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8th September 2019
insurance can help by closing record-high protection gap of $1.2tr says latest Swiss Re sigma report
The world economy is less resilient-insurance can help by closing the record-high protection gap of $1.2tr, according to the latest Swiss Re sigma report.
Highlights of the report are:
-Global economy now has less capacity to absorb a shock than it did in 2007
-Switzerland, Canada and the US have highest economic resilience; euro area resilience has decreased most since 2007
-Insurance resilience(protection needed vs that available) for three core risk areas–natural catastrophes, mortality and healthcare spending–has improved in most regions since 2000
-A record-high $1.2tr protection gap for the three risk areas presents huge opportunity for insurers to boost resilience.
In Europe, insurance resilience has improved notably, even as the protection gap for the three risks has more than doubled.
In the US and Canada, almost two thirds of protection needs are currently covered by existing resources including insurance.
In Latin America, insurance resilience has improved slowly since 2000.
In Asia Pacific, insurance resilience has improved in both the advanced and emerging economies of the region.
The world economy is less resilient now than in 2007 at the onset of the global financial crisis, according to the new Macroeconomic Resilience Indices jointly developed by Swiss Re Institute(SRI) and the London School of Economics(LSE). By contrast, separate insurance resilience indices show that the resilience of households against three main areas of risk has improved in most regions since the turn of the century, according to the latest sigma report. Insurers could boost global financial resilience by closing a record-high $1.2tr composite protection gap for the three areas of risk.
"It is a trillion-dollar opportunity for the insurance industry," said Jerome Jean Haegeli, Group chief Economist at Swiss Re. "The insurance industry has largely kept pace with growing loss potentials and can do more to improve resilience. Emerging markets, in particular, benefit more strongly from insurance protection than mature economies, which often have greater access to alternative sources of funding."
Swiss Re Trends(707 articles)