDPR non-compliance fines insurable or not?

Complying to the EU General Data Protection Regulation (GDPR), effective from 25 of May 2018, is currently one of the most challenging issues for many organizations. Even in the absence of a personal data breach incident, companies may face regulatory assessments resulting in fines and penalties. Moreover, companies operating on several territories, including the EU, may encounter situations interesting several jurisdictions with different legislation. How much can insurance help organization to manage this kind of operational risks?

2018-06-14

Lloyd's: Cyber-crime, interstate conflicts or market crashes yearly costs may reach USD 320.1 billion

Man-made risks like cyber-crime, interstate conflicts or market crashes are a bigger threat to economic output than natural disasters, putting an estimated USD 320.1 billion of global GDP at risk on average each year, according to Lloyd's City Risk Index. Built in collaboration with Cambridge University, the study measures the impact of 22 threats on 279 cities' projected economic output.

2018-06-07

ON THE MOVE

Stefan STAVROSITU appointed Sales Director of GROUPAMA's Romanian unit

Groupama Asiguraari, the Romanian arm of the French group and of the leading players on he ocal market, has announced the appointment of Stefan STAVROSITU as National Sales Director, replacing Julien RAMILLION who, after holding this position for four years, will receive other responsibilities.

08.08.2018

TOP EVENT

LIVE: IIS Global Insurance Forum 2018 / Day2

The works of the Global Insurance Forum continued today in Berlin, Germany. Providing security for ageing populations in health care and pensions terms, as well as innovation and InsurTech or innovative strategies for the future development of the industry are on the today's agenda.

10.07.2018

See all