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23 Aug 17 14:36

Over the weekend, I was shocked to hear that my next door neighbour, who has three adorable children, lost her husband in a freak accident.

As someone who is a parent and has also experienced loss, I empathized with her and was relieved to hear that she had security against the loss of her husband's income.

But not everybody is so lucky.

Did you know that in America over 58% of families would not be able to cover their monthly expenses just a few months after a loved one passed away?

It is often only those life-changing events like the death of a loved one – or the birth of a little one – that cause people to think about their own mortality. People tend to think that what is unlikely to happen will not, and as a result, they expose their family to the hit of a lost income forever. 

The consequence is that most people have what we at Swiss Re call a "protection gap" – the term used to describe the difference between the financial means one has and one needs – and it primarily affects the middle classes (those earning between $30,000 and $120,000 per annum). This gap has taken on gigantic proportions.

In the US alone, the population mortality protection gap stands at USD 21 trillion, which works out to approximately 400k USD per household. In Europe, the figure is almost as large (USD 17 trillion).

The protection gap exists because people lack awareness about both the gap itself and ways to rectify it.

How can we solve this? For starters, the insurance market should be more accessible to the public. The products can be simpler, the processes easier. We should be minimizing the number of forms, the blood tests and other hurdles. Moreover, we should fully embrace the digital revolution in ways that other industries have already. This includes educating people about their protection gap.

As the CEO of Swiss Re Life Capital, I'm proud that we are helping to improve the insurance industry so that everyone can get the protection they need.

With our eye on those customers who have not engaged so far, we streamline the underwriting process. We assess risk with state-of-the-art data analytics in order to avoid unnecessary doctor's visits. By developing nimble, easy-to-use, data-centric platforms that are scalable across different distributors at a low cost, we give customers what they need quickly and affordably, like this innovative insurance via selfie product by iptiQ.

The message is clear: life insurance is no longer just for the affluent. For many people, having a protection gap is a matter of life and death. We want to solve that with low cost products that provide certainty at a time when people need it most. We give customers literally hundreds of thousands (or even millions) of ways to protect the ones they love. It's difficult to put a number against the loss of a person's life, but at least with life insurance, the financial stress for you and your loved ones can be alleviated.

For more information on how you can protect yourself and loved ones, please visit our website

Category: Other

Location: Zürich, Switzerland


Carl Christensen - 29 Aug 2017, 9:32 a.m.

Your message Thierry is spot on. The older we get the more we hear of events that effects entire families due to protection gap.

Rajesh - 29 Aug 2017, 5:10 p.m.

Thanks for sharing this Thierry. Yes, educating people about the consequences of having a protection gap is so important. There is a clear disconnect between the value life insurance delivers and the value people perceive.

Martina Moosmann - 29 Aug 2017, 8:31 p.m.

Being aware of the protection gap is clearly a critical first step - Swiss Re has a great edge here.
Having the financials means / setting the right priorities to buy protection is another important factor - many (middle class) actually could.
Finding a sensible product - not that easy. We have gone through the exercise last year and stopped quite frustrated after a significant number of useless recommendations (you don't need to be an insurance expert to spot those).
I have high hopes in you and your team to make a difference in this market !

Will Trump - 31 Aug 2017, 10:06 a.m.

Thanks Thierry, I agree that making insurance more accessible is a great thing – and I'm proud to be contributing to this aim within Life Capital.

However, it's important to acknowledge that simply making something more accessible does not make people want to buy it (for me personally: even if golf was much easier to get into, I would still have no desire to play)

What's really interesting to me as a behavioural scientist is that you (and Carl too in his response) point to the fact that it's real-life events that actually trigger people to think about their insurance needs. This fits with new research showing that people make most decisions based on experience, not information. Yet, as an industry, we assume it's the other way around – hence we talk about "educating" people about their need, with statistics etc.

How about turning this around, and harnessing the fact that people rely on experience for most of their decisions.

What would this look like? Well maybe focussing our messages not on statistics like "x% of people will get a disease before age x", but rather something like

"Do you know anyone in your family (or in your town) who didn't make it to their 65th birthday? It probably won't happen to you, but life insurance is there just in case"

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