As representatives of the (re)insurance industry, do we trust in the positive impact of our very own insurance product? Why is our message not resonating?
Only one out of 10 homeowner and/or business owner has taken out specific earthquake insurance to protect against earthquake hazard in Switzerland. This is a considerable advancement over the past 15 years. At the same time, this leaves a large portion of Switzerland's real estate not explicitly covered. This is home owners and businesses, but first and foremost financial institutions like banks, pension and real estate funds exposed to a rare, while severe risk. Switzerland's mortgage rate is at 140%+ of annual GDP.
This gap in financial risk management provided the fuel of an intensive panel discussion at the Swiss Re Centre of Global Dialogue on April 6. Expert participants from insurance, risk prevention, risk assessment and politics joined in. What conclusions did I take away: In the past 20 years, we've come a long way. The risk is much better understood, reasonably quantified by multiple trustworthy parties, various insurance products and capacity are available at reasonable price levels. But the gap remains.
Amongst experts, the "why" and "what" finds general acceptance today, while the "how" deserves better answers.
The panel generally agreed that a sales approach basing on rational arguments is not the conclusive answer. Individuals and risk managers open to purely rational arguments have closed their insurance gap in the meantime. How to find resonance with the remainder?
Some voices questioned the quality of the product:
* Is there too much complexity in the policy and its link to other cover?
* Is the insurance industry not a credible entity when advertising its products?
* As in most other insurance sectors, insurance is not being bought, but it is sold to you. In consequence, voices for increased governmental pressure to spread protection levels have been strong.
* At the same time, many voices asked for a more customer centric approach: How to get the positive impact of an insurance cover more credibly
and emotionally touching for potential customers?
While the industry clearly advanced, the last mile is clearly not covered. Where would you invest your energy?
Category: Climate/natural disasters: Earthquakes, Resilience
Location: Zürich, Switzerland